2026 Budget Statement: Hon. Kojo Oppong Nkrumah Warns “The Dollarization Of The Economy Has Not Stopped”
In a sharp response to the 2026 Budget Statement, Hon. Kojo Oppong Nkrumah, MP for Ofoase Ayirebi, has raised serious concerns over the continued dollarization of Ghana’s economy. According to him, the budget fails to address the underlying issues undermining the cedi, and the trend of relying on foreign currency remains unbroken.
A Budget of Illusions?
Oppong Nkrumah argues that while the 2026 Budget Statement highlights macroeconomic stabilisation, it glosses over deeper systemic problems particularly Ghana’s dependence on the U.S. dollar in economic transactions. Despite efforts to stabilise the cedi, he warns, the dollar still dominates, reflecting a lack of confidence in the local currency.
He suggests that the government’s monetary and fiscal tools are not strong enough or appropriately aligned to reverse the entrenched dollarization trend. In his view, allowing this dependency to persist carries long-term economic risks, including vulnerability to external shocks and a weaker local financial system.
Sterilisation and Liquidity Drain
One of Nkrumah’s most pointed critiques is the government’s aggressive liquidity absorption. He claims that approximately GHC 60 billion has been sterilised locked away at the Bank of Ghana in an effort to control inflation.
While he acknowledges that sterilisation is a legitimate monetary tool, he warns of its side effects: by removing such large sums from circulation, the government may be starving local businesses of growth capital. According to him, the funds could instead have been channelled into productive sectors such as the Venture Capital Trust Fund (VCTF) or the Ghana Stock Exchange, to promote job creation and sustainable growth.
Dollar Reserves: A Band-Aid, Not a Cure
Nkrumah also highlights that the Bank of Ghana has tapped into its foreign reserve buffers injecting more than $2 billion into the foreign exchange market. While this intervention may have temporarily stabilized the cedi, he warns that it’s not a long-term solution for economic resilience.
Moreover, he draws attention to reports suggesting that the government has used over $4 billion from its reserves in recent years to prop up the currency. This, he argues, may give the appearance of strength in the short run, but risks undermining reserve sustainability if dollar dependence continues unabated.
Gold-for-Oil: A Silver Lining, But Not Enough
On a more optimistic note, Nkrumah affirms the importance of Ghana’s Gold-for-Oil initiative. As part of Ghana’s forex management strategy, this program has reportedly facilitated fuel imports worth around $1.7 billion, leveraging gold exports to shore up the country’s foreign exchange earnings.
He also welcomes the Bank of Ghana’s plan to hedge part of Ghana’s gold reserves — a move he describes as forward-looking and potentially helpful in building more robust forex buffers.
Still, he cautions that such measures, though positive, do not fully resolve the deeper issue: Ghana remains overly exposed to foreign currency, and the budget does not articulate a clear, long-term strategy to de-dollarize.
A Call for Structural Reforms
In his critique, Hon. Oppong Nkrumah calls for structural reforms rather than short-term fixes. He urges the government to:
- Reallocate sterilised liquidity to sectors that can generate long-term value (e.g., capital markets, entrepreneurship).
- Strengthen the cedi’s role in trade and pricing, reducing reliance on the dollar.
- Bolster reserve sustainability by balancing interventions in the forex market with strategies that generate durable foreign exchange inflows (such as gold exports).
- Align fiscal and monetary policy to support production, investment, and jobs rather than relying primarily on forex interventions.
The Bigger Picture
Nkrumah’s concern is not merely technical he frames the dollarization issue as a systemic risk to Ghana’s economic sovereignty. By allowing foreign currency to dominate, he argues, the government is perpetuating a cycle that undermines local institutions and weakens Ghana’s ability to chart an independent monetary future.
In conclusion, the MP for Ofoase Ayirebi warns that unless the 2026 Budget is matched with bold reforms, Ghana may continue flirting with stability but remain dangerously dependent on the dollar.
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