Economic Stability Key to Business Planning and Livelihoods – Economist
By: Solomon Nartey Tetteh
Development Economist Dr. George Domfe has underscored the critical importance of economic stability, describing it as a vital foundation for business planning, economic growth and improved livelihoods.
Speaking on Business Breakfast on Zed 101.9FM, Dr. Domfe dismissed claims that economic stability offers little benefit, stressing that stability is essential for both businesses and households.
“Whoever says economic stability is not good may not be telling the truth. Economic stability is very good because anytime a country enjoys stability, it helps businesses to plan,” he said.
Dr. Domfe recalled the severe exchange rate volatility experienced in 2022, which he said had devastating consequences for businesses, particularly those heavily dependent on foreign exchange.
He explained that the cedi’s rapid fluctuations within a short period created uncertainty and instability in the market. According to him, such volatility made it difficult for businesses to forecast costs, price goods and services, and honour contracts.
“It was not good to see a situation where the dollar kept rising and falling sharply within the same year. In that process, businesses suffered. A lot of businesses collapsed, especially those that depended on the exchange rate,” he noted.
The economist described exchange rate instability as one of the most damaging forms of macroeconomic volatility, noting that it erodes investor confidence and disrupts economic activity.
Dr. Domfe, however, expressed optimism about the current economic environment, stating that Ghana is now enjoying relatively smooth macroeconomic stability, which he described as “excellent.”
“Today, we are enjoying smooth macroeconomic stability, and that is very good. If nothing at all, it helps businesses to plan,” he said.
He further noted that economic stability has a direct impact on the livelihoods of citizens, highlighting recent reductions in fuel prices as a clear positive outcome.
“One of the positive aspects is the reduction in pump prices. If you go to buy fuel today, a litre is hovering around 10 cedis, and to me, that is positive,” Dr. Domfe said.
Dr. Domfe noted that while challenges remain, maintaining macroeconomic stability should remain a top priority, as its benefits cut across businesses, households and the broader economy.
