Consumer confidence, business sentiments improve – BoG

Ghana's macroeconomic trajectory is shifting decisively in favour of stability, presenting fresh opportunities for European businesses and investors who have watched from the sidelines during the country's recent volatility. New data from the Bank of Ghana reveals that economic activity expanded at a robust 8.4% annual rate in January 2026, a meaningful improvement from 6.0% growth recorded in the same month a year prior. This acceleration, combined with strengthened currency resilience and improved business sentiment, marks a critical inflection point for the West African economy.

The 40% jump in the Composite Index of Economic Activity reflects sustained momentum across Ghana's productive sectors. This metric, which tracks real economic output rather than nominal figures, suggests that genuine business activity is expanding—not merely being inflated away by currency depreciation. For European investors accustomed to Ghana's recent volatility, this represents tangible evidence that the economy is moving beyond crisis management into genuine expansion mode.

The backdrop to this recovery deserves attention. Ghana spent much of the preceding three years navigating fiscal stress, currency depreciation, and an IMF-supported adjustment programme. The cost was real: investor confidence eroded, the cedi lost approximately 40% of its value against major currencies, and expatriate-heavy sectors retreated. However, the combination of disciplined fiscal execution, improved commodity prices, and IMF programme completion has fundamentally altered the risk calculus.

The Bank of Ghana's recent assurances regarding cedi stability are not mere rhetoric. Three concrete improvements underpin this confidence: declining inflation, which has decelerated from double-digit peaks to single digits; improved foreign exchange inflows, driven by both gold exports and renewed portfolio investment; and a stronger reserve position that now provides genuine buffer capacity. These are precisely the indicators that international investors monitor when assessing whether currency recovery is durable or merely temporary.

For European entrepreneurs, this development carries specific implications. The currency's stabilisation reduces hedging costs and allows for more accurate medium-term financial planning. Companies in manufacturing, agribusiness, and business services—sectors where European expertise commands premium valuations—are now operating in a more predictable environment. The improvement in business sentiment, indicated by the broader economic index, suggests that local private sector players are themselves gaining confidence, making them more likely partners for joint ventures and supply chain arrangements.

However, context remains essential. A single quarter of improved data, while encouraging, does not erase structural vulnerabilities. Ghana remains dependent on commodity exports, particularly gold and cocoa, meaning external price shocks retain significant influence. The improvement in reserves is welcome but modest by regional standards, and fiscal consolidation, while necessary, continues to constrain government spending that could otherwise stimulate demand.

European investors should view Ghana's current position not as a return to pre-crisis stability but as entry into a new phase of managed recovery. The low entry valuations created during the crisis period remain partially intact, even as risk premiums compress. For those with patient capital and sector-specific expertise, the window for strategic positioning is open—but selectivity matters. Ghana is recovering, but it is not yet recovered.