Prominent Ghanaian economist, Professor Patrick Asuming, has urged the government to rethink its economic strategy, emphasizing the need to reduce the country’s reliance on foreign financing to ensure long-term currency stability.
Speaking during a panel discussion, Professor Asuming highlighted that despite Ghana’s consistent trade surpluses since 2017, the cedi remains vulnerable due to the economy’s heavy dependence on external funding and foreign debt servicing.
“Ghana’s trade balance has been in surplus for several years, but this positive trend is often overshadowed by the pressure exerted on the cedi due to foreign debt repayments and profit repatriations by multinational firms, especially in the first quarter of each year,” he explained.
According to Professor Asuming, this structural weakness in the economy needs urgent attention if Ghana is to break the cycle of periodic currency depreciation and economic instability.
He proposed a gradual shift towards domestic financing over the next five to ten years, stressing that such a move would reduce the strain on the cedi while fostering sustainable economic growth.
“In the short term, we need to cut back on unnecessary imports, particularly food items that can be produced locally. Our heavy reliance on imported food is a significant contributor to the trade imbalance and weakens our local currency,” he added.
Professor Asuming’s comments come at a time when Ghana is grappling with rising inflation and fluctuating exchange rates, underscoring the need for a more self-reliant economic framework.
