Ghana’s increasing integration into the global economy has exposed the country to more frequent geopolitical shocks, but improved fiscal management has strengthened its resilience, according to economist and political risk specialist Dr Theo Acheampong.
Speaking on Joy News’ PM Express Business Edition on Thursday, the Technical Advisor at the Ministry of Finance observed that global crises are no longer once-a-decade occurrences but have become more frequent, with inevitable consequences for economies like Ghana.
“Gone are the times when every maybe 10 or so years, you would have a major geopolitical event. But what the last few years have taught us is that you should expect these things much more often than not,” Dr Acheampong stated.
He cited the Russia-Ukraine conflict as a典型案例 of how geopolitical tensions now transmit shockwaves across the global economy, triggering inflationary spikes and cost-of-living pressures that force governments to make difficult adjustments.
Domestic Policy Choices Critical
While external shocks are largely beyond Ghana’s control, Dr Acheampong stressed that domestic policy decisions remain crucial in determining how the country absorbs those shocks.
“What then is interesting and important is, if you assume that geopolitical uncertainty is the order of the day, what do you do as a country to respond to that?” he asked.
“So that’s what happens externally, you don’t really have much control over it. What you have control over is what you do internally.”
According to him, sound fiscal management and overall economic governance are central to strengthening the country’s resilience against external turbulence.
Lessons from 2022/23 Crisis
Dr Acheampong recalled that Ghana’s vulnerability to global shocks became painfully clear during the early phase of the Russia-Ukraine conflict, when underlying fiscal weaknesses amplified the impact.
He referenced the IMF’s May 2023 report, which noted that Ghana had “underlying fiscal vulnerabilities” before the war.
“That is why, when Russia-Ukraine happened, we felt the impact much more than we should have, and at one point, you even had the import covers around two weeks or so of reserves,” he explained.
Improved External Position
However, Dr Acheampong emphasised that Ghana’s economic situation has transformed significantly since the dark days of 2022/23.
“The situation is completely different now than it was in 2022/23. There has been more stability within the Ghanaian economy,” he said.
He pointed to improved trade balances and stronger reserve positions as key indicators of the country’s enhanced ability to withstand shocks.
Latest data from the Ministry of Finance and the Bank of Ghana show import cover has improved to approximately 5.7 months and continues to grow. The net trade balance stands at around a positive GH¢1 billion monthly, while the current account surplus is approximately $750 million.
These improvements have been supported by stronger earnings from gold and non-traditional exports.
Buffers Being Built
Responding to whether Ghana has now built adequate buffers to absorb global shocks, Dr Acheampong acknowledged progress while noting that more work remains.
“We have some savings to be able to help address these shocks if the pass-throughs come. Of course, you have to do more,” he said.
“But your first line of impact with these global events and these shocks, you feel it immediately from the external side—your trade balances, your current account—and we are in a much better position now from what we have in terms of reserves to be able to augment or support or withstand the shocks.”
The economist’s assessment suggests that while Ghana remains exposed to global economic turbulence, its improved fundamentals provide a stronger cushion than was available during the 2022/23 crisis.
