Ghana finds itself at a strategic juncture, navigating relations between traditional Western allies (United States, Canada, France, United Kingdom, Japan, Italy, and Germany) and the emerging powers within BRICS (Brazil, Russia, India, China, and South Africa).

The West offers long-standing financial aid, trade opportunities, and institutional support, while BRICS nations present access to new markets, development financing, and potential independence from Western-imposed conditions.

The choice of alignment will be crucial in shaping the future trajectory of the Ghanaian economy.

During the 2025 Presidential Inauguration, John Dramani Mahama highlighted the effect that the western countries and BRICS have on the global economy.

“There is a seismic shift happening within the system of global economic dominance. Whereas the G7 nations the United States, the United Kingdom, Canada, France, Germany, Italy, and Japan once provided the highest percentage of the world's GDP, over the last decade, that number has been steadily dropping… So, what does this mean for us in Ghana? What could it mean for our economy? Where do we fit within this geopolitical maelstrom?” – John Mahama

Given Ghana's longstanding reliance on Western countries for trade and financing to support growth, any pivot toward BRICS would necessitate significant reforms to its existing international relationships and economic frameworks.

The Good from the West

Over the years, Ghana’s collaboration and dealings with the West have provided a level of economic stability and access to financial resources. Institutions like the International Monetary Fund (IMF) and the World Bank have been instrumental in providing critical support during economic crises.

For example, in 2015 alone, the Ghanaian government secured a $918 million loan from the IMF to bolster the cedi and stabilize the economy.

Furthermore, Ghana is currently undergoing its seventeenth (17th) financial assistance program with the IMF, highlighting its recurring reliance on such support.

Also, the United States, Ghana's largest bilateral development partner, provided approximately $150 million through the U.S. Agency for International Development (USAID) from 2023 to 2024 to support education, health, economic growth, agriculture, and governance.

These partnerships have helped fund infrastructure projects, education, and healthcare, contributing to the nation’s development.

Ghana’s Dollar Dependence and Economic Challenges

A core issue underpinning Ghana’s economic struggles is its reliance on the US dollar for trade, debt servicing, and imports.

According to the 2024 Office of the Special Adviser on Africa (OSAA) Flagship Report on Unpacking Africa’s Debt, Ghana is among the African countries with 80% of its external debt quoted in US dollars.

As an import-dependent economy, fluctuations in the dollar directly affect inflation, fuel prices, and overall economic stability.

This dependence has exacerbated periodic currency depreciation, complicating financial obligations and further straining the economy.

BRICS as an Alternative

Aligning with BRICS could provide Ghana opportunities to reduce its dollar dependence by trading in alternative currencies, such as the Chinese Yuan or the Indian rupee.

BRICS nations are actively promoting mechanisms to bypass the dollar in international trade, potentially easing Ghana’s exchange rate pressures.

Moreover, BRICS-backed infrastructure and industrialization funding often comes with more flexible repayment terms and fewer dollar-linked conditions, offering a pathway to greater financial autonomy.

Risks of Overdependence on BRICS

However, pivoting too far toward BRICS could jeopardize Ghana’s relations with Western institutions like the International Monetary Fund and World Bank.

These entities have historically provided critical financial support during crises, and strong ties with the West ensure continued access to dollar-based markets, grants, and loans. All these resources vital for Ghana’s fiscal stability.

For instance, China has been instrumental in funding critical infrastructure projects across Africa, including roads, railways, and energy plants. Since the turn of the millennium, Ghana has received nearly $5 billion in funding through at least 41 Chinese project loans, significantly contributing to the country's development.

However, this approach is not without significant risks. Overreliance on China could result in debt distress, a scenario already observed in several African nations burdened by substantial debts to Chinese lenders.

A 2020 report on Africa’s debt to China highlighted that, on average, borrowing from China constitutes 5.3% of the Gross Domestic Product (GDP) of the borrowing African countries.

Moreover, while BRICS nations offer financial assistance, their support often aligns with their own strategic interests, which may not always align with the long-term development goals of the recipient countries. This dynamic raises concerns about the sustainability and mutual benefit of such partnerships.

The Path Forward

Ghana, under president Mahama, is at crossroads of both a challenge and an opportunity.

As global economic power shifts, the nation has the chance to redefine its role on the international stage. By balancing partnerships with both traditional Western allies and the emerging powers of BRICS, Ghana can chart a path toward economic resilience and growth.

Success will depend on thoughtful policy decisions, strategic engagement, and a commitment to safeguarding the nation’s interests in an increasingly multipolar world.

This approach requires deft diplomacy and diversified economic policies to harness the benefits of both alliances without over-reliance on either.

Samuel Okudzeto Ablakwa, during his vetting for the Minister of Foreign Affairs position on January 31, 2025, affirmed Ghana’s balanced approach to geopolitics when questioned about the country’s positioning.

He referenced a 1959 foreign policy doctrine initiated by Osagyefo Dr. Kwame Nkrumah, emphasizing Ghana’s commitment to strategic neutrality and non-alignment in global affairs.

“He[Kwame Nkrumah, 1959] talked about Ghana's foreign policy being positively neutral that we shall not look left or right, but forward... Therefore, we want to keep an open mind.

However, the assurance I can give you, based on our foreign policy, is that we remain friends of all and enemies of none.”- Samuel Okudzeto Ablakwa