Fundamentals, not external shocks, driving cedi depreciation – Prof. Abakah

A study by Professor Alex Annan Abakah challenges the idea that external shocks like COVID-19 and the Russia-Ukraine war are primarily responsible for Ghana's economic struggles.

The research shows that weak economic fundamentals, not global events, are the main drivers of the Cedi’s 28% depreciation in 2024. Only 11% of the depreciation is linked to COVID-19, with the Russia-Ukraine war having little impact.

Ghana’s high interest-to-revenue ratio (47.27% in 2022) limits investment in productive sectors.

The study emphasizes the need for fiscal discipline, investment in infrastructure and human capital, and stricter foreign exchange regulations.

It calls for strengthening domestic economic fundamentals to ensure long-term stability and resilience against external shocks.