The opposition party known as the National Democratic Congress (NDC) has the best chance of winning the presidential election in 2024, according to a study by Fitch Solutions titled “Positive Shift in Ghana’s Political Risk Profile Following IMF Programme Approval.”
According to the research conducted by the company based in the United Kingdom, the quick deterioration of economic conditions in 2022 and slow progress in the battle against perceived corruption will intensify anti-incumbency feelings among the voting population.
Fitch Solutions Predicts the winner of Election 2024; NPP or NDC
According to a study by Afrobarometer in July 2022, “the rapid deterioration of economic conditions in 2022 and slow progress in the fight against perceived corruption will exacerbate anti-incumbency sentiment among the electorate.” “85.0% of Ghanaians believed the government was doing a poor job of tackling corruption.”
“In addition, the International Monetary Fund (IMF) has expressed reservations regarding President Nana Akufo-Addo’s flagship Free Senior High School initiative (which was first implemented in 2017), describing it as being “poorly targeted.” The possibility of modifying the programme in order to reduce spending might potentially harm the NPP’s campaign agenda, hence boosting the likelihood that the NDC will win,” the report stated further.
Risks to Ghana’s IMF programme are limited.
Despite the fact that Fitch Solutions believes that a change in administration will most likely occur after the general election in 2024, the company stated that it “believes that risks to Ghana’s IMF programme are limited.” IMF loans have been requested by previous NDC governments (Ghana’s 2015–2019 IMF programme was initiated under an NDC government), and the present leadership of the NDC has indicated support for Ghana’s re-engagement with the IMF.
Ghana’s score in the ‘policy continuity’ category of the Short-Term Political Risk Index (STPRI) was raised to 70.0 out of 100, up from the previous score of 62.5, because the International Monetary Fund programme faces only limited risks.
Social unrest to go down
According to Fitch Solutions, Ghanaian families would see net positive outcomes as a result of economic stabilisation and moderate price growth, despite the fiscal reduction actions that are being undertaken as part of the IMF programme.
“Even though the government has increased taxes, such as income taxes and VAT, in the first half of 2023, economic conditions will gradually return to more normal levels as a result of a more stable exchange rate, decreasing inflation, and a stronger external position.”
After an increase of 17.2% year-on-year in the number of protests and riots in the first half of 2023, we think that this will result in a decrease in the amount of protest activity during the second half of 2023. Because of this, we have increased the score for social stability’ in our Short-Term Political Risk Index (STPRI) to 47.5 out of 100, up from the prior score of 40.0 (a higher score indicates a lower risk).
The overall STPRI score for Ghana has increased to 63.1 from 59.4, where it was previously. The average score for Sub-Saharan Africa on the STPRI is currently at 50.3, which indicates that political risks are still kept to a manageable level in Ghana. The country, however, continues to exceed its regional peers.