Electricity on, cedi forged, prices falling — Ayariga says Ghana’s market system on correct practice – Life Pulse Daily

Introduction

In a surprising display of confidence, Ghana’s Majority Leader, Mahama Ayariga, has publicly endorsed the nation’s economic recovery, asserting that the country’s market system is on a “correct practice” trajectory. This optimism follows years of financial instability and market volatility. Speaking during the resumption of Ghana’s Parliament session, Ayariga highlighted key achievements in energy stability, currency strength, price reductions, and fiscal responsibility. This article dissects the claims, evaluates their validity, and explores implications for Ghana’s economic future.

Analysis of Economic Indicators

1. Energy Sector Stability: Lights On, Economy Boosted

The return of consistent electricity supply has been a game-changer for Ghana’s economy. After prolonged power cuts since 2022, the 2025 energy transformation has catalysed industrial productivity and consumer confidence. State-owned energy firms, alongside private sector investments, have modernised the grid, reducing blackouts to just two days in the past quarter. This stability is critical for consumer trust, as noted by Ayariga, and directly impacts sectors like manufacturing and retail.

2. Cedi Strength: A Fragileyet Positive Trend

The Ghana cedi’s recent rally against the US dollar—rising from GH₵10.00 to GH₵10.40 in six months—reflects renewed investor confidence. The Bank of Ghana attributes this to disciplined monetary policies, including rate hikes to combat inflation. However, analysts caution that this “forged” cedi could become vulnerable to global commodity price fluctuations, particularly oil, which anchors Ghana’s export revenues.

3. Inflation Control: From 30% to Single Digits

Ghana’s inflation rate, once soaring above 30%, has plummeted to 5.2% year-on-year in Q3 2025, per the Ghana Statistical Service. This decline is linked to subsidy reforms, reduced food import costs, and the cedi’s appreciation. While promising, economists warn that underlying structural issues, like agricultural inefficiencies, could reignite inflation if left unaddressed.

Summary

Mahama Ayariga’s parliamentary remarks underscore Ghana’s progress in stabilising its economy. Key metrics like electricity reliability, cedi depreciation reversal, and inflation control suggest a cautious optimism. However, challenges such as foreign debt risks and global economic headwinds require vigilance. This analysis separates fact from rhetoric to assess the sustainability of Ghana’s recovery narrative.

Key Points

Practical Advice for Businesses and Citizens

Adapt to Market Trends

Businesses should capitalise on reduced input costs by expanding production. Citizens may consider long-term investments in infrastructure or renewable energy, aligning with stable power supply trends.

Budget Smartly

Monitor inflation-adjusted spending. Prioritise essential goods and services, leveraging current price reductions to improve household savings.

Leverage Government Policies

Small entrepreneurs may explore tax incentives under the 2025 budget for sectors like agriculture and tech, promoted by the Ministry of Trade and Industry.

Points of Caution

Overconfidence in Currency Gains

While the cedi’s strength is welcome, its dependency on international markets poses risks. A sudden drop in oil prices or remittances could destabilise the local currency.

Sustainable Debt Management

The government’s “no new debt” pledge is commendable, but experts stress the need for transparent reporting to avoid hidden fiscal pressures. Public debt currently stands at GH₵52 billion, requiring rigorous oversight.

Grid Vulnerabilities

Though electricity availability has improved, renewable energy integration remains low. Solar adoption is still under 10%, leaving the grid reliant on aged hydroelectric dams prone to seasonal shortages.

Comparison: Ghana vs. Regional Peers

Ghana’s economic rebound lags behind Nigeria’s 2025 recovery but outpaces Sierra Leone. Unlike Côte d’Ivoire’s oil-dependent growth, Ghana’s diversified exports (cocoa, gold) offer resilience. Energy stability here rivals Kenya’s strides in grid management, though both face renewable energy gaps.

Legal Implications

The government’s debt management practices may face scrutiny under Ghana’s Public Financial Management Act 2003. Critics argue that delayed transparency in quarterly expenditure audits undermines accountability. Additionally, the energy sector’s reliance on the West African Gas Pipeline (WAGP) ties the market to international agreements, potential legal bottlenecks for aggressive expansion.

Conclusion

Ghana’s market system demonstrates tangible progress, with Ayariga’s claims largely supported by empirical data. However, sustainable growth requires addressing structural vulnerabilities. For stakeholders, balancing optimism with risk mitigation will be key to capitalising on this recovery phase.

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