Paper Gains, Real Struggles: Economist Warns of Economic Recovery Disconnect

Ghana’s recent economic improvements may look promising on paper, but the benefits are yet to be felt in the daily lives of most citizens, according to Professor Patrick Asuming, an economist and lecturer at the University of Ghana Business School.

Speaking on JoyNews, Prof. Asuming cautioned against prematurely celebrating gains in key macroeconomic indicators, warning that they may not reflect the lived realities of many Ghanaians.

“It seems to me that the financial and monetary side of the economy has performed better, but the real side is still lagging behind,” he said. “There’s a disconnect between what people are experiencing and what the macroeconomic numbers suggest.”

While headline figures such as declining inflation, improved foreign reserves, and a stronger cedi paint a picture of recovery, Prof. Asuming stressed that these developments haven’t translated into tangible relief for businesses or households.

He noted, for instance, that the drop in the Producer Price Index (PPI)—from 18% to 10%—does not mean that prices are going down. “Prices are still rising. They haven’t declined,” he said. “The rate at which they’re rising has slowed, but that’s not the same as things becoming more affordable.”

Prof. Asuming acknowledged that the cedi has strengthened, foreign exchange reserves have improved, and Treasury bill rates are falling—signs of financial stabilisation driven in part by government action and favourable global conditions for Ghana’s exports. However, he warned that these positive developments must not obscure challenges on the ground.

“Yes, the currency has gained some strength, but when you look at other cost components—such as rising utility tariffs, stagnant wages, and increasing domestic production costs—there’s still a lot of pressure,” he explained.

He attributed much of the recent macroeconomic stability to quick fiscal adjustments by the government, including tighter spending and improved reserve management. But he insisted that these financial improvements are not yet having a meaningful impact on the real economy—the part that affects jobs, incomes, and the cost of living.

“Government has done well to stabilise the fiscal side, but the real economy—the part that touches people’s lives—isn’t recovering at the same pace,” he said.

Prof. Asuming pointed to the GDP growth figures for the first quarter of 2025 as an example of the disconnect. Although the overall GDP exceeded expectations, a closer look at the sectoral data tells a different story.

“When you break down the numbers, you find that five out of the 20 economic sub-sectors actually declined,” he said. “The growth was driven by a few sectors with higher weights, which masks weaknesses in other parts of the economy.”

He warned that too much emphasis on headline indicators like GDP and inflation could create a misleading sense of progress, while many Ghanaians continue to feel economic strain.

“A fall in inflation doesn’t mean prices are dropping, and improved macro numbers don’t mean the economy is booming,” Prof. Asuming said. “People are still under pressure. The average Ghanaian isn’t yet feeling the recovery.”

He concluded by stressing the need to close the gap between financial stability and real-life improvement.

“Until the real side of the economy begins to catch up, we’ll continue to see a recovery that exists more on paper than in people’s pockets,” he said.