An Evidence-Based Scenario Analysis

April 2026

Executive Summary

The closure of the Strait of Hormuz since late February 2026, in the wake of the US–Iran armed conflict, represents the largest oil supply disruption in the history of global petroleum markets, according to the International Energy Agency. Brent crude has risen from a pre-conflict baseline of approximately USD 72 per barrel to over USD 120 per barrel as of 30 April 2026, while shipping insurance premiums have multiplied four- to fivefold and global fertilizer markets are tightening. This report assesses the macroeconomic and sectoral implications for Ghana and identifies a calibrated set of policy responses.

Ghana enters this shock from a position of considerable cyclical strength. Real GDP grew by an estimated 6.0 percent in 2025; headline inflation declined to 3.3 percent in February 2026 from 23.8 percent in late 2024; the cedi appreciated by 40.7 percent against the US dollar in 2025; gross international reserves stood at USD 14.8 billion (5.8 months of import cover) at end-February 2026; and public debt fell to 45 percent of GDP. The ongoing IMF Extended Credit Facility programme has anchored fiscal and monetary policy, and the Bank of Ghana has cut its policy rate cumulatively by 800 basis points since November 2025 to 14.0 percent.

This favourable starting position notwithstanding, Ghana remains structurally exposed to global oil prices. Petroleum products account for around 31 percent of total merchandise imports, with refined products representing 94 percent of national supply (USD 4.95 billion in 2025); fertilizer is 100 percent imported; and roughly 66 percent of electricity is generated from thermal plants reliant on natural gas, with diesel and light crude oil as backup fuels.

Key Quantitative Findings

Under the Severe Shock scenario (Brent averaging USD 125 per barrel for nine months, broadly consistent with current observed conditions): headline inflation could rise by 14.8 percentage points relative to baseline, lifting average 2026 inflation to approximately 24.7 percent; real GDP growth would slow from 4.8 percent to roughly 3.2 percent; the petroleum import bill would expand by USD 4.4 billion; the current account would swing from a projected surplus of 3.0 percent of GDP to a deficit of 1.8 percent; and the cedi would face depreciation pressure of approximately 10.5 percent.

Under the Moderate Shock scenario (Brent averaging USD 92.5 per barrel for three months): headline inflation would rise by approximately 6.0 percentage points, GDP growth would be 0.2 percentage points lower, and the additional petroleum import bill would amount to USD 1.6 billion.

Key Risks

•       Second-round effects via wage and inflation expectations could entrench the price shock and force the Bank of Ghana to reverse its easing cycle.

•       Renewed accumulation of energy sector arrears, estimated at USD 55–145 million annually if tariff pass-through lags input costs.

•       Pressure on the IMF programme primary surplus target (1.5 percent of GDP) if subsidies or social transfers are expanded.

•       Disproportionate welfare losses among the bottom 40 percent of households, where food and transport jointly account for over 60 percent of consumption.

Policy Response Framework

The report recommends a calibrated, scenario-contingent policy response: (i) maintain the automatic fuel pricing mechanism while expanding targeted cash transfers to vulnerable households; (ii) pause the monetary easing cycle and stand ready to tighten if second-round effects emerge; (iii) protect the IMF programme primary surplus through expenditure prioritization; (iv) accelerate strategic petroleum reserve build-up and supplier diversification toward the Dangote refinery and other non-Gulf sources; and (v) advance medium-term structural reforms to enhance domestic refining capacity, expand renewable generation, and restore the Tema Oil Refinery to operational status.

Compared with peer oil-importing African economies, Ghana sits between Kenya (more vulnerable, higher debt and capped pricing) and Côte d'Ivoire (less vulnerable, with the SIR refinery serving as a regional supply anchor). Ghana's superior reserve position offers a meaningful buffer, but its dependence on imported refined products and total reliance on imported fertilizer make it more exposed than Côte d'Ivoire.

1. Background and Global Context

1.1 The 2026 US–Iran Conflict

US and Israeli military operations against Iran commenced on 28 February 2026, following the breakdown of nuclear negotiations. Iranian retaliation included missile and drone attacks on Israel, US bases, and US-allied Gulf states. On 4 March 2026, the Islamic Revolutionary Guard Corps declared the Strait of Hormuz closed and proceeded to attack and lay mines around vessels attempting to transit. Since 13 April 2026, the United States has imposed a maritime blockade on Iranian ports, producing what observers have termed a "dual blockade" of the Strait. A brief ceasefire announced on 8 April did not result in restored shipping volumes (Wikipedia, 2026; CRS, 2026).

The Strait of Hormuz typically conveys around 20 percent of global oil supply and a similar share of liquefied natural gas, alongside a substantial share of internationally traded fertilizers. The disruption since late February has been characterized by the International Energy Agency as the largest supply disruption in the history of the global oil market. Saudi Arabia and the United Arab Emirates have rerouted limited volumes via pipelines that bypass the Strait, but these alternatives provide only partial relief.

1.2 Global Energy and Inflation Spillovers

Brent crude futures rose from approximately USD 70 per barrel in mid-February 2026 to USD 80–82 per barrel by 2 March, USD 100 by mid-April, and over USD 118 per barrel by 29 April 2026 (CNBC, 2026; Trading Economics, 2026). The US Energy Information Administration's April Short-Term Energy Outlook projected a peak of USD 115 per barrel in the second quarter of 2026, with retail gasoline reaching USD 4.30 per gallon and diesel USD 5.80 per gallon (EIA, 2026). The Federal Reserve Bank of Dallas estimated that the closure of the Strait could lower fourth-quarter-over-fourth-quarter global GDP growth by 0.2 to 1.3 percentage points in 2026, with the impact rising sharply with closure duration (Dallas Fed, 2026).

Beyond crude oil, the disruption has affected liquefied natural gas markets (Qatari LNG exports under force majeure), fertilizer markets (Gulf accounts for around 30 percent of urea exports), and shipping economics (war-risk insurance premiums up four- to fivefold according to the Congressional Research Service).

1.3 Ghana's Pre-Shock Macroeconomic Position

Ghana entered 2026 in a stronger macroeconomic position than at any point since 2019. The IMF Executive Board completed the fifth review of the Extended Credit Facility in December 2025, noting that all quantitative performance criteria had been met. Selected pre-shock indicators are summarised in Table 1.

The combination of strong gold and cocoa export performance, debt restructuring near-completion, and tight fiscal-monetary policy coordination produced a virtuous cycle of cedi appreciation, disinflation, and reserve accumulation. The Bank of Ghana's first Monetary Policy Committee meeting of 2026, on 26–28 January, cut the Monetary Policy Rate by 250 basis points to 15.5 percent; the second meeting, on 16–18 March, cut a further 150 basis points to 14.0 percent (Bank of Ghana, 2026a, 2026b).

Table 1. Ghana Pre-Shock Macroeconomic Snapshot, 2025–2026

Sources: Bank of Ghana, IMF Country Report 25/343, Ministry of Finance Ghana, World Bank.

2. Scenario Analysis

Three scenarios are constructed to bracket plausible 2026 outcomes. The Baseline reflects the counterfactual path absent the conflict, calibrated to the EIA's pre-conflict reference case and the IMF's January 2026 World Economic Outlook. The Moderate Shock corresponds to a temporary disruption with rapid resolution, broadly aligned with the experience of the June 2025 Iran–Israel air conflict. The Severe Shock corresponds to a prolonged closure of the Strait of Hormuz of approximately nine months, with material second-round effects on inflation expectations, shipping economics, and fertilizer markets. The Severe Shock is broadly consistent with conditions observed in late April 2026 and represents the working planning assumption of this report.

2.1 Scenario Parameters

Sources: Authors' assumptions calibrated to EIA STEO (April 2026), Dallas Fed (March 2026), CRS (March 2026), IFPRI (2025).

2.2 Channels of Transmission

The shock propagates to the Ghanaian economy through five primary channels, each differing in timing and intensity:

1.     External sector: higher CIF cost of refined petroleum imports, additional shipping and insurance premiums, and pressure on the cedi as importers' demand for foreign exchange rises and risk aversion lifts the dollar globally.

2.     Inflation: direct pass-through of higher pump prices to the transport component of the Consumer Price Index, indirect transmission via fertilizer to food prices, and second-round wage and expectations effects.

3.     Real economy: contraction of household real income, particularly in lower quintiles; squeeze on transport, agriculture, and manufacturing margins; reduced aviation activity.

4.     Fiscal: ambiguous net impact, with higher VAT and fuel-tax revenues partially offset by higher cost of energy sector subsidies and demand contraction.

5.     Energy security: risks to thermal generation if WAGP gas supplies are disrupted (a tail risk given Persian Gulf instability extending to Nigerian operations of Gulf-linked counterparties), forcing reliance on diesel and light crude oil at substantially higher cost.

3. Transmission Channels: Detailed Analysis

3.1 External Sector

Oil Import Bill and Terms of Trade

Ghana imported 8.71 billion litres of refined petroleum products in 2025, at a total cost of USD 4.95 billion (COMAC, 2026). Petroleum products represent 30–32 percent of total merchandise imports, the single largest category. Although Ghana exports approximately 50 million barrels of light sweet crude oil annually (predominantly to Asian markets), 100 percent of this production is exported because it commands a price premium internationally; the domestic refining sector accounts for only 6 percent of national petroleum supply, with the Tema Oil Refinery operating intermittently and the Sentuo Refinery shut down for parts of 2025.

This structural arrangement means that Ghana's terms of trade respond ambiguously to oil price shocks. Crude export receipts rise modestly with Brent prices, but refined product import costs rise more, and with greater elasticity to global product cracks. The model in this report estimates that a Brent increase to USD 125 per barrel raises the petroleum import bill by USD 4.4 billion (from USD 4.95 billion to USD 9.4 billion). Crude royalties rise by approximately USD 152 million in the Severe Shock scenario, providing only a partial offset.

Current Account and Reserves

The current account balance is projected to swing from a baseline surplus of 3.0 percent of GDP to a deficit of 1.8 percent under the Severe Shock, a deterioration of 4.8 percentage points of GDP. This is partly cushioned by continued strength in gold exports (which have benefited from safe-haven flows during the conflict) and cocoa receipts, but the magnitude of the petroleum bill increase exceeds these offsets in the severe scenario.

Assuming approximately half of the additional financing need is absorbed through reserve drawdown (with the balance offset through cedi adjustment, capital inflows, and import compression), gross international reserves could decline by USD 0.8–2.2 billion over twelve months. This still leaves reserves at over four months of import cover, but represents a meaningful erosion of buffers built up under the IMF programme.

Exchange Rate

The cedi entered 2026 at a position of considerable strength following its 40.7 percent appreciation against the US dollar in 2025. This appreciation provides a natural buffer to the import-price channel of inflation, but also means that subsequent depreciation pressures will be felt asymmetrically by domestic agents who had begun to dollarise less aggressively. The model estimates depreciation pressures of 4 to 10.5 percent under the Moderate and Severe scenarios respectively, broadly consistent with the Bank of Ghana's January 2026 Monetary Policy Report identification of "demand pressures, largely from energy, commerce, and manufacturing" (Bank of Ghana, 2026a, p. 5).

3.2 Fiscal Impact

Tax Revenues

Fuel-related tax revenues face two opposing forces. On one hand, ad valorem taxes (notably VAT) and the various energy levies (Energy Sector Levies, Energy Recovery Levy, Special Petroleum Tax) generate higher nominal receipts as pump prices rise. On the other hand, demand contracts as real disposable income falls. Empirical evidence from Ghana suggests low short-run price elasticity of fuel demand (in the range of -0.10 to -0.20). The model estimates that fuel-tax volumes decline by approximately 7 percent in the Severe Shock, but this is more than offset by ad valorem effects on VAT, leaving total fuel-related revenue marginally higher.

Energy Sector Arrears

A more material fiscal risk is the resumption of energy sector arrears. Ghana's quarterly tariff adjustment mechanism, anchored by the Public Utilities Regulatory Commission, transmits costs to consumers with a lag. If the Bank of Ghana's foreign exchange operations cannot fully smooth out cedi pressures, or if political economy considerations delay tariff adjustments, the gap between cost-recovery and applied tariffs widens. The model estimates incremental annual energy sector arrears of USD 55 million in the Moderate Shock and USD 145 million in the Severe Shock, equivalent to 0.18 percent and 0.48 percent of GDP respectively.

This is particularly concerning in light of the substantial progress made under the IMF programme to renegotiate legacy power purchase agreements with independent power producers and to reform the Cash Waterfall Mechanism. A renewed cycle of arrears accumulation would erode reform credibility and potentially complicate ECF programme reviews.

Debt Sustainability

Public debt is projected to rise modestly from 43 percent of GDP in the baseline to approximately 45.1 percent in the Severe Shock. The principal channel is the cedi's depreciation, which raises the cedi value of foreign-currency-denominated debt (approximately 35 percent of total public debt). Given the recently amended Public Financial Management Act caps public debt at 45 percent of GDP by 2034, the Severe Shock would bring Ghana close to the statutory ceiling—not breaching it but eroding margin for manoeuvre.

3.3 Inflation and Monetary Policy

Pass-Through Decomposition

The model decomposes the inflation impact into direct and indirect channels. The direct channel captures the pass-through of crude oil prices to retail fuel prices and onward to the transport-fuel component of the Consumer Price Index. With a pump-price pass-through coefficient of 0.55 and a CPI fuel weight of 4.5 percent, a 72 percent rise in Brent crude generates approximately 1.8 percentage points of direct inflation impact under the Severe Shock.

The indirect channel encompasses second-round effects through transport services, fertilizer-driven food prices, and economy-wide cost-push pressures. Drawing on the World Bank's estimate of approximately 20 percent long-run pass-through of global commodity prices to African consumer prices over twelve months (Tovar et al., 2023), and incorporating the specific severity of the fertilizer shock, the model estimates 13.0 percentage points of indirect inflation impact under the Severe Shock.

The combined estimate of 14.8 percentage points of additional inflation under the Severe Shock would lift average 2026 inflation to approximately 24.7 percent, well above the Bank of Ghana's 8±2 percent target band. This estimate is high but plausible: in the 2022 commodity shock, Ghana experienced inflation peaks of over 50 percent under similarly compounded oil, food, and currency pressures, although in that episode the cedi depreciated by approximately 30 percent versus the dollar.

Bank of Ghana Response

The Bank of Ghana has already signalled awareness of these risks. The 18 March 2026 Monetary Policy Committee statement noted that "recent geopolitical developments have heightened uncertainty and resulted in global supply disruptions, especially in the crude oil market, which has raised global inflation concerns" (Bank of Ghana, 2026b, p. 1). Despite these concerns, the Committee proceeded with a 150-basis-point cut, judging that prevailing real rates and the favourable starting position justified continued accommodation. This decision implicitly assumed that the conflict would resolve before second-round effects materialised.

Under the Moderate Shock, the appropriate monetary response is to pause further easing and adopt a data-dependent stance. Under the Severe Shock, partial reversal of recent cuts is likely warranted: the model suggests the Monetary Policy Rate may need to rise by 200 to 400 basis points to anchor inflation expectations and prevent broad-based wage-price spirals, particularly given the strong starting position of the labour market and the anchoring effect of the recent cedi appreciation.

3.4 Real Economy and Sectoral Impacts

Transport

Transport is the most directly exposed sector. With pump-price pass-through of 0.55, the Severe Shock generates a 39.8 percent increase in the ex-pump price index. The transport sub-component of the CPI is estimated to rise by 25.9 percent year-on-year in the Severe Shock, well above the 7.0 percent assumed in the baseline. Aviation and jet fuel prices respond more sharply still, with global jet fuel cracks elevated by tight refinery economics; the model estimates approximately 79.7 percent jet fuel price increases, with implications for both passenger fares and cargo logistics.

Agriculture

Agriculture faces a dual squeeze. Ghana imports 100 percent of its inorganic fertilizer requirement, with the Persian Gulf accounting for approximately 30 percent of global urea exports. The 2022 fertilizer shock generated an 88 percent rise in Ghana's urea retail prices (IFPRI, 2025); the current shock could generate a similar 40–90 percent increase, raising the fertilizer import bill by USD 260 million to USD 585 million. Combined with higher diesel costs for mechanisation and irrigation, the model estimates farm input cost increases of approximately 28 percent under the Moderate Shock and 65 percent under the Severe Shock. Smallholder farmers, who already use fertilizer below FAO-recommended levels, are likely to reduce application rates further, with consequences for the 2026/27 maize and rice harvests.

Industry and Manufacturing

Ghana's industrial sector includes energy-intensive activities such as cement production, ceramics (notably the new Tetracore, Continental Blue Investment, and CIMPOR Ghana operations), and metals processing. These activities are exposed both directly through higher fuel costs and indirectly through electricity tariff adjustments. The PURC's quarterly tariff review framework is well-designed to reflect costs, but creates volatility in industrial planning. The model estimates electricity tariff adjustment pressures of 5.5 percent (Moderate) to 14.3 percent (Severe), although administered pricing decisions may delay full pass-through.

Household Welfare

Ghanaian households in the bottom 40 percent of the consumption distribution allocate approximately 55 percent of their expenditure to food and 8 percent to transport. They are therefore disproportionately exposed to oil-driven inflation. The model estimates real income losses of 7.8 percent (Moderate Shock) to 19.3 percent (Severe Shock) for the bottom 40 percent, more than 30 percent above the average household exposure. LPG, which has been actively promoted as a clean cooking fuel, would see its retail price rise by 22 percent (Moderate) to 58 percent (Severe), potentially reversing recent gains in clean cooking adoption.

3.5 Energy Sector

Ghana's electricity generation mix is approximately 66 percent thermal (predominantly natural gas), 33 percent hydro, and less than 1 percent renewable (Energy Commission Ghana, 2024). Thermal generation depends on a combination of indigenous gas (from Jubilee, TEN, and ENI Sankofa) and imports via the West African Gas Pipeline (minimum 73 MMscfd from Nigeria). Domestic gas alone is insufficient to meet demand, particularly in the dry season when hydro output declines.

Two distinct energy security risks arise from the current shock. First, when domestic gas plus WAGP imports fall short of thermal demand, generators substitute light crude oil and diesel; these backup fuels track Brent crude prices closely, raising the marginal cost of electricity sharply during periods of constraint. Second, the floating LNG regasification terminal at Tema, intended to expand import capacity, would also be exposed to global LNG prices that have risen in tandem with the closure of Qatari LNG exports. The combination implies that any disruption to indigenous gas supply during the conflict period would be substantially more costly than under normal market conditions.

4. Macroeconomic Impacts: Quantitative Summary

This section summarises the model's central estimates across scenarios. Detailed formulas and assumptions are documented in the supporting Excel workbook.

Table 2. Summary of Estimated Macroeconomic Impacts on Ghana, 2026

Sources: Authors' calculations using elasticities from World Bank (Tovar et al., 2023), IMF WEO, Dallas Fed (2026), and Ghana national data.

4.1 Sensitivity Analysis

Given the considerable uncertainty about the duration and depth of the disruption, Table 3 presents the sensitivity of key outcomes to alternative oil price paths, holding pass-through elasticities at central values.

Table 3. Sensitivity to Brent Crude Price Outcomes (assuming six-month duration)

Source: Authors' calculations. Note: GDP impact is sub-linear in oil price changes given import substitution and demand response; inflation impact is approximately linear.

4.2 Peer Country Benchmark

Ghana's vulnerability sits in the middle of the African oil-importer distribution. Côte d'Ivoire, with its 200,000-barrel-per-day SIR refinery and net refined-products export status, is the least vulnerable West African economy of comparable size. Kenya, with capped retail pricing that exposes the fiscal accounts to direct subsidy costs, sits at the higher end. Ghana's automatic monthly fuel pricing mechanism transmits the shock more cleanly to consumers but protects fiscal accounts; its superior reserve position (5.8 months of import cover, versus 4.5 in Kenya) provides a meaningful buffer.

Table 4. Peer Country Comparison: Ghana, Kenya, Côte d'Ivoire

Sources: IMF WEO (2026), national authorities, Worldometer, Standard Bank Africa Markets Revealed (June 2025), authors' assessment. 

5. Risk Assessment

5.1 Upside Risks

•       Rapid de-escalation: Should Iran and the United States reach a negotiated settlement in May or June 2026, oil prices could fall back rapidly toward the USD 80 per barrel range, limiting the inflation pulse to 4–6 percentage points.

•       Gold price strength: Safe-haven flows have continued to support gold, Ghana's largest export. A continued gold price premium of USD 200–400 per ounce above pre-conflict levels could add USD 1.5–3 billion to export receipts, materially offsetting the petroleum import bill increase.

•       Strategic Petroleum Reserve releases: Coordinated International Energy Agency releases of up to 3 million barrels per day, as proposed in early April 2026, could moderate the price overshoot.

•       Continued cedi resilience: The strong starting position and ongoing GoldBod and Bank of Ghana intermediation framework may absorb a larger share of the shock through reserves than through the exchange rate, dampening pass-through.

5.2 Downside Risks

•       Wage-price spiral: Ghana's labour market is tight, with formal sector wage negotiations in early 2026 anchored to 2025's strong real wage gains. A second round of wage demands matching the inflation pulse could entrench the shock and require substantially more aggressive monetary tightening.

•       Capital account reversal: Foreign holdings of cedi-denominated debt have rebuilt in 2025 following the debt restructuring. A sharp risk-off episode could trigger outflows that compound the cedi pressure.

•       WAGP disruption: Although Nigeria is not directly involved in the conflict, regional gas markets are interconnected, and any disruption to West African Gas Pipeline flows would force expensive substitution to oil-fired generation, with cascading effects on power tariffs and arrears.

•       Damage to Persian Gulf energy infrastructure: Reports of missile damage at the QatarEnergy LNG plant, with repair times estimated at up to five years (Bloomberg, 2026), suggest that the supply impact may persist well beyond the immediate cessation of hostilities. This could elevate the medium-term oil price baseline by USD 10–20 per barrel.

•       Political economy of subsidies: The current administration has committed to maintain automatic pricing, but social pressure during a sustained inflation episode could force the introduction of explicit fuel subsidies, reproducing the fiscal vulnerabilities of pre-2022 Ghana.

5.3 Second-Round Effects

The principal second-round transmission channels are: (i) wage adjustments, with public-sector wage negotiations typically concluding mid-year and likely to demand inflation compensation; (ii) inflation expectations, which the Bank of Ghana's surveys indicate had been re-anchored to the target band but may de-anchor if monthly inflation prints exceed 1 percent; and (iii) cost-pricing in non-tradeable services, where firms typically reset prices with a six-to-nine-month lag. The model's indirect inflation channel is intended to capture these effects, but their magnitude is sensitive to monetary policy credibility and to the speed of de-escalation.

5.4 Political Economy Considerations

The shock arrives at a politically sensitive juncture. Ghana's commitment to maintain fiscal discipline under the IMF programme has been a signal achievement of recent macroeconomic management. A sustained inflation episode that erodes household real incomes will generate pressure for compensatory fiscal expansion. The authorities will need to weigh the short-term political costs of holding the line against the medium-term costs of programme deviation, including potential delays in remaining ECF reviews, ratings agency response, and the resumption of Eurobond market access.

The authorities have built credibility by adhering to the Fiscal Responsibility Framework (which mandates a minimum 1.5 percent primary surplus annually and caps debt at 45 percent of GDP by 2034). Defending this credibility through the shock will be central to ensuring that the post-shock recovery is not delayed by lost market access or programme renegotiation.

6. Policy Recommendations

The recommended policy mix combines short-term stabilisation, medium-term resilience-building, and structural reform. Recommendations are tiered by urgency and by policy area, and explicitly accommodate the IMF Extended Credit Facility programme parameters.

6.1 Short-Term Stabilisation (0–6 months)

Monetary Policy

•       Pause the monetary easing cycle. The Bank of Ghana should hold the Monetary Policy Rate at 14.0 percent at the May 2026 Monetary Policy Committee meeting, signalling vigilance about second-round effects without prematurely tightening.

•       Prepare for partial reversal. Should the Severe Shock materialise (Brent sustained above USD 110 per barrel through June), be prepared to raise the policy rate by 100–200 basis points, communicating clearly that the move is precautionary and reversible.

•       Maintain the structured foreign exchange intervention framework. The Bank of Ghana's framework for smoothing FX volatility is fit-for-purpose; the priority is to avoid drawing reserves below five months of import cover.

•       Sterilise excess liquidity. Continued reliance on remunerated open market operations, as introduced in late 2025, will be important to prevent monetary expansion during a period of cedi pressure.

Fiscal Policy

•       Defend the 1.5 percent primary surplus. Maintain the IMF programme commitment as the central fiscal anchor. Permit automatic stabilisers to operate but resist discretionary spending increases.

•       Maintain automatic fuel pricing. Ghana's weekly automatic price adjustment mechanism is one of the strongest features of the country's fiscal architecture. Resist political pressure to suspend it.

•       Expand targeted social transfers. Use the Livelihood Empowerment Against Poverty (LEAP) programme as the principal vehicle for protecting the bottom 40 percent. Funding can be partially obtained from windfall crude oil royalty revenues (USD 50–150 million in the central scenario).

•       Tariff lifeline for thermal generation. Allow the PURC quarterly tariff adjustment mechanism to function fully, supplementing the Cash Waterfall Mechanism with bridging finance from multilateral partners if necessary to prevent re-accumulation of energy sector arrears.

External Sector

•       Accelerate the GoldBod programme. The centralisation of gold purchases has generated approximately USD 8 billion in foreign exchange flows. Further deepening of this mechanism, including additional licensing of small-scale mining cooperatives, can boost reserves at a critical juncture.

•       Engage bilateral partners. The IMF Catastrophe Containment and Relief Trust and the World Bank's Crisis Response Window are potential sources of concessional financing during a sustained shock. Ghana should engage proactively rather than wait for the next ECF review.

6.2 Medium-Term Resilience (6–24 months)

Energy Security

•       Build a strategic petroleum reserve. Ghana currently maintains three to six weeks of fuel cover, in line with regional norms but well below the IEA's 90-day standard. A target of 60 days, financed through a dedicated levy on petroleum imports, would substantially reduce vulnerability to short-duration shocks.

•       Diversify supply sources. Sourcing from the Dangote Refinery in Nigeria reduces both freight costs and exposure to Persian Gulf disruption. Negotiate stable supply contracts at scale, leveraging Ghana's status as a regional fuel hub.

•       Restore domestic refining. The Tema Oil Refinery has operated at low capacity for years; restoring it to consistent operation, alongside the Sentuo Refinery, could lift domestic refining from 6 percent to the 18–25 percent range projected by COMAC for 2026 (COMAC, 2026).

•       Accelerate the Tema LNG regasification terminal. Operational status of the floating storage and regasification unit will provide an alternative to thermal generation backup fuels, although global LNG markets remain expensive during the conflict.

•       Expand utility-scale renewables. The IFC-supported 200 MW solar facility with LMI Holdings and similar projects should be accelerated. A target of doubling solar PV installed capacity by end-2027 would meaningfully reduce thermal fuel exposure.

Agricultural Resilience

•       Strategic fertilizer stockpile. Pre-position one season's fertilizer requirement (approximately 250,000 metric tonnes) through public-private partnership, financed through the Planting for Food and Jobs programme.

•       Domestic fertilizer production feasibility. Revive the 2018 USD 2 billion proposal for ammonia and urea production from natural gas, which was contingent on stable gas supply. The current shock strengthens the economic case.

•       Promote integrated soil fertility management. Reduce dependence on imported inorganic fertilizer through extension services promoting compost, lime, and improved cropping systems.

6.3 Structural Reforms

•       Deepen the fiscal responsibility framework. Codify a counter-cyclical reserve fund to which a share of crude oil royalties is automatically deposited during high-price periods, available for drawdown during shocks.

•       Re-anchor the inflation targeting framework. The Bank of Ghana's evolution toward a structured FX operations framework, sterilisation through BoG Bills, and rigorous inflation forecasting (as outlined in the March 2025 framework reset) should be sustained as the institutional foundation for future shock response.

•       Diversify export base. Continued strengthening of non-traditional exports (the 27.8 percent return on the Ghana Stock Exchange Composite Index in 2025 reflects investor confidence in this trajectory) reduces dependence on oil and gold.

•       Regional cooperation. ECOWAS-level coordination on strategic petroleum reserves and emergency LPG supply could reduce per-country fixed costs and provide collective bargaining leverage with global suppliers.

6.4 Summary Policy Matrix

7. Conclusion

The 2026 US–Iran conflict and the closure of the Strait of Hormuz represent a major external shock to the Ghanaian economy. The shock arrives, however, at a moment of considerable cyclical strength: inflation is at a multi-year low, reserves are at their highest level since 2019, the cedi has appreciated sharply, the public debt-to-GDP ratio has been roughly halved from its 2022 peak, and the IMF programme is on track for completion.

Under the Severe Shock scenario—which is broadly consistent with current observed conditions—the model estimates that 2026 inflation could rise to approximately 24.7 percent, GDP growth could slow from 4.8 percent to 3.2 percent, and the current account could swing into a deficit of 1.8 percent of GDP. These are material impacts but considerably less severe than those experienced in 2022, both because Ghana's structural buffers are stronger and because the shock is more narrowly an oil-price event than the compounded oil-food-financial shock of 2022.

The principal policy challenge is to absorb the shock without sacrificing the credibility gains of the past three years. This requires holding the line on the IMF programme primary surplus, maintaining automatic fuel pricing, pausing the monetary easing cycle while standing ready to tighten, and using targeted social protection to shield vulnerable households. In the medium term, the shock provides renewed impetus for accelerating energy security investments—strategic reserves, supply diversification, domestic refining, and renewable generation—that will reduce Ghana's exposure to future episodes of Middle East instability.

Compared with peer oil-importing African economies, Ghana is better positioned than Kenya but more vulnerable than Côte d'Ivoire. The reform agenda outlined in this report would, over a three-to-five-year horizon, move Ghana toward the lower end of African oil-importer vulnerability, consistent with the country's broader ambition of macroeconomic resilience. 

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World Bank (2026). Ghana Country Overview and Macro Poverty Outlook. Washington, DC.

Methodological Note

This analysis was developed using calibrated elasticities from the empirical literature, applied to a transparent accounting framework documented in the supporting Excel workbook. Elasticity estimates are central values from the indicated sources; readers are encouraged to consult the workbook's Sensitivity sheet to assess the impact of alternative parameter choices. The Severe Shock scenario is broadly consistent with conditions observed in late April 2026 but should not be interpreted as a forecast: scenario outcomes depend critically on the duration of the Strait of Hormuz disruption, the response of OPEC+ and IEA strategic reserves, and the path of regional escalation.

All figures are presented in nominal US dollars or Ghanaian cedi at indicated prices; aggregations across years use central exchange rate assumptions documented in the Assumptions sheet. The analysis does not incorporate dynamic stochastic general equilibrium feedback effects; users requiring such analysis are referred to the Bank of Ghana's macroeconomic forecasting framework or to IMF World Economic Outlook simulations.

This document does not constitute investment advice or an official position of any institution.