World Bank warns Ghana risks reversing poverty gains amid economic strain

Ghana is at risk of losing hard-won progress in poverty reduction due to worsening economic conditions, according to the World Bank’s latest report published in April 2025.

• World Bank report warns Ghana is at risk of losing progress in poverty reduction due to economic challenges
• 25% of the population in Ghana now live in extreme poverty, surviving on less than $2.15 a day
• Rising inflation, weakening currency, and climate-related risks are driving a sharp rise in household vulnerability

The report outlines growing challenges including soaring inflation, a weakening cedi, and escalating climate-related risks, all of which are driving a sharp rise in household vulnerability.

Over one in four Ghanaians now in extreme poverty

The report reveals that more than 25% of the population now live in extreme poverty, defined as surviving on less than $2.15 a day—approximately GH¢30.28.

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This alarming figure reflects a deepening cost-of-living crisis, where rising prices for food, fuel, and essential services are significantly reducing the purchasing power of ordinary Ghanaians.

The World Bank highlights that the economic downturn is disproportionately affecting low-income households and rural communities. "Poverty in Ghana fell considerably up until the COVID-19 pandemic," the report states. "However, moderate growth due to substantial fiscal adjustments, global economic and trade uncertainties, and persistent inflation is likely to impact households and may increase poverty in the coming years. If the impacts on the poorest are not properly mitigated, the necessary economic stabilisation reforms could undermine further progress in poverty reduction."

Urgent call for reforms and social protection

The Bank warns that over one million additional Ghanaians could fall into poverty unless urgent environmental and economic reforms are introduced. It calls for immediate investment in human capital, expanded social protection programmes, and enhanced climate resilience strategies to shield vulnerable populations.

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Pathway to recovery hinges on bold policy measures

To counter these threats, the report recommends structural reforms aimed at restoring macroeconomic stability, strengthening governance, and stimulating job creation. While acknowledging the severity of current challenges, it also emphasises Ghana’s strong potential for recovery through inclusive and sustainable policy actions.

The World Bank notes that it is continuing to collaborate closely with the Ghanaian government and development partners to tackle these overlapping crises and support the country’s efforts to achieve long-term stability and equitable growth.

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