The founding President of the policy think tank Africa Policy Lens, Dr George Domfe, has dismissed claims that the economic challenges Ghana faced in 2022 were a result of the actions and inactions of those in charge of managing the economy.
“The truth is that the 2022 economic turmoil was externally driven. For 61 good months, the Ghanaian economy has been stabilized with inflation well below 15.4% inherited from the previous administration,” he stated.
He explained that the Cedi had remained between GHS4.2 and GHS6.2 for 61 months, which is one of the best records for the local currency since 1957.
“In January 2022, Bank of Ghana had a total reserve of $9.9 billion (Mahama left $6.1 billion in 2016). This was enough to protect the local currency,” he said.
“Then suddenly, the Russian-Ukrainian crisis came from nowhere. Germany recorded its highest inflation in 70 years! Both the US and the UK recorded their highest inflation in 40 years! Oil moved from $72 a barrel to $121 a barrel! Above all, freight charges went up by 300%” he explained further.
These factors, the University of Ghana economist said, pushed the demand for foreign currencies to uncontrollable levels.
“By August 2022, BOG had almost run out of reserves and 1$ was exchanged for GHS 8.2. Unfortunately, with no buffer, the Cedi had no protection, and by October 2022, $1 was going for GHS 15 (interbank exchange rate market) and GHS17 (forex market)” he emphasized.
“No economist anywhere in the world can attribute the 2022 economic turmoil to mismanagement. Facts and figures don’t support such assertions” he stated.
Dr George Domfe was responding to critics who have accused the managers of the economy in 2022 for the challenges the country faced.
