Haruna Iddrisu: Akufo-Addo Supervision Left Ghana’s Economic System in Structural Disaster

Introduction

The economic trajectory of Ghana has become the focal point of intense political and public scrutiny following a stark assessment by Haruna Iddrisu, the Member of Parliament for Tamale South and Minister of Education. In a recent interview, Mr. Iddrisu leveled significant criticism against the previous administration of Nana Akufo-Addo, accusing it of inflicting “long-term damage” on the national economy. This critique moves beyond temporary economic shocks, suggesting that the root causes of Ghana’s financial woes lie in deep-seated structural imbalances and policy mismanagement. As the country grapples with the aftermath of high inflation and currency depreciation, understanding the validity and implications of these claims is essential for anyone interested in Ghana’s economic future, Ghana economic news, and the dynamics of Ghana fiscal policy.

Mr. Iddrisu’s commentary highlights a critical debate: to what extent is the current economic hardship a legacy of the past administration versus the result of global pressures? By examining the specific data points cited—such as inflation rates and exchange rates—we can gain a clearer picture of the Ghana economic crisis and the challenges facing the new government in reversing these trends.

Key Points

Background

To fully grasp the context of Haruna Iddrisu’s statement, one must look at the economic history of Ghana leading up to the 2024 general elections and the subsequent handover in January 2025.

The Akufo-Addo administration (2017–2024) initially campaigned on a platform of “fixing the economy,” achieving fiscal consolidation, and reducing unemployment. However, the administration’s second term was hit by a series of external shocks, including the COVID-19 pandemic, the Russia-Ukraine war (which spiked global fuel and food prices), and a general tightening of global financial conditions.

By 2022, Ghana faced a debt crisis where it was unable to service its international bonds. This necessitated a domestic debt restructuring (DDEP) and a $3 billion IMF Extended Credit Facility agreement in May 2023. While the administration argued that these measures were necessary to restore stability, critics like Mr. Iddrisu argue that the policies implemented to reach this point—including what they characterize as excessive borrowing and spending—created the “structural disaster” the current government inherited.

It is in this context that the current administration, led by President John Mahama, has had to continue with IMF program reviews while attempting to fulfill campaign promises, such as the “24-hour economy” and “Youth Authority” initiatives. Mr. Iddrisu’s comments reflect the frustration of a ruling party that believes the previous administration left them with a “broken” economic engine.

Analysis

Haruna Iddrisu’s assessment provides a critical lens through which to view Ghana’s macroeconomic health. His use of the term “structural disaster” is significant in economic discourse. It suggests that the problems are not merely cyclical but systemic.

Deconstructing “Structural Imbalance”

When economists discuss structural imbalances in the context of Ghana, they often refer to:

1. Revenue-Expenditure Mismatch: A situation where government spending consistently outstrips domestic revenue generation, leading to high fiscal deficits.
2. Debt Overhang: A debt-to-GDP ratio that becomes unsustainable, choking out space for development spending.
3. Import Dependency: A reliance on imported goods (fuel, rice, machinery) that exposes the economy to external currency shocks.

Iddrisu’s argument posits that the Akufo-Addo administration exacerbated these issues rather than solving them.

The Role of the COVID-19 Pandemic

A key part of the analysis is the debate over causality. The previous administration often cited COVID-19 as the primary disruptor. However, Mr. Iddrisu challenges this narrative by pointing out that the economic decline went beyond pandemic-related global trends. By highlighting that inflation reached 54% and the Cedi depreciated to GH¢16, he argues that domestic policy mismanagement—such as poor expenditure controls or delayed fiscal adjustments—turned a global crisis into a local catastrophe.

The Cost of Doing Business

The statement that the economic conditions “crushed the private sector” is backed by economic theory. When the local currency depreciates rapidly, businesses that rely on imported raw materials face skyrocketing costs. If they pass these costs to consumers, demand drops. If they absorb them, margins shrink, leading to business failure. Mr. Iddrisu’s analysis suggests that the previous government failed to protect the productive base of the economy during this volatility.

Practical Advice

For readers seeking to understand how these high-level political statements affect their daily lives and financial decisions, consider the following practical insights regarding the Ghanaian economy.

Understanding Inflation Trends

Mr. Iddrisu mentioned inflation dropping from 54% to 23%. While a drop is positive, 23% remains very high. For the average Ghanaian:

• Savings: High inflation erodes the value of money sitting in bank accounts. Consider diversifying savings into assets that historically hold value during inflation, such as treasury bills (if rates beat inflation) or tangible assets.
• Budgeting: Prices are still rising, just slower. Household budgets must account for continued price increases in food and utilities.

Monitoring Exchange Rates

The exchange rate cited (GH¢16/$) is a benchmark of past volatility. Although the rate has fluctuated since then, the sensitivity of the Cedi to global factors remains.

• For Importers: Hedging against currency risk is crucial. Businesses should monitor Bank of Ghana interventions closely.
• For Consumers: Be aware that a strengthening Cedi usually lowers fuel prices and import costs, while a weakening Cedi has the opposite effect.

Private Sector Resilience

If you are a business owner or professional:

• Reduce Reliance on Imports: Where possible, source raw materials locally to insulate your business from exchange rate shocks.
• Efficiency: The “crushed private sector” environment implies tight margins. Focus on operational efficiency and cost-cutting measures to survive the current economic climate.

FAQ

Conclusion

Haruna Iddrisu’s assessment of the Akufo-Addo administration serves as a stark reminder of the fragility of economic stability. By characterizing the previous administration’s tenure as a period of “structural disaster,” he underscores the immense challenge facing the current government in rebuilding the nation’s finances. The data points regarding the 2022 economic “abyss,” the spike in inflation to 54%, and the currency depreciation to GH¢16/$ paint a vivid picture of a distressed economy.

While the debate over the extent of external versus internal causes will continue, the reality for the Ghanaian populace remains the same: navigating an environment of high costs and economic uncertainty. The path to recovery, as Mr. Iddrisu suggests, will not be instantaneous. It requires sustained, prudent fiscal management to correct the structural imbalances that have plagued the economy. For investors, business owners, and citizens, staying informed on these macroeconomic indicators is the first step toward adapting to the changing financial landscape.