Minority Warns Against ‘Artificial Stability’ in Review of Mahama Administration – Life Pulse Daily

Introduction

The Minority Caucus in Ghana’s Parliament has issued a stark warning about what it describes as “artificial stability” in the current administration’s economic management. During a civil society review of President John Dramani Mahama’s supervision, the opposition group raised serious concerns about the sustainability of recent economic improvements, arguing that apparent stability masks deeper structural weaknesses that could lead to future economic crisis.

Key Points

Background

The economic review comes at a critical juncture for Ghana, as the country continues to navigate post-pandemic recovery challenges and implement IMF-supported reforms. The government has touted recent improvements in currency stability and inflation control as evidence of effective economic management. However, the Minority Caucus contends that these improvements are superficial and achieved through unsustainable means that could compromise long-term economic health.

Analysis

The Currency Stability Debate

The Minority’s central argument focuses on the government’s approach to currency stability. According to the Caucus, the relative calm in forex markets has been achieved through “aggressive forex market intervention and depletion of Ghana’s hard-earned gold reserves.” This intervention strategy, they argue, represents a short-term fix that creates the illusion of stability while depleting the country’s financial buffers.

The claim that over $10 billion was spent on forex interventions in 2025 alone raises serious questions about the sustainability of this approach. Such massive expenditure suggests that the currency’s stability is being artificially maintained rather than reflecting genuine economic fundamentals. The Minority’s warning that “stability achieved through reserve exhaustion is not success; it is deferred economic collapse” highlights the potential long-term consequences of this strategy.

Inflation Control and Economic Suffocation

On the inflation front, the Minority presents a nuanced critique of government policies. While acknowledging that inflation has been brought under control, they argue that this has come at the cost of economic vitality. The 2026 Budget’s admission that over GH¢60 billion has been withdrawn from circulation through sterilization policies is presented as evidence of “economic suffocation disguised as discipline.”

This sterilization approach, which involves the central bank removing excess liquidity from the financial system, can indeed be effective in controlling inflation. However, the Minority argues that it has gone too far, suppressing liquidity, weakening credit markets, and constraining business operations. Their statement that “inflation control that destroys economic life is not discipline; it is economic suffocation” captures the tension between price stability and economic growth.

Environmental and Ethical Concerns

The Minority’s concerns extend beyond pure economics to environmental and ethical considerations. Their allegation that gold sourced from illegal mining operations may be entering the national forex operations chain raises serious questions about the sources of the government’s intervention funds. The environmental and health implications of illegal mining are well-documented, and the suggestion that proceeds from such activities might be supporting official forex operations adds a troubling ethical dimension to the debate.

The Structural Reform Question

Underlying all these criticisms is a fundamental disagreement about the nature of effective economic management. The Minority argues that “governance must be grounded in structural reform and sustainability,” suggesting that the current administration’s approach is too focused on short-term stability at the expense of long-term economic health. Their statement that “Ghana cannot build its future on a currency peg sustained by structural economic weakening” encapsulates this critique.

Practical Advice

For policymakers and economic managers, this debate highlights several important considerations:

1. **Balance Short and Long-term Goals**: While short-term stability is important for public confidence, it should not come at the expense of long-term sustainability.

2. **Diversify Intervention Strategies**: Over-reliance on forex interventions and reserve depletion can create vulnerabilities. A more diversified approach to economic management may be more sustainable.

3. **Consider Economic Impact**: Inflation control measures, while important, should be calibrated to avoid unnecessarily constraining economic activity and growth.

4. **Ensure Ethical Sourcing**: Any funds used for economic interventions should be transparently sourced and ethically obtained.

5. **Focus on Structural Reforms**: Addressing underlying economic weaknesses through structural reforms may provide more sustainable stability than artificial interventions.

FAQ

Conclusion

The Minority’s warning against “artificial stability” presents a significant challenge to the government’s narrative of economic success. By highlighting the potential unsustainability of current economic management strategies, the Caucus has opened up a crucial debate about the nature of effective economic governance. As Ghana continues to navigate its economic challenges, finding the right balance between short-term stability and long-term sustainability will be crucial. The coming months and years will likely see continued debate and potential policy adjustments as the government responds to these criticisms and works to ensure genuine, sustainable economic progress.