Imagine Ghana's economy as a ship, and its foreign exchange reserves as the life raft. Right now, that raft is leaking, and a prominent economist is sounding the alarm! Professor Lord Mensah is urging Ghana's Finance Minister, Dr. Cassiel Ato Baah Forson, to take urgent action in the upcoming 2026 budget. His core message? Ghana is bleeding foreign exchange (Forex) due to excessive imports, and temporary fixes won't cut it.
Speaking on GTV’s Current Agenda show on November 15, 2025, Prof. Mensah emphasized the need for deep, structural reforms to safeguard the hard-won stability of the cedi in recent months. He pointed out that you can't completely overhaul an economy that once grappled with an exchange rate of GH¢17.4 to the dollar in just ten months. Stabilizing the currency, he argues, demands strategic investments and careful management of the nation's import bill.
And this is the part most people miss... It's not just about any imports. Prof. Mensah specifically highlighted the pressure exerted by poultry and oil imports, which consume a significant chunk of Ghana's Forex.
The 2026 Budget, according to Prof. Mensah, seemingly acknowledges this challenge by outlining long-term strategies to alleviate pressure on the cedi. One key initiative is setting targets for local poultry production to meet a certain percentage of Ghana's consumption by 2026, including supplying secondary schools. He believes such policies are crucial because short-term measures, such as drawing down on dollar reserves, are unsustainable in the long run.
"Every country with strong dollar reserves enjoys temporary stability," he stated, "but you cannot rely on reserves alone to hold the cedi. We need long-term structural measures." Think of it like this: using reserves is like taking painkillers for a chronic illness – it might relieve the symptoms temporarily, but it doesn't address the underlying cause.
But here's where it gets controversial... Prof. Mensah's emphasis on local poultry production might spark debate. Some argue that focusing solely on local production could lead to higher prices or lower quality compared to imported options. What are your thoughts on this approach? Is it a viable solution, or are there potential drawbacks we need to consider?
Prof. Mensah also noted positive trends: declining interest rates, inflation, and policy rates. This creates the expectation that loan costs should eventually decrease. However, he cautioned that banks won't rush into lending because they have to meticulously assess risk. He reminded everyone that interest rates were as high as 35–40 percent just a year ago, and banks need time to regain confidence before expanding credit.
"The banks’ money is not their personal money," he explained. "They manage funds belonging to the public, so they cannot simply give out loans without proper risk checks." This is a crucial point often overlooked. Banks act as custodians of public funds and must exercise due diligence.
Therefore, banks are acting prudently by holding onto capital while monitoring the economic landscape. If the downward trend in interest rates and inflation persists into next year, he anticipates banks will respond by increasing lending. This highlights the interconnectedness of various economic factors. One affects the other.
In conclusion, Professor Mensah believes that Ghana must combine short-term interventions with robust long-term policies to sustain stability, protect its Forex reserves, and foster economic growth. It's a delicate balancing act, requiring careful planning and execution.
But what do you think? Is focusing on local production the right strategy? Are there other import areas that deserve more attention? Will banks loosen their purse strings as quickly as we hope? Share your thoughts and opinions in the comments below! Let's discuss the future of Ghana's economy together.
