External Sector Surge: A Pivotal Moment for Government, Industry, and Households

By Surv. Prof. Forster SARPONG

During the first quarter of 2025, Ghana reached a significant and uncommon economic achievement, attaining a net lending status to other countries, as stated in the Bank of Ghana's May 2025 Monetary Policy Report.

This represented a shift away from years of continuous deficits and external weaknesses. A combined surplus of $2.2 billion in the current and capital accounts, along with a net purchase of financial assets amounting to $2.1 billion, not only showed increasing investor trust and trade vitality but also positioned Ghana as a rising economic power in the region.

Yet beneath the macroeconomic optimism lies a more profound narrative, one that affects every aspect of the national environment: from government initiatives and structural changes to the executive suites of Corporate Ghana, the hallways of the public service, and the dining rooms of everyday families. This article examines how Ghana's improved external balances are more than just statistics, they represent a sign of revitalization, endurance, and preparedness.

1. Government Efforts: Policy Reliability and Financial Flexibility

The net lending position enhances the Government of Ghana's standing in both domestic and global contexts. Initially, it strengthens Ghana’s credit rating, which leads to lower sovereign risk premiums and decreases the cost of borrowing in international financial markets. Given that the most recent Eurobond was issued in 2021 with a high interest rate of 8.875%, this enhanced external performance paves the way for more cost-effective financing in the future.

Within the country, the surplus offers more financial flexibility. The government's Medium-Term Revenue Strategy (2024–2027), which depends on increasing non-tax revenues and reducing inefficient spending, now has a safety net to protect investments in the social sector. Initiatives such as Agenda 111 (health infrastructure) and the YouStart program (youth entrepreneurship) may now be sped up as macroeconomic reserves grow.

Additionally, following the International Monetary Fund (IMF) approving Ghana's second review under the $3 billion Extended Credit Facility (ECF) in April 2025, the BoG's external sector report presents a strong argument for ongoing assistance and potential adjustments to the disbursement schedule.

1. Ghana's Renewal Plan: Building the Basis for Deep Economic Change

The "Ghana Reset Agenda," introduced in 2023 to address the economic challenges caused by the pandemic and subsequent IMF reforms, seeks to fundamentally shift the economy toward export-driven growth, digital advancement, and industrial development. A $2.2 billion surplus in the current and capital accounts, driven by increased exports of cocoa, gold, and crude oil, along with inflows from remittances, indicates that the initiative is starting to show results.

Significant contributors include:

1. Gold Exports:

Ghana continued to hold its rank as the leading gold producer in Africa, with exports reaching $2.9 billion in the first quarter of 2025 (Minerals Commission Report, April 2025).

1. Non-Traditional Exports:

Including shea butter, horticultural items, and processed foods, these increased by 18% compared to the previous year, indicating progress under the National Export Development Strategy.

1. Remittance Inflows:

A 12% rise in funds sent by the diaspora (from $1.06 billion in Q1 2024 to $1.19 billion in Q1 2025) reflects renewed international trust and a strong diaspora financial sector.

This enhanced external image provides the Reset Agenda with the financial credibility and story-driven momentum required to move from handling crises to promoting growth and transformation.

1. Growth in the Public Sector: Efficiency, Funding, and Digital Development

The government sector, historically weighed down by salary expenses and inefficiencies, has the potential to gain significantly from enhanced performance in the external sector. As risks related to external funding decrease, the Public Investment Programme (PIP) can be broadened to encompass infrastructure upgrades, digital transformation, and strengthening the capabilities of the public sector.

This may speed up the execution of:

1. gov Platform Improvements – aiding in electronic revenue collection, which increased by GH₵1.4 billion in Q1 2025 (GRA Quarterly Report).
2. Digital Public Service Provision – allowing Ministries, Departments, and Agencies (MDAs) to implement cloud technology and biometric solutions with improved financial backing.
3. Transport and Utility Modernization – due to enhanced access to preferential loans and bilateral agreements, such as the Ghana-Germany Green Transition Agreement concluded in March 2025.

Macro stability also enables the government to tackle unpaid wages, implement evaluations based on performance, and streamline staffing to enhance service provision in education, healthcare, and local administration.

1. Corporate Ghana and Small and Medium Enterprises: A Breathing Room for Expansion

For Corporate Ghana, especially Small and Medium Enterprises (SMEs), the effects of this external sector growth are dual: consistency and cost-effectiveness.

1. Exchange Rate Stability:

The cedi increased by 3.4% compared to the dollar from January to April 2025, helping to stabilize input expenses for companies that rely on imports.

1. Lower Interest Rates:

As inflation decreases (from 23.5% in January 2025 to 18.7% in May 2025) and external balances improve, the Bank of Ghana has the flexibility to reduce the Monetary Policy Rate, which is now at 27.5%, possibly leading to lower commercial loan rates.

1. Access to Capital:

The net acquisition of financial assets indicates increased capital inflows into the private sector. So far, banks like CalBank and Fidelity Bank have already introduced new export credit lines and SME financing programs in April 2025.

This enhanced environment allows businesses to allocate resources towards technology, employee development, and manufacturing capabilities, particularly in key areas such as agribusiness, fintech, and light industry.

1. Households in Ghana: Aid, Security, and Revitalized Trust

For the typical Ghanaian family, economic progress might seem far removed, but its impact is tangible and can be quantified:

1. Lower Inflationary Pressures: As food price inflation declines (from 28.3% in December 2024 to 17.6% in May 2025), families are able to make spending decisions with greater confidence.
2. Job Availability: Industrial consistency and increased government funding lead to employment opportunities in construction, transportation, and service sectors. The YouStart initiative and the Ghana Enterprises Agency (GEA) have recently stated that more than 15,000 new micro, small, and medium-sized enterprise positions were established in the first quarter of 2025.
3. Cedi Value: A stronger cedi helps lower imported inflation, enhancing buying capacity. For example, the cost of imported rice dropped from GH₵680 per 50kg bag in January 2025 to GH₵590 in May 2025.

In addition, individuals receiving remittances, who make up almost 20% of Ghanaian families, now benefit from improved transfer rates and greater assistance with education, healthcare, and housing.

Final Thoughts: From Excess to Environmental Responsibility

Ghana's net lending position globally in the first quarter of 2025 is more than just a numerical detail; it serves as an indicator of economic strength and revival. However, the challenge lies in maintaining these achievements through financial responsibility, export competitiveness, and equitable growth.

The chance is evident and translates macro-level success into tangible sectoral change, driving governmental reform, enabling businesses, reinforcing public services, and enhancing household welfare.

With Ghana redefining its path through the Reset Agenda, this advancement in the external sector should act as a base for economic respect, national self-belief, and long-term growth. The moment is right, not only to acknowledge a surplus, but to use it as a stepping stone with intention.

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Will AfCFTA Save Africa Amid Rising Tariff Conflicts?

By Vivian Kai LOKKO

The worldwide economy is preparing for additional upheavals as the United States escalates its protectionist approach. On Saturday, July 12, 2025, Washington introduced significant new tariffs—30percent charges on products from the European Union and Mexico, set to take effect in August. This comes after a series of comparable actions aimed at 23 other nations, such as Canada, Brazil, Vietnam, and Japan, with tax rates varying between 20percent and 50percent, along with an earlier declaration of 10percent for African countries.

Only in the EU, where one-fifth of its exports are directed towards the U.S., the consequences are immense. Although talks are still taking place with the aim of achieving deals before the August deadline, the ambiguity is already causing significant disruption in global markets. U.S. President Donald Trump's tough approach to trade, revived in April through warnings of mutual tariffs, has led to financial market instability, undermined investor trust, and introduced substantial uncertainty into corporate strategies around the world.

The unexpected and unanticipated rise in tariffs is not only putting pressure on diplomatic relationships but also increasing concerns about increased prices, loss of employment, and lasting harm to international trade. As the leading economies of the world prepare for the consequences, a key question arises for Africa: Will the African Continental Free Trade Area (AfCFTA) serve as its defense—or a chance that will be overlooked?

AfCFTA – Africa's Journey Toward Wealth and Growth

The AfCFTA goes beyond a mere policy deal—it represents Africa's largest economic integration effort so far. Aimed at establishing a single market for products and services throughout the continent, the AfCFTA offers potential for boosting industrial development, generating employment, and fostering long-term economic growth. Since its trade component officially began on January 1, 2021, the project has achieved significant achievements—yet the path to complete execution continues to be challenging and evolving. Among its key successes are;

• Signature & Ratification:By December 2022, 54 of the 55 African Union member nations had signed the AfCFTA, while 47 had officially approved the deal. Eritrea is still the sole nation that has not signed.
• Rules of Origin:Approximately 92.3% of tariff lines have completed discussions on Origin Rules—essential for identifying which products are eligible for preferential trade under AfCFTA.
• Guided Trade Initiative (GTI):Launched in October 2022, the GTI supports the seamless movement of products across borders and has expanded from 7 to 39 member states—effectively implementing the AfCFTA.
• Trade Growth:As per the African Trade Report 2025 from the African Export-Import Bank (Afreximbank), trade within Africa increased by 12.4 percent in 2024, reaching a total of US$220.3 billion—showing a significant recovery from the 5.9 percent decline observed in 2023—highlighting the agreement's strength despite global challenges.

Although there have been progressions, the AfCFTA is currently encountering its most significant challenge: dealing with the unstable conditions of increasing global trade conflicts. The declaration from the United States to apply a general 10% tax on imports from several African nations, including Ghana, in April 2025, caused widespread concern throughout the continent, as countries such as South Africa and Lesotho are set to experience further increases of 50%.

For Ghana, the increases might put crucial industries such as cocoa, textiles, and agriculture at risk. This not only jeopardizes export revenues but also weakens industrial competitiveness.

The consequences go further. Many African countries depend significantly on exporting raw resources. Changes in global demand or fluctuations in prices may disrupt their economic stability. Increasing trade conflicts create uncertainties that discourage foreign investment—especially in developing markets such as Africa.

African producers rely on imported equipment and materials, and new tariffs might increase manufacturing expenses, reduce profit margins, and affect consumer spending ability. In other words, the trade conflict highlights Africa's susceptibility to outside influences—and strengthens the argument for enhancing regional integration through the AfCFTA.

Why the AfCFTA is More Important Than Ever

Amid rising protectionist trends, AfCFTA provides Africa with a strategic defense and a strong platform for growth. By reducing internal tariffs and aligning trade regulations, it strengthens the continent's economic independence and shields it from global instability.

Gradual elimination of internal trade tariffs will also enhance the competitiveness of African products across borders. Streamlining regulations, minimizing bureaucratic procedures, and tackling customs inefficiencies will lower trade expenses. Although the AfCFTA has shown significant progress, it still faces substantial challenges—many of which stem from political reluctance and structural weaknesses.

As Mavis Owusu-Gyamfi, the CEO of the African Centre for Economic Transformation (ACET), highlighted at the 2025 Citi Business Forum, the main challenge is not an absence of funding but a shortage of political determination. “We sign the agreement,” she stated, “but when it's time to put it into action, we struggle.”

Throughout the continent, fragile logistics systems, poorly developed transportation infrastructure, and varying trade regulations still hinder the smooth movement of products. The goal of aligning regulations across 54 different economies is a huge challenge—one that is delayed by ongoing customs inefficiencies, excessive bureaucratic procedures, and administrative lags.

Persistent regional conflicts and unstable governance further hinder trade routes, erode investor trust, and diminish the confidence essential for comprehensive continental integration. Nevertheless, amid this challenging environment, there is a potential opportunity. The global tariff conflict, although disruptive, presents Africa with an opportunity to reassess, reconfigure, and advance.

Opportunities amid global disruption

The AfCFTA presents Africa with a unique and significant chance—not merely to endure, but to grow effectively. The continent's increasing importance in global politics is clear, as countries such as India, China, and Russia step up their involvement throughout Africa.

Africa's commerce with China has reached a new peak of $134 billion in the initial five months of 2025, whereas India's trade stood at $97.85 billion during the 2022/23 period.

Indian Prime Minister Narendra Modi, during his recent trip to Ghana on July 3, 2025, highlighted Africa's importance in defining the Global South and emphasized India's growing economic and commercial connections. India has become Ghana's fourth-largest supplier of imports, with trade reaching almost US$3 billion in the 2023/24 period.

In a similar manner, China—Ghana's leading import partner, which accounted for GHC 33.9 billion in imports in 2023—has increased its involvement, highlighted by the establishment of the China-Ghana Mining Association. These changes represent a significant opportunity for Africa to take a stronger stance through the AfCFTA.

By showcasing a cohesive stance, AfCFTA allows Africa to communicate with a single voice in international trade discussions, enhancing its ability to seek more equitable conditions and establish stronger alliances. The continent's large market, home to over 1.3 billion people, offers companies significant opportunities to expand beyond individual countries, opening up new economic areas across Africa.

As global companies look for more secure and varied locations for their supply chains, Africa's growing integration makes it a promising option for foreign investment. This change has the potential to boost local industries, helping the continent move from relying on raw material exports to focusing on manufacturing and industrial development.

Furthermore, a robust internal market diminishes Africa's susceptibility to external shocks, shielding its economies from the consequences of geopolitical conflicts. In a world fragmented by trade disagreements, Africa's neutral position provides a distinctive diplomatic advantage—creating an opportunity to secure improved infrastructure and development agreements from competing global powers.

As former Ghanaian Trade Minister Dr. Ekwow Spio-Garbrah recently stated: "For 34 years, we've had a shared goal that hasn't been achieved yet. A united Africa is our greatest opportunity for economic independence." The AfCFTA, if fully implemented, could represent that much-anticipated progress.

The road ahead

The AfCFTA is more than just a reaction to outside challenges—it represents Africa's comprehensive plan for sustained development. While the global community becomes more inward-focused, Africa needs to look within. By speeding up the adoption of AfCFTA, developing trade infrastructure, and fostering political support, Africa can thrive not in spite of the global trade conflict—but as a result of it. In an era of unpredictability, AfCFTA continues to be Africa's most direct route to economic strength and independently driven growth.

>>>the author serves as Head of News at Citi FM and Channel One TV. She also has expertise in business, finance, and economic reporting.

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Taiwan's 2025 GDP Forecast: 3.05% Growth Despite Export Downturn

Taipei [Taiwan], July 18 (ANI): TaiwanIts economy is predicted to increase by 3.05 percent in 2025, backed by robustexportpositive momentum during the first half of the year, which is anticipated to slow down in the second half, as reported by the Chung-Hua Institution for Economic ResearchCIER), reported Focus Taiwan.

According to the report, CIER projected GDPgrowth is expected to slow to approximately 1.08 percent in the second half of 2025, compared to an estimated 5.17 percent rise in the first half.

The anticipated slowdownis linked to the lasting effects of Trump-era tariff policies and a high base effect from early 2025.

As per the news website,CIERstated that the first-half growth surpassed forecasts because international buyers increased their orders to evade US tariffs.

TaiwanThe technology industry also saw advantages from robust demand, especially fueled by AI-related developments.exports, the platform reported.

The Trump administration first introduced significant tariffs on April 2, featuring a 32 percent tax onTaiwanThese goods, prior to being suspended for 90 days beginning April 9, were intended to aid in trade negotiations.

CIER estimated Taiwan's exportgrowth is expected to slow down to 6.71 percent in the third quarter and drop further to 2.55 percent in the fourth quarter, marking a significant decrease from 20.29 percent in the first quarter and 27.12 percent in the second quarter.

For the entire year of 2025,Taiwan's exportThe organization stated that exports are projected to rise by 13.74 percent, while imports are anticipated to go up by 15.28 percent.

CIERPresident Lien Hsien-ming pointed out that although there are tariff obstacles,TaiwanIts power in artificial intelligence development is expected to maintain growth momentum through the second half of the year.

Lien also warned that the Trump administration could levy duties ranging from 15 to 20 percent onTaiwanThese goods due to strong business connections. He cautioned that increased tariffs could lead to higher inflation in the U.S. by increasing the cost of imports.

Private investment growth is projected to slow down each quarter during 2025, decreasing from 20.77 percent in the first quarter to 3.96 percent in the second, 2.31 percent in the third, and 1.69 percent in the final quarter.

CIERprojects private investments to increase by 7.03 percent this year, with fixed capital formation expected to rise by 6.60 percent to support the overall growthGDP growth.

Private spending is expected to rise by 1.57 percent in 2025, influenced by a strong base from the prior year.

While a stronger TaiwanThe dollar is anticipated to ease import price pressures, while recent natural disasters have increased food costs, and labor shortages have led to higher expenses in the service industry.

CIER expects TaiwanThe consumer price index is expected to increase by 1.89 percent in 2025, staying under the central bank's 2 percent warning level.

As the American currency declines in value,CIER forecasts the TaiwanThe dollar is expected to average NT$30.32 against the U.S. dollar in 2025, rising by 5.92 percent from 2024.

Looking ahead, CIER projects TaiwanThe economy is expected to expand by 2.48 percent in 2026, as per the projections mentioned in the report by Focus.Taiwan. (ANI)

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AGOA's Decline: Reimagining AfCFTA as Africa's Growth Catalyst

By Kwame Asante (Director of Executive, Structured Solutions Development, Cash, Standard Chartered Bank)

The African Growth and Opportunity Act (AGOA), a significant U.S. trade program introduced in 2000, is now encountering an uncertain path as renewal talks are delayed in Washington. Should it not be extended, this would signify the conclusion of a 20-year preferential trade arrangement that has influenced economic ties between Africa and the U.S., especially within industries like textiles, farming, and light industry.

The greatest effect would be experienced by countries such as Kenya, South Africa, Ghana, and Nigeria, which have utilized AGOA to expand their exports and draw in investments.

The AGOA offers duty-free entry into the U.S. market for more than 6,500 items from 35 qualifying sub-Saharan African nations. It has encouraged export-driven growth, employment opportunities, and industrial development, particularly within labor-heavy sectors.

Upcoming Turbulence: What's on the Line

In Kenya, the clothing industry has received the main advantage from AGOA, with more than 90% of fabric exports heading to the United States. The initiative provides around 58,000 direct employment opportunities, mostly occupied by women in export processing zones. Without AGOA, these companies are at risk due to increasing tariffs and reduced competitiveness.

South Africa, home to one of Africa's most varied economies, has leveraged AGOA benefits to boost exports of agricultural products like citrus fruits and wine, along with vehicles and manufacturing items. Losing AGOA would reduce export revenues, limit employment opportunities, and interfere with supply networks that aid the larger Southern African Development Community (SADC) region.

Ghana and Nigeria have also utilized AGOA to boost non-traditional exports. Ghana's clothing exports and agricultural products like yams, pineapples, and cocoa-related items have secured a steady market through the program. Nigeria, which previously depended heavily on oil exports under AGOA, has made progress in developing its light manufacturing and food processing industries. These achievements are now in jeopardy.

In addition to the figures, ending AGOA would mark a step back in Africa's efforts to develop its industries, generate employment, and achieve inclusive economic growth. It would also hinder progress in establishing robust supply chains throughout the continent.

AfCFTA: A Key Shift for Strength

The African Continental Free Trade Area (AfCFTA) presents a different approach, moving the focus from external preferences towards creating a strong, unified African market. By bringing together 54 nations with a total population of 1.4 billion and a GDP of $3.4 trillion, AfCFTA seeks to increase trade within Africa, which currently stands below 17%, in contrast to over 60% in Europe and Asia.

At its foundation, AfCFTA aims to strengthen regional value chains. Instead of exporting raw resources, African nations can work together to create final products, boost industrial strength, and increase job opportunities. Important industries like textiles, processed foods, automotive parts, and medicines, which once gained advantages from AGOA, can now be focused on meeting rising demand within Africa.

Furthermore, AfCFTA offers a structure for Africa to engage with international partners from a stronger stance. It highlights the continent's goal to shape its trade policies around common prosperity, self-reliance, and coordinated strategies.

Progress and Priorities

The AfCFTA rollout has achieved considerable progress:

• All 54 nations belonging to the African Union have signed the accord, with 49 having approved it.
• The Guided Trade Initiative, introduced in 2022, is facilitating commerce in accordance with AfCFTA regulations, showing encouraging initial outcomes.
• Four key industries — Agro-processing, Pharmaceuticals, Automotives, and Transportation & Logistics — have been identified for regional value chain development.
• Agreements concerning Products and Services, Investment, Competition Rules, Intellectual Property, and online trade have been discussed and approved.
• Tariff schedules and origin rules now apply to 92% of goods exchanged. Textile and automotive regulations are almost finalized.
• The Pan-African Payment and Settlement System (PAPSS) is now active, linking more than 20 central banks and 160 commercial banks to facilitate transactions in local currencies.
• Seven countries now allow African citizens to enter without a visa, while 24 provide electronic visas.
• An AfCFTA Adjustment Fund, which includes a Base Fund (for technical support), General Fund (for trade infrastructure), and Credit Fund (for enhancing the capabilities of SMEs and the private sector), has been introduced to assist nations in transitioning and investing in trade-supporting systems.

These advancements go beyond mere policy successes, marking essential progress toward a new regional economic system.

To quicken progress, officials should concentrate on:

• Completing the alignment of customs procedures, digital trade frameworks, and product regulations.
• Funding developments including ports, transportation routes, and distribution centers.
• Allowing small and medium-sized enterprises, which constitute more than 80% of African businesses, to enter formal markets, obtain financial support, and meet certification requirements through the AfCFTA.

Implications for African Businesses

The AfCFTA offers a significant chance for businesses to thrive. It provides entry into a market that is becoming more open across 54 nations, presenting larger opportunities and fresh consumer groups. Lower tariffs, easier origin rules, and improved transportation networks make trading between countries more practical and less hazardous.

To benefit, companies must:

• Sign up with the national AfCFTA secretariats.
• Adhere to the certification and origin regulations.
• Place themselves in a favorable position to engage with local supply networks.

Pioneers, especially within manufacturing, transportation, and agricultural processing, are positioned to achieve a competitive edge as the trade environment evolves.

How We Can Help

With a 150-year history on the continent, Standard Chartered is actively helping clients manage and gain advantages from AfCFTA. We offer:

• Availability of funding and online commerce and cash systems.
• Policy recommendations and strategic guidance on AfCFTA; and
• Services designed to assist companies in expanding across regions.

Our objective is to link clients with emerging growth areas, facilitate the movement of capital, and promote equitable trade throughout Africa.

Final Thoughts: Africa at a Critical Turning Point

The possible termination of AGOA signifies a crucial turning point in the economic ties between Africa and the U.S. However, instead of perceiving it as a disadvantage, it should be regarded as an opportunity for autonomy. The AfCFTA offers a framework to shape a new story, focused on growth driven by African initiatives, trade within the continent, and the development of regional value chains and integration.

The necessary policies and tools have been established. The goal is evident. What is left is unified action. Government officials, companies, and development allies need to collaborate to ensure AfCFTA becomes more than a trade deal, but a powerful driver of growth across the continent.

Africa is entering a new era of trade, this time according to its own conditions.

Provided by SyndiGate Media Inc.Syndigate.info).

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