President John Dramani Mahama recently outlined the exceptional economic growth that Ghana has experienced, and attributed this progress to their disciplined fiscal policies, mindful spending habits, and economic reforms. In a press meeting held at the Jubilee House, he relayed his contentment with the positive effects of the reforms that his government has instituted. He voiced his pleasure at the positive outcomes of the actions that were undertaken to improve the nation’s economic health. ‘Without resorting to external borrowing or the capital market, we managed to uphold our economy. Who could have predicted that our nation could sustain itself without resorting to external loans? Yet, we persevered and thrived,’ he stated.
President Mahama went on to articulate that the Government’s focus had been on reorganizing expenditures and directing resources towards the most significant sectors of the Ghanaian economy. He noted, ‘We’ve directed our resources towards pivotal sectors and streamlined our expenditures. The practice of fiscal discipline and avoiding unnecessary political expenses has resulted in positive market outcomes.’ He stressed the immediate success of these measures in stabilizing the economy.
Speaking on fiscal markers and primary balance, President Mahama revealed that Ghana has witnessed a notable improvement in its primary balance. ‘From a deficit of 3.5, we have now reached a surplus of 1.1. We anticipate this will reach 1.5 by year’s end. This progress is both clear and exciting evidence that our fiscal consolidation strategies are effective,’ he stated confidently.
President Mahama made it clear that he does not endorse a hasty return to the international capital market. Instead, he insisted, ‘We need to fortify our economy before considering external financing.’ He emphasized the importance of maintaining discipline concerning expenditures, asserting it as the only way to assure sustainable growth for the nation.
The topic of the recent performance of the Ghanaian Cedi was also a prominent point of discussion during the meeting. Acknowledging the pressures the local currency has encountered, the President indicated that the ongoing reforms have led to a sharp appreciation. He noted, ‘We have observed a remarkable increase in the value of the Cedi due to the enacted reforms. Its value fluctuated between being undervalued at 16 and overvalued at 10. The actual value likely lies in between. Our primary focus is to halt the swift depreciation of the currency.’
The President cautioned against erratic fluctuations in the value of the Cedi, as they hinder economic planning. He recalled an instance in 2024 when the Cedi experienced a significant depreciation of 25% in just the first half of the year. Though the Bank of Ghana intervened in the Forex market, it later withdrew once the increasing rate of imports spurred rapid appreciation. ‘This sudden appreciation created difficulties for our exporters who found it difficult to secure dollars in this market,’ he noted.
The President explained further, ‘Ideally, a nation tries to achieve an equilibrium where both its exporters and importers are neither heavily advantaged nor disadvantaged by the forex rates. Though I cannot pinpoint where this balance could perfectly be, signs are visible that the Cedi is gradually adjusting towards it.’ He envisaged that the currency would stabilize while operating within a controlled range, aiming to keep any depreciation within an annual limit of 5%.
Moreover, President Mahama pointed out that the expectation of a currency readjustment led to speculation, resulting in an alarming 50% reduction in remittances from the Diaspora. Consequences were apparently seen as individuals delayed their transfers with the hope of gaining from any future readjustment in the currency.
President Mahama raised concerns over wrongful practices within their forex system. He spotlighted instances where some currency transfer firms were keeping dollars offshore, while some were failing to bring funds back home. He declared, ‘In several instances, commercial banks released foreign exchange for imports, but the corresponding goods fell short in arriving. Over the past quadrennium, about $42 billion has exited our country without corresponding imports.’
He confirmed that several banks had faced penalties by the Bank of Ghana, and investigations would soon extend to individuals involved in the malpractices. He asserted that safeguarding the Cedi was vital for preserving investor confidence and economic stability. The President further stressed, ‘A robust Cedi benefits every one of us, but when unscrupulous people exploit the system, we won’t hesitate to take stern measures.’
Touching upon international trade affairs, Mahama revealed that the current U.S. tariff policy has pushed Ghana to seek new trading opportunities, specifically with China. He said, ‘Offering zero tariffs, China has emerged as an appealing market. They import massive quantities of agricultural products like maize and meat, primarily from the U.S. By ramping up our agricultural production, we can potentially leverage this demand surge.’
Still, he warned against the harm that a tariff war could inflict, emphasizing that no country could emerge victorious in such a battle. ‘The American approach of disrupting the decades-old rules-based trading system has had significant effects. Despite Ghana receiving a harsh 15% tariff, effectively nullifying AGOA, our hope lies in Congress’s intervening for renewal.’
Reviewing America’s global influence, President Mahama expressed, ‘The U.S. has earned respect among African nations on the back of concessions like zero tariffs and developmental aid. However, President Trump’s transaction-first approach has significantly dimmed this goodwill.’ Indeed, the judicial review of the legality of Trump’s tariffs is currently under review by the U.S. Supreme Court.
Finally, President Mahama emphasized the need for Ghana to continue focusing on its commitment to fiscal discipline, controlled spending, and stabilization of the Cedi before considering re-engaging with international capital markets. He postulated, ‘As we aim to solidify our economy and pull in more investors, it is imperative we protect the Cedi and ensure discipline in our public spending. This forms the foundation for consolidating our progress and securing the future of Ghana.’
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