Addis Abeba — Ghana is projected to overtake Ethiopia as Africa’s eighth-largest economy in 2026, with its gross domestic product (GDP) forecast to reach US$128.64 billion, exceeding Ethiopia’s projected US$127.15 billion by US$1.49 billion, according to the International Monetary Fund’s (IMF) October 2026 World Economic Outlook (WEO), as reported by African Business Insider on 17 October.
The projected shift comes after Kenya overtook Ethiopia as East Africa’s largest economy in nominal US dollar terms, marking another change in the continent’s economic rankings driven partly by exchange-rate movements rather than differences in real economic growth.
The IMF’s latest estimates place Ghana eighth among Africa’s largest economies, ahead of Ethiopia in ninth place and the Democratic Republic of Congo (DRC), whose economy is projected at US$122.28 billion. While Ghana’s nominal GDP is expected to edge ahead of Ethiopia’s, the two countries have markedly different growth forecasts.
Ethiopia’s economy is projected to expand by 9.2% in real terms in 2026, compared with Ghana’s forecast growth of 5.7%. However, the depreciation of the Ethiopian birr following the government’s July 2024 foreign-exchange reforms has reduced the dollar value of the country’s economic output, narrowing its position in nominal GDP rankings despite strong projected domestic growth.
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Ghana’s recovery and economic position
Ghana’s projected rise comes as the West African country continues to recover from a severe financial crisis marked by currency depreciation, high inflation, mounting public debt and pressure on government finances.
In 2023, Ghana secured a US$3 billion IMF support programme aimed at restoring macroeconomic stability, addressing debt vulnerabilities and rebuilding investor confidence. The government subsequently pursued fiscal reforms, debt restructuring and measures to stabilise prices and the national currency.
The country’s economic position is also supported by exports of gold, cocoa, oil and gas, alongside financial services and a growing consumer market. Gold remains a major source of export earnings and foreign exchange, with higher international prices providing additional support to inflows.
However, an improved position in nominal GDP rankings does not necessarily translate into higher living standards or stronger productive capacity. Sustaining the recovery will depend on Ghana’s ability to attract long-term investment, create employment and expand industrial production.
Ethiopia’s growth versus dollar-denominated output
Ethiopia’s projected position reflects the distinction between real economic growth and nominal GDP measured in US dollars. While real GDP growth captures changes in domestic production after accounting for price changes, nominal GDP expressed in dollars is also affected by inflation and movements in the exchange rate.
The depreciation of the birr following Ethiopia’s July 2024 shift toward a more market-determined foreign-exchange system substantially reduced the dollar valuation of its output. The reform formed part of the government’s broader economic programme, supported by an approximately US$3.4 billion IMF Extended Credit Facility.
As Addis Standard reported last week, Kenya’s emergence as East Africa’s largest economy in dollar terms was similarly shaped by exchange-rate movements, with the comparatively stronger performance of the Kenyan shilling increasing the dollar value of its economic output.
The IMF’s October projections indicate that Ethiopia’s economy is expected to grow by 9.2% in 2026 and 7.8% in 2027, while Kenya’s growth is forecast at 4.5% and 4.7%, respectively. The figures highlight how an economy can record faster real growth without maintaining a higher ranking when GDP is measured in US dollars.
The projected shift involving Ghana therefore does not, by itself, establish that its underlying economy is growing faster than Ethiopia’s. Rather, it underscores the influence of exchange-rate movements and macroeconomic conditions on the relative dollar value of African economies.
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The IMF projects Sub-Saharan Africa’s economy to grow by 4.5% in both 2026 and 2027. However, its October WEO, titled Resilience Under Strain, Urgent Choices, warns that high debt-servicing costs, limited foreign-exchange reserves and declining aid are constraining governments’ ability to respond to economic shocks.
For Ethiopia, the projected change in Africa’s economic rankings highlights the challenge of sustaining rapid domestic growth while managing currency pressures, inflation and foreign-exchange constraints. For Ghana, moving ahead in nominal GDP terms would mark a recovery in its relative economic position, but translating that ranking into lasting gains in investment, employment and industrial development remains a separate challenge.
