Development Economist and Research Fellow at the University of Ghana’s Centre for Social Policy Studies (CSPS), Dr George Domfeh, has questioned the sustainability of the economic gains being recorded under the National Democratic Congress (NDC) government, warning that efforts to stabilise the cedi through foreign exchange interventions may not provide a lasting solution to the country’s economic challenges.
He argues that injecting dollars into the foreign exchange market to support the local currency should not be mistaken for sound or innovative economic management, particularly if such interventions are not backed by improvements in domestic production, job creation and the broader productive sectors of the economy.
In a Facebook post, Dr Domfeh expressed reservations about descriptions of the government’s economic performance as extraordinary, suggesting that the apparent stability of the cedi could be temporary if it depends heavily on external inflows rather than sustainable economic fundamentals.
He described the strategy as a cosmetic intervention that could create an impression of economic stability without addressing underlying structural weaknesses.
“It is amusing to hear some Ghanaians describing the NDC government’s performance as extraordinary. Pumping dollars into the market to artificially prop up the cedi and create an illusion of economic stability is hardly an ingenious economic strategy. It is a temporary cosmetic fix, not sustainable economic management,” he stated.
The development economist further questioned the resilience of Ghana’s recent economic gains, particularly in the event of a decline in international gold prices or a reduction in foreign exchange inflows.
He warned that an economy whose currency stability depends significantly on favourable external conditions could face renewed pressure if those conditions change.
“What happens when gold prices fall and external inflows dry up? Will the celebrated economic miracle collapse overnight?” he asked.
His concerns highlight the importance of assessing the sustainability of Ghana’s foreign exchange position beyond short-term improvements in the cedi’s performance.
Although foreign exchange interventions can help ease market pressures and support currency stability, Dr Domfeh’s argument is that such measures should be complemented by policies that strengthen domestic production, expand exports and improve the economy’s capacity to generate foreign exchange independently.
Beyond the stability of the cedi, Dr Domfeh also questioned the extent to which the government’s economic approach is creating employment opportunities for Ghanaians.
He argued that supporting the local currency through dollar injections does not, by itself, address unemployment or generate the productive economic activities needed to improve living standards.
“This lazy approach hardly creates jobs!” he added.
His comments suggest that the government’s economic performance should be evaluated not only through exchange rate movements and other macroeconomic indicators but also through tangible improvements in employment, business expansion, industrial growth and household welfare.
The intervention adds to the ongoing national debate over the NDC government’s economic management and whether improvements in key macroeconomic indicators represent a sustainable recovery or are partly driven by favourable external conditions.
Dr Domfeh’s central concern is that Ghana must build a resilient and productive economy capable of sustaining currency stability and economic growth even when international commodity prices decline or external financial inflows weaken.
By 1960news.com
