Fix Structural Weaknesses, Not Just Inject Dollars – Economist Cautions Government

Economic analyst Emmanuel Boateng has urged government to prioritise tackling the deep-rooted structural weaknesses of Ghana’s economy instead of relying solely on dollar injections to stabilise the cedi.

His advice follows the Bank of Ghana’s announcement of plans to inject up to one billion dollars into the foreign exchange market in November under its revised Foreign Exchange Market Intermediation Programme.

Speaking on the Business Breakfast show on Zed, Mr Boateng cautioned that while such measures may offer short-term relief, they are not sustainable solutions to the country’s economic challenges.

“At the heart of this, I think we have to be very vigilant,” he said. “If gold prices, which are the main source of these dollars, retreat from current high levels, then the inflows that are supporting both reserve accumulation and excess intervention could actually diminish.”

He explained that Ghana’s external position remains vulnerable to fluctuations in global commodity prices.

“If oil prices increase significantly, then our import bill will also increase, and that will pressure both the balance of payment and our reserve position,” he added.

According to Mr Boateng, the central bank’s planned interventions are flexible and dependent on prevailing market conditions and available reserves.

“Interventions are calibrated to available resources and broader reserve management needs. They are not fixed regardless of circumstances, and I think that is quite crucial for us,” he said

He emphasised that as long as initiatives such as the Gold for Reserves and other commodity-backed programmes continue to generate inflows, the Bank of Ghana can maintain its interventions without undermining debt servicing or reserve adequacy.

However, he cautioned that deteriorating global conditions could compel policymakers to make difficult choices.

“If gold prices drop significantly, if cocoa revenues reduce, if oil prices increase — then tough choices will emerge between market intervention, reserve preservation, and even debt settlement,” he noted.

Mr Boateng concluded by calling for a shift in focus from temporary fixes to long-term economic reforms.

“The real problem we have as a country is to fix our fundamental problems,” he stressed. “The real economy must grow, engineer growth, support growth, and be able to stabilise our assets. We do not only need to inject currency to stabilise things in this country.”

Analysts have long argued that Ghana’s economic stability depends not merely on interventions in the forex market but on improving productivity, strengthening exports, and reducing reliance on commodity price swings. Mr Boateng’s remarks add to the growing calls for government to adopt a more structural and sustainable approach to economic management.