Gold-driven Cedi stability masking deep structural fragility - IERPP warns
Bannor warned that celebrating current reserve figures without addressing Ghana’s underlying structural weaknesses creates a dangerous illusion of economic recovery.
The Institute of Economic Research and Public Policy (IERPP) has issued a stark warning to the Bank of Ghana and fiscal managers, cautioning against relying solely on record-high global gold prices to maintain macroeconomic stability. Senior Research Fellow Dr. Frank Bannor cautioned that while the central bank's gold acquisition strategy and market interventions have provided temporary relief to the Cedi, the underlying structural weaknesses of Ghana's economy create a dangerous illusion of recovery.
The institute highlighted that while the current exchange rate stability is driven by favorable terms of trade in gold, relying on primary commodities exposes the country to severe external shocks once the global commodity super-cycle corrects. The IERPP urged policymakers to focus on building competitive value-added manufacturing to generate resilient, multi-sector foreign exchange inflows before global market conditions shift.
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