Economist Professor Peter Quartey has told President John Dramani Mahama and his government that Ghana is still highly vulnerable to external economic shocks.
The economist warned that due to Ghana’s dependence on imported fuel and gold exports, the country is still highly vulnerable to external economic shocks.
According to him, Ghana has limited buffers to cushion the economy from major global disruptions, adding that continued importation of processed fuel leaves the economy exposed to changes in international conditions.
Speaking on Joy News’ PM Express Business Edition, Prof Quartey stated, “Yes, you will notice that, I mean, for these countries that are even fighting, Iran, the U.S., and the rest, they have a buffer. They have oil reserves that they can fall on.”
He stressed that Ghana does not have the same level of protection.
“I mean, we basically have very little buffer to fall on, and therefore, when they sneeze, we catch a cold,” Prof Quartey said.
Professor Peter Quartey identified Ghana’s continued dependence on imported processed fuel as a major concern.
He stated, “And I think we are not processing enough of the oil. We are an oil producer, but we are not processing quite a good chunk of the oil. We continue to import processed fuel, and that is a big problem for us”.
“Secondly, we’re relying too much on fuel, petrol and, you know, crude, for instance, whereas in other countries, other forms of fuel, green energy, green transition is happening rapidly,” he said.
He noted that the slow pace of the transition to other energy sources further increases Ghana’s vulnerability.
“That is not happening so much with us, and I think that makes us very vulnerable to external shocks,” Prof Quartey said.
He further raised concerns about the structure of Ghana’s export earnings, noting that gold currently accounts for about 60% of the country’s export earnings.
“And if you even look at our exports, for instance, at the moment, gold accounts for almost 60% or 61% of our export earnings,” he said.
“That puts you in a very vulnerable situation,” he said.
“Should gold prices tumble, or should anything happen to the international market, we are likely to suffer the consequences.”
Meanwhile, President John Dramani Mahama has said Ghana’s economy is resilient and capable of withstanding external shocks.
According to John Mahama, Ghana’s economy used to stand on broomsticks; but today it is standing on concrete pillars.
Mahama noted that in the past Ghana’s economy was vulnerable to developments in the global economic environment, but argued that today the economy is stabilised despite international challenges.
Speaking during his accountability engagement in Wa at the weekend as part of his #ResettingGhana Tour of the Upper West Region, Mahama stated, “In the past, Ghana’s economy used to stand on broomsticks. As soon as something happens in the world, it comes crashing down. Today Ghana’s economy is standing on concrete pillars, so even when there’s an earthquake, the country is still standing.
“This Iran-Israel-US war, if it had happened some years back, by now the economy would have come crashing down, but happily it’s been well managed,” the President explained.
Mahama, however, noted that while the economy remained stable, external developments had slowed the pace of progress expected by the Government.
According to John Mahama, his government planned to invest GH¢2.5 billion annually in five key sectors of the economy under its proposed “new economy” initiative aimed at creating jobs and opportunities for young people.
President Mahama disclosed that the Minister of Finance would unveil the initiative in the 2027 Budget Statement, with investments targeted at sectors including pharmaceuticals, agriculture and agro-processing, tourism, and power generation.
“These are not going to be government businesses. Government is not going to set up state-owned enterprises with GH₵2.5 billion a year. It is going to go to the private sector to set up the businesses,” President Mahama indicated.
Mahama further urged entrepreneurs and private sector operators to take advantage of the opportunities to expand businesses and create employment for the youth.
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