The Institute of Financial Services (IFS) has urged the newly sworn-in government of President John Dramani Mahama to take decisive action to stabilize Ghana’s struggling economy.
Addressing a press conference, Dr. Said Boakye, the new Executive Director of IFS, outlined six key priorities he believes should guide the administration as it prepares its first budget and economic policy statement for 2025.
He highlighted that Ghana’s economy remains fragile despite the International Monetary Fund (IMF)-supported program introduced in 2023.
He stressed that high inflation, debt distress, and macroeconomic instability continue to hinder the country’s economic recovery and called on the Mahama-led government to implement bold and strategic reforms to restore stability and drive growth.
Dr. Boakye expressed concern over Ghana’s prolonged high inflation and currency depreciation, warning that these factors threaten economic stability. He noted that inflation, which peaked at 54.1% in December 2022, has remained above 20% for nearly three years, while the cedi depreciated by 19.2% in 2024 alone.
To address this, he urged the government to enforce strict fiscal discipline by reducing the budget deficit, controlling public debt, and limiting excessive money supply growth. He also called on the Bank of Ghana to adopt more effective monetary policies beyond simply adjusting interest rates.
Dr. Boakye lamented Ghana’s declining economic growth, which dropped from an average of 6.5% before the crisis to just 2.9% in 2023. He warned that unless urgent measures are taken, rising unemployment, particularly among the youth, will worsen.
To reverse this trend, he recommended prioritizing strategic investments in agriculture, which has the potential to drive job creation and economic expansion.
He proposed:
• Mobilizing youth into agricultural cooperatives with financial and land support.
• Expanding irrigation infrastructure to ensure year-round farming.
• Establishing local fertilizer manufacturing plants to reduce reliance on imports.
• Enhancing research and extension services to boost productivity.
Dr. Boakye criticized the ownership structures of Ghana’s key export sectors, particularly oil and gold, which he argued have failed to strengthen the cedi.
Despite an increase in exports to $17 billion in 2023, he noted that the cedi continued to depreciate, demonstrating the limited impact of these revenues on the economy.
To address this, he urged the government to:
• Increase Ghana’s stakes in oil and gold production through joint ventures.
• Transition from concession agreements to production-sharing models to retain a larger share of revenues in Ghana.
Dr. Boakye criticized past administrations for consistently overestimating revenue projections, which has undermined budget credibility. He revealed that between 2013 and 2023, actual revenue collection was, on average, 7.4% below budget targets.
To restore confidence in fiscal planning, he recommended:
• Overhauling the revenue forecasting process to eliminate overly optimistic projections.
• Strengthening tax revenue estimation methodologies.
• Engaging independent experts to assess revenue targets.
• Adopting conservative revenue estimates based on economic realities.
Dr. Boakye warned against Ghana’s historical reliance on external borrowing, which has led to repeated debt crises. He pointed out that the country’s inability to access international bond markets in 2022 triggered its most recent economic crisis.
To avoid future debt traps, he urged the government to:
• Resist the temptation to return to international bond markets for quick financing.
• Maintain strict fiscal discipline to reduce the need for external borrowing.
• Explore alternative funding models, including leveraging natural resources for self-sufficiency.
Dr. Boakye described corruption as a significant drain on Ghana’s economy, citing a 2021 survey that estimated 17.4 million bribes totaling GH₵5 billion were paid to public officials. He noted that, in addition to bribery, financial mismanagement in procurement, payroll fraud, and asset sales further weaken the economy.
He called on the government to take decisive action by:
• Prosecuting corrupt officials swiftly and impartially.
• Reforming public institutions to eliminate corruption-prone areas.
• Strengthening oversight and ensuring accountability in public sector operations.
The Road Ahead?
Dr. Boakye acknowledged that the new government faces an uphill battle in stabilizing Ghana’s economy. However, he expressed confidence that with fiscal discipline, economic diversification, strategic investments, and an uncompromising stance on corruption, the country can recover and achieve long-term economic resilience.
He urged the John Mahama administration to implement these recommendations with determination, warning that failure to act decisively could deepen Ghana’s economic woes and prolong hardship for its citizens.
