Former Bank of Ghana Officials Reflect on Fiscal History as New Economic Frameworks Emerge under President Mahama

Dr. Ernest Addison, the former Governor of the Bank of Ghana, has been appointed as a Short-Term Senior Research Fellow at Harvard University’s Center for International Development and Center for African Studies. His appointment, effective October 2025, provides a platform for him to reflect on his tenure, which spanned the global pandemic, the invasion of Ukraine, and Ghana’s eventual debt crisis. This transition coincides with a critical post-mortem of the nation's fiscal policies by Dr. Maxwell Opoku-Afari, the former First Deputy Governor, who recently highlighted the structural vulnerabilities that led to the 2022 economic collapse. According to Dr. Opoku-Afari, Ghana’s public debt ballooned from 38.9% of GDP in 2010 to 92.7% by 2022, largely driven by the utilization of US$15.59 billion in Eurobond borrowings for recurrent budget financing rather than self-repaying projects.

Dr. Opoku-Afari’s analysis paints a picture of 'unbalanced growth' where high GDP averages were offset by rising fiscal deficits and a heavy dependency on external borrowing. He noted that by 2022, debt service payments were consuming over 45% of government revenues, leading to the unilateral suspension of debt service payments in December of that year. This period of instability raised serious questions regarding the effectiveness of previous IMF-supported programs and the 'Ghana Beyond Aid' vision. The former Deputy Governor emphasized that while growth was spurred by cocoa, gold, and oil, the lack of diversification and election-driven spending left the economy exposed to external shocks, necessitating the urgent fiscal reforms that have shaped the current administration's agenda.

In the wake of these historical challenges, the current government under President John Mahama has overseen a notable macroeconomic turnaround. Recent reports indicate that inflation has been reduced from historic highs to approximately 4.6%, with GDP growth rebounding to 5.5%. However, this recovery has introduced a 'currency paradox.' While the Cedi has seen periods of relative strength—trading around 10.94 to the US Dollar in some sectors—local entrepreneurs and youth groups argue that an over-appreciated Cedi acts as a subsidy for imports. This makes foreign goods cheaper than locally manufactured products, particularly in agriculture, thereby threatening domestic job creation and the competitiveness of small businesses despite government efforts to ease the tax burden.

Looking forward, economic discourse in Ghana is shifting toward innovative structures such as the '24-Hour Economy' and the proposed National Productive Hours Framework (NPHF). Proponents suggest moving beyond simply extending business hours to creating a flexible labor pool that allows businesses to access productive labor based on demand without the burden of permanent hiring costs. Meanwhile, the currency remains a focal point for market observers; as of August 19, 2026, the Cedi was trading at 12.25 at forex bureaus, reflecting ongoing volatility. The synthesis of these reflections from past leaders and the implementation of new frameworks will be vital as Ghana seeks to sustain its recovery and ensure long-term fiscal resilience.