Development economist Dr. George Domfeh says Ghana’s current economic challenges are part of a long-standing pattern of fragility that stretches back decades, rather than the result of recent government mismanagement.
Speaking on Business Edge on Metro TV, Dr. Domfeh said Ghana’s economy has always been vulnerable to global shocks due to structural weaknesses.
“Our economy has always been fragile. Anything that happens in the global market automatically affects what happens here,” he said.
He traced the country’s debt history, noting that at the end of former President J.J. Rawlings’ tenure, Ghana’s debt-to-GDP ratio had reached 182 percent, putting the nation in a serious debt crisis.
He explained that under former President John Kufuor, Ghana joined the Heavily Indebted Poor Countries (HIPC) initiative, which led to significant debt cancellation and brought the ratio down to 26 percent by 2006.
However, Domfeh noted that the economy fell back into crisis by 2014, when the debt-to-GDP ratio climbed back to 71 percent.
“We had debt crises in 2014, 2015, 2017. It was part of a long cycle,” he said.
He also highlighted that Ghana’s growth between 2017 and 2019 benefited from the IMF’s extended credit facility signed in 2015, which helped stabilise the economy after years of structural challenges.
“You cannot talk about the progress Ghana made between 2017 and 2019 without referencing the IMF programme we signed in 2015,” he added.
Dr. Domfeh said the cedi’s stability over the five years from 2017 to 2021, moving gradually from GH¢4.20 to GH¢6.20 to the dollar, was an achievement in the context of Ghana’s historically volatile economy.
“For 61 good months, dollar to cedi was not a problem. It stagnated one of the best records for the cedi,” he said.
He explained that the government’s debt restructuring, covering commercial, eurobond, bilateral, and domestic debt, has been key to bringing total debt down from $60 billion at the end of 2021 to $49.3 billion in 2024.
“Yes, debt in terms of cedi has subsided, but it is the restructuring that has brought us to where we are,” Domfeh said.
The economist urged policymakers to focus on structural reforms and resilience rather than blaming current leadership for economic challenges.
“We need not do politics over this. We must learn from our history and build forward,” he said.
