Finance

Finance expert calls for comprehensive reforms to stabilise economy

The Senior Research Fellow at the Forum for Development and Accountable Governance (FDAG), Dr. Philip Takyi, has issued a stark warning about Ghana’s economic trajectory, highlighting severe inflation, currency depreciation, and an overwhelming national debt burden.

He urged immediate and comprehensive reforms to stabilize the economy and prevent further economic decline.

“In recent years, inflation in Ghana has reached unprecedented levels, recording as high as 40.3% before stabilizing around 21.5%. Though there has been some reduction, it is still at a level that heavily impacts the household budgets of Ghanaians,” Dr. Takyi stated, expressing concerns about inflation’s impact on the cost of living.

He added, “Inflation at these levels is unsustainable, and its ripple effects are being felt in every sector of the economy, from the price of basic goods to public services.”

He noted that a key factor in this inflationary pressure is the Ghanaian cedi’s sharp depreciation. The currency has dropped nearly 19.5% against the US dollar, now valued at approximately GH¢15.60 to $1.

“This devaluation is not just affecting the cost of imports but also impacting the prices of essential commodities,” Dr. Takyi explained, emphasizing how currency instability has intensified the cost-of-living crisis for both consumers and businesses.

He also expressed grave concerns over Ghana’s surging debt, which has now crossed 80% of GDP.

“The country’s debt situation has become a matter of national concern, significantly affecting the government’s capacity to fund crucial services like health, education, and infrastructure. Our extensive borrowing, initially intended for development and pandemic response, is now choking our fiscal flexibility,” he stated.

The policy analyst pointed to the government’s Domestic Debt Exchange Program as an additional strain on Ghanaian finances.

“The debt restructuring exercise, which saw over GH¢60 billion – including significant pension funds – being redirected to tackle debt, has caused widespread dissatisfaction. The plan was meant to provide some fiscal relief, but it has also severely impacted the savings and pensions of many citizens,” he noted. He warned that the government’s reliance on external funding, such as the recent $3 billion IMF bailout, is a temporary fix rather than a sustainable solution.

“Unless we initiate structural reforms, we risk falling into a perpetual debt trap,” Dr. Takyi cautioned.

He also critiqued the country’s limited success in digitalization efforts, noting, “Despite our investments in digital infrastructure, the expected transformative impact on sectors like agriculture, education, and job creation has not materialized.”

Highlighting the persistent issue of youth unemployment, he added, “Our youth remain largely unemployed, and we have yet to see digitalization contributing to meaningful economic growth in the way it was envisioned.”

In light of these challenges, FDAG’s Senior Research Fellow endorsed the National Democratic Congress’s (NDC) 24-hour economic policy as a potentially effective response. Describing it as “an innovative approach to real-time economic monitoring and timely interventions,” he argued that the policy would strengthen economic management and foster job creation.

“The NDC’s proposed policy can help stabilize the cedi, combat inflation, and instil greater investor confidence in the Ghanaian economy,” he observed.

Dr. Takyi concluded by underscoring the urgent need for decisive economic action.

“A robust, responsive strategy is necessary to steer Ghana through these economic challenges and address the immediate needs of our people. The NDC’s 24-hour policy approach could be the critical tool to help us weather this economic storm,” he stated.

 

Source: starrfm.com.gh

Ogyem Solomon

Solomon Ogyem – Media Entrepreneur | Journalist | Brand Ambassador Solomon Ogyem is a dynamic Ghanaian journalist and media entrepreneur currently based in South Africa. With a solid foundation in journalism, Solomon is a graduate of the OTEC School of Journalism and Communication Studies in Ghana and Oxbridge Academy in South Africa. He began his career as a reporter at OTEC 102.9 MHz in Kumasi, where he honed his skills in news reporting, community storytelling, and radio broadcasting. His passion for storytelling and dedication to the media industry led him to establish Press MltiMedia Company in South Africa—a growing platform committed to authentic African narratives and multimedia journalism. Solomon is the founder and owner of Thepressradio.com, a news portal focused on delivering credible, timely, and engaging stories across Ghana and Africa. He also owns Press Global Tickets, a service-driven venture in the travel and logistics space, providing reliable ticketing services. In addition to his media ventures, Solomon serves as a Brand Ambassador for Alabuga, a prominent Russian industrial company, representing their interests and expansion across Africa. He previously owned two notable websites—Ghanaweb.mobi and ShowbizAfrica.net—both of which contributed to entertainment and socio-political discussions within Ghana’s digital space. With a diverse background in media, digital journalism, and business, Solomon Ogyem is dedicated to telling impactful African stories, empowering youth through media, and building cross-continental media partnerships.

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