S&P Global Warns Ghana’s Reserve-Building Strategy Could Increase Fiscal Pressure

S&P Global has warned that Ghana’s efforts to build up its foreign exchange and gold reserves could come with significant fiscal costs and put pressure on recent improvements in the country’s public finances.

The international rating agency said the Ghana Accelerated National Reserve Accumulation Policy (GANRAP), which relies heavily on gold to strengthen the country’s external reserves, could impose substantial costs on government in local-currency terms.

According to S&P Global, the fiscal cost of the reserve accumulation strategy could range between 0.8% and 2.6% of Ghana’s annual Gross Domestic Product (GDP).

The assessment comes as the government pursues an aggressive strategy to increase Ghana’s import cover through gold-backed reserve accumulation.

While the policy is intended to strengthen the country’s external buffers, S&P cautioned that the associated costs could create challenges for fiscal management, particularly if other pressures on government finances increase.

The agency also highlighted the financial position of the Bank of Ghana, which recorded an operating loss of US$1.25 billion in 2025 and saw its negative equity position worsen to 6.7% of GDP.

The government has begun a phased recapitalisation programme for the central bank, which is expected to continue until 2032. S&P, however, indicated that restoring the Bank of Ghana’s capital position could require the government to issue additional debt.

S&P also acknowledged measures aimed at reducing the fiscal burden associated with the gold sector, including reforms to the regulatory and tax framework and plans to introduce a dynamic sliding-scale royalty system.

However, the agency cautioned that external shocks could weaken some of the expected benefits of these reforms.

It cited higher international fuel prices linked to the conflict in the Middle East as a potential risk, noting that increased fuel costs could raise domestic production and transportation expenses and offset some of the anticipated fiscal gains.

Ghana’s inflation rate has declined significantly from a peak of 54.1% in December 2022 to 5% in August 2026. S&P, however, noted that price pressures have started to increase in recent months.

Despite these challenges, the rating agency said Ghana’s economy has shown relative resilience to the effects of the Middle East conflict, although rising fuel and transportation costs are increasingly affecting businesses and households.