News Guide Africa

Tag: Ghana cedi

  • Short-term gains of Cedi should not lead to complacency’ – analyst warns

     

    APL warns: Cedi gains need lasting reforms.

     

     

    Adnan Adams Mohammed

     

     

    The Africa Policy Lens (APL), a new entrant in the policy think-tank space, has cautioned the managers of the economy to avoid complacency as the local currency – the Cedi – is witnessing a short-term appreciation.

     

    The research and policy analysts group, in a press statement issued last week, emphasized the need for continued reforms, urging the government to build on current momentum with permanent policy measures aimed at fiscal discipline, export diversification, and institutional transparency.

     

    The Cedi has appreciated by over 20% against the US dollar so far this year, making it one of the best-performing currencies globally. As of early-May 2025, the Cedi was trading at approximately GH¢13.5 to the dollar, reflecting a 17% gain since January, APL noted.

     

    “Short-term gains should not lull policymakers into inaction,” the group cautioned. “Sustainable growth depends on deep, structural reforms.”

     

    Meanwhile, the group highlighted factors that have accounted for the significant appreciation of the Ghanaian Cedi in recent months, making a notable turnaround after a difficult 2024. It cited a combination of factors including the government’s fiscal consolidation measures like a sharp reduction in public spending, suspension of new projects, and a freeze on the clearance of arrears which have helped reduce pressure on the currency.

     

    “The Ministry of Finance is reported to have held back payments worth about GH¢69 billion pending audit,” APL stated, “effectively curbing excess demand for foreign exchange.”

     

    At the same time, the Bank of Ghana (BoG) has played a central role through strategic interventions. Through the Domestic Gold Purchase Programme (DGPP), the BoG accumulated gold reserves that were later used to support the Cedi via gold-backed foreign exchange operations. Between January and May 2025, the central bank injected nearly US$1 billion into the forex market.

     

    “This included US$490 million in April alone and US$264 million in March,” APL noted, “which helped improve dollar liquidity and ease depreciation pressure.”

     

    “Drawing down reserves and delaying payments are not long-term solutions,” the think tank stressed however.

     

    APL also acknowledges the influence of external factors such as the weakening of the US dollar amid global trade tensions, which have contributed to the Cedi’s recent gains.

     

    APL further pointed out that Ghana has seen similar periods of stability before, particularly between 2017 and 2019 during the IMF Extended Credit Facility program. During that time, the Cedi was relatively stable due to improved fundamentals, disciplined fiscal policy, and external conditions such as rising oil production and commodity prices, thereby suggesting that today’s policymakers can learn from that period by focusing on long-term reforms instead of relying on interventions.

     

    “There are lessons from the past—particularly the 2017–2019 period—that show sustainable stability must be anchored in strong fundamentals, not ad hoc measures,” the organisation stated.

     

    Consequently, it indicated that analysts such as S&P Global Ratings and Fitch Solutions have already warned that the Cedi could face renewed depreciation in the second half of 2025 if structural imbalances resurface.

     

    “Global credit watchers are already flagging risks, and Ghana must act swiftly to insulate itself from renewed pressures,” APL emphasised.

     

    APL calls for stronger policy action, including the completion of debt restructuring, diversification of export revenue sources, and improved fiscal management. It also emphasizes the importance of transparent communication from government institutions to maintain investor confidence.

     

    “To maintain the current momentum, reforms must be bold, and communication must be clear to avoid spooking markets,” the group stated.

     

    In conclusion, APL states that while Ghana’s currency has shown impressive recovery, “the challenge now is to ensure these gains are not only preserved but built upon,” reiterating that “without long-term reforms, the current stability may not hold.”

     

     

  • Ghana Cedi @60: Bank of Ghana announces nationwide activities to mark anniversary

     Bank of Ghana marks 60 years of the Ghana Cedi with national activities to highlight its legacy.

     

     

    The Bank of Ghana has announced plans to commemorate the 60th anniversary of the Ghana Cedi, which has served as the nation’s sole legal tender since its introduction on July 19, 1965. The celebration, under the theme ‘Cedi@60’, will run from July to December 2025.

     

    In a public notice issued on May 13, 2025, and signed by the Secretary of the Bank, Sandra Thompson, the central bank highlighted the significance of the Cedi as a symbol of Ghana’s economic sovereignty, resilience, and development. Over the past six decades, the Cedi has undergone various reforms and modifications to meet the changing demands of the Ghanaian economy.

     

    As part of the anniversary celebrations, the Bank of Ghana will roll out a series of activities and engagements nationwide. These will include official launch events, public exhibitions, educational campaigns, and stakeholder forums aimed at deepening public understanding and appreciation of the currency’s history and importance.

     

    The Bank noted that the anniversary presents an opportunity for Ghanaians to reflect on the evolution of the Cedi, celebrate national progress, and reaffirm their responsibility to protect the value and integrity of the currency.

     

    The public, along with institutions, stakeholders, and development partners, is invited to participate in the commemorative events. Further details of the scheduled programmes will be announced in due course.

     

    The Bank of Ghana reaffirmed its commitment to maintaining a stable Cedi and ensuring general price stability in the economy.

     

     

  • Analysts predict further gains of the Cedi on the back of ‘balanced blend of monetary policies and economic activity’

     

     

     

     

    The Ghana cedi has emerged as the best performing currency in sub-Saharan Africa, supported by macroeconomic reforms, remittances, and rising cocoa prices.

    Adnan Adams Mohammed

    A financial analyst has defused assertions by some critics that the Ghanaian local currency, the cedi, is appreciating in value against major international trading currencies simply due to government’s use of the Bank of Ghana’s gold reserves to intervene on the foreign exchange market.

    Dr Richmond Atuahene indicated that the Cedi’s performance should be seen as the outcome of a balanced blend of prudent policies and economic activity trends.

    In recent weeks, the Cedi has gained strength to be the world’s best performing currency, according to Bloomberg’s analysis, after losing so much value to be the world’s weakest currency just a few years ago. As many Ghanaians are jubilating over this reversal of fortunes, most traders, and some critics of the government are downplaying the current government’s coherent economic policies and fiscal consolidation efforts resulting in the historic performance of the local currency. However, Dr Atuahene justifies his position against such criticism.

    “The cedi’s gains are the result of multiple economic forces working together,” Dr. Atuahene noted in an interview last week. “The currency is not strengthened because it is only gold having an impact. Let me tell you on record, remittances have been revamped in this country.”

    He explained that “A significant rise in foreign remittances has increased liquidity in the banking sector, improving banks’ access to forex and supporting overall currency stability.”

    He also cited surging cocoa prices on the international market as another critical factor.

    “Don’t forget cocoa. It will shock you to know that a year ago [in 2024], cocoa was sold at [US$)4,825 per metric tonne. Today, go to the market—we’re talking about [US$) 8,000,” he said.

    Beyond remittances and exports, he pointed to macroeconomic policies such as fiscal discipline and tightened monetary policy as important drivers behind the cedi’s resurgence.

    “All these things are the factors, in addition to the fiscal discipline, tightened monetary policy, and what have you. So, you can’t lay your hands on just the gold. Let’s get it that remittances are giving lots of banks forex” he added.

    Meanwhile, the cedi is projected to continue its upward momentum this week, buoyed by improved market sentiment, Bank of Ghana (BoG) support, and renewed investor confidence, according to Databank Research’s weekly currency update. Last week, the local currency emerged as the top-performing currency among 15 sub-Saharan African countries, continuing its upward trajectory on the back of robust liquidity and stabilizing macroeconomic fundamentals. The Ghana cedi recorded notable appreciation across major currencies: 6.25% against the US dollar (USD), 7.61% against the British pound (GBP), and 5.81% against the euro (EUR).

    In a significant endorsement of Ghana’s economic recovery efforts, S&P Global Ratings on May 9, 2025, upgraded Ghana’s long- and short-term foreign currency sovereign credit ratings from Selective Default (SD) to ‘CCC+/C’, while affirming local currency ratings at ‘CCC+/C’ with a stable outlook.

    The ratings agency attributed the upgrade to improved economic growth, ongoing fiscal reforms, a stronger external position, and a growing track record of prudent public financial management, particularly through election cycles.

    S&P’s decision reflects growing international optimism in Ghana’s economic trajectory, particularly under the stewardship of Finance Minister Dr. Cassiel Ato Forson.

    With macroeconomic reforms taking root, foreign exchange conditions improving, and international credit ratings trending upward, analysts anticipate the cedi will maintain its strength in the near term.

    “Investor sentiment is improving, and the central bank’s interventions continue to support the local unit,” Databank Research noted. “We expect further appreciation of the cedi in the coming week.”

    The rating upgrade is expected to bolster Ghana’s external financing opportunities, reduce debt vulnerabilities, and provide a firmer foundation for long-term currency stability.

    On the backdrop of the predicted elevated forecast for the Ghanaian economy, Dr Atuahene is hopeful that Ghana could derive significant benefits if the current appreciation of the cedi against major foreign currencies is maintained over the long term, highlighting the importance of currency stability for the broader economy, particularly in terms of economic planning and business confidence.

    “The currency appreciation, if it happens to be long-term, is one of the best things that could happen to us for a very long time. Because we have been in this situation for a very long time. But if we can continue to sustain the stability of the cedi, it will change our situation” he stated.

    Dr. Atuahene further noted that sustaining such stability hinges on maintaining key economic fundamentals.

    “There are cardinal things—stable exchange rate, lower inflation, lower fiscal deficit, if you get all these components in, then your currency will be as good as anything, and that is good for businesses, import planning,” he said.

  • Cedi rebounds from world’s worst to best performing currency

    “The cedi’s rebound is underpinned by booming gold and cocoa exports, IMF-backed reforms, and monetary tightening.”

    By Toma Imirhe

     In a remarkable turnaround, the Ghanaian cedi has emerged as the world’s best-performing currency in 2025 – according to data from Bloomberg – appreciating nearly 16% against the U.S. dollar since April and trading at GH₵13.20 as of early May 2025.

    This resurgence marks a stark contrast to its status as the worst-performing currency in 2022, when it lost over 55% of its value amid a debt crisis and inflationary spiral, with the exchange rate peaking at over GHc16 to US$1 subsequently. The cedi’s rebound has injected optimism into Ghana’s economy, easing inflation to 21.2% in April and revitalizing business confidence.

    To be sure, many economists and financial market analysts, not drawn into politically motivated pessimism, had expected that the cedi’s sharp depreciation since late 2022 – including 19% depreciation in 2024 alone – would be stemmed upon the assumption of office of a more fiscally restrained and measured President John Mahama administration, but even they have been surprised by the sheer intensity of the currency’s rebound.

    Several factors have driven the cedi’s dramatic rebound, one of them being the strategic interventions of the country’s central bank. The Bank of Ghana (BoG) has played a pivotal role through aggressive monetary tightening and forex market interventions. In March 2025, the BoG surprised markets with a 100 basis-point hike, raising the policy rate to 28% to curb inflation and attract foreign capital. By April, it injected US$490 million into the forex market, stabilizing liquidity and driving the interbank rate from GH₵15.36 to GH₵14.91 overnight. These measures, combined with a shift to spot-market forex auctions, have reassured businesses of dollar availability, reducing speculative dollar hoarding.

    Another pivotal factor has been the commodity revenue windfall arising out of the ongoing price surges in two of Ghana’s main traditional exports, gold and cocoa. Ghana’s status as the world’s sixth-largest gold producer has proven transformative. Surging gold prices—from US$2,000 per ounce in 2024 to US$3,400/ounce in May 2025— boosted export revenues to US$11.6 billion in 2024,up from US$7.6 billion in 2023. This trend is now accelerating further. Instructively, Ghana earned US$2.72 billion from gold exports alone during first four months of 2025 up from US$900 million during the corresponding period of 2024.

    Cocoa prices nearing US$10,000 per ton have further bolstered inflows, combining with gold, oil and non- traditional exports to take Ghana’s trade surplus to a long term high of US$4.3 billion in 2024 – despite continued cocoa production sluggishness and a backlog of unfulfilled supply contracts from the previous crop season that are now having to be met at barely a quarter of current market prices.

    Yet another factor has been the impacts of the ongoing three year International Monetary Fund programme, which includes a US$3 billion financial bail out and an insistence on a return to demand management economic management policies to restore macroeconomic stability after the near-chaos that reigned from late 2022 to late 2023. The current government’s austerity measures—halting GHc 65 billion in arrears payments and reducing treasury bill yields from 28% to 15%— have curbed debt pressures and attracted renewed investor confidence. Political stability post-2024 elections, marked by President Mahama’s decisive reforms, have further solidified market trust.

    There has been a key external factor too in that the dollar’s depreciation, driven by U.S. tariff wars and a falling Dollar Index (DXY) from 108 to 99 in 2025, have amplified the cedi’s relative strength. At the same time retaliatory tariffs from China and the EU have weakened global dollar demand, diverting capital flows to emerging markets like Ghana.

    Going forward, government and optimistic financial analysts are looking up to the Gold Board initiative, the spike in gross international reserves to US$9.4 billion by the start of May, rising cocoa production – most of which is now being sold at close to the relatively high spot market prices – and the falling cost of imported petroleum products, to cumulatively discourage speculative demand for forex and further strengthen the cedi’s exchange rate over the coming months.

    However, they acknowledge that potential pitfalls exist as the rebound remains fragile for now.

    While the cedi’s rally is commendable, its longevity hinges on addressing structural vulnerabilities

    One is Ghana’s commodity dependence amid global markets price volatility. Ghana’s reliance on gold and cocoa exports—accounting for 60% of forex earnings—leaves it exposed to price swings. A downturn in gold prices or cocoa yields (due to climate or disease) could reverse gains. The IMF warns that import dependency (especially on items such as, fuel and machinery) and a US$3.6 billion Eurobond repayment schedule between 2025 and 2028 could strain reserves


    There are also monetary policy potential pitfalls. Despite inflation easing, the BoG remains cautious about rate cuts. Economists note that utility price hikes and lingering inflation threats – with inflation still more than twice the upper end of the 6–10% target – may delay monetary easing. Overly aggressive rate cuts could reignite inflation or speculative attacks on the cedi..


    Then there are political and fiscal risks. Ghana’s public debt-to-GDP ratio, though improving, remains elevated at over 70%. The success of the Debt Sustainability Plan, to be unveiled in July 2025, is critical for maintaining investor confidence. Political strategy shifts or lax fiscal discipline could undermine reforms.

    Finally the threat of global headwinds remains a clear and present danger. The U.S. Federal Reserve’s interest rate trajectory and China’s economic slowdown pose risks.

     

     

     

  • Ghana to receive $360m from IMF

    International Monetary Fund

    By Elorm Desewu

    Ghana will in December receive a total of US$360 million from the International Monetary Fund (IMF) as the board is set to meet and approve the disbursement which is in line with Ghana passing the third review under the fund programme.

    This amount would support the country’s balance of payment as well as stem the speed depreciation of the Ghana Cedi.

    “Once the review is completed by the IMF’s executive board, Ghana would have access to about $360 million in terms of disbursement”, the Director of Communications at the IMF Julie Kozack disclosed at news conference in Washington DC USA.

    “We are working, our staff are working toward a board meeting in early December and will provide additional details on the precise date when we have them”, she added.

    Describing the programme performance as encouraging, Ms. Kozack said Ghana has followed the requirements needed for the country’s debt restructuring.

    “What I can say in addition is that the programme performance has been good. There has been in particular remarkable progress on debt restructuring”.

    She pointed out that some macroeconomic projections have been achieved under the programme, indicating some level of recovery.

    “Economic growth in the first half of 2024 exceeded our expectations, exceeded our projections. Inflation has declined and the fiscal and external positions have shown marked improvement”, she said.

    She cautioned against decisions that may cause slippages in the future.

    “Looking ahead, what will be important for Ghana will be continued implementation of the policy and reform agendas, especially given the difficult situation that many countries in the region and globally face. And it remains essential to fully restore macroeconomic stability and debt sustainability”.

    “We will, of course, have further updates on Ghana when we release the staff report, when we publish the staff report after the board meeting”, she added.

    On October 4th, the IMF staff and government reached a staff level agreement on economic policies and reforms for the third review of the ECF arrangement.

    The disbursement by the IMF Board in December 2024 will bring the total funds received since Ghana signed up for the IMF programme to $1.92 billion.

    The board meeting in December is coming after Ghana passed most of the benchmarks set under the third review by the IMF programme.

    The IMF staff at the end of the third review assessment indicated that all the end-June 2024 quantitative targets were met, and progress on key structural reforms has continued notwithstanding delays in a few areas

    “The economic growth in the first half of 2024 was much higher than initially envisaged primarily fueled by mining, construction, and information and communication activity, with a broadening of the sources of growth across sectors during the second quarter as inflation continued to decline” The IMF Staff said.

  • Cedi ranked 4th weakest in Sub-Saharan Africa – WB

    Cedi Depreciation

     

     

    Adnan Adams Mohammed

     

    After losing approximately 24 percent of its value against the US dollar, the Ghana Cedi is currently the fourth weakest or worst performing currency in Sub-Saharan Africa (SSA).

     

     

    This is according to the World Bank’s October 2024 Africa Pulse Report launched last week. Ghana is ahead of Nigeria, Ethiopia and South Sudan with worst performing currency in 2024.

     

    South Sudan’s pound recorded over 60% loss, Ethiopia’s birr (51%), and Nigeria’s naira (over 40%). In contrast, the Kenyan shilling has emerged as the best-performing currency in Africa, showing a year-to-date appreciation of about 21% as of August 2024.

     

    “Ethiopia, Ghana, and Nigeria are among the worst-performing in Africa this year, with their currencies continuing to weaken under mounting pressure for foreign exchange,” the report stated.

     

    It further explained that by the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound had experienced significant depreciation.

     

    The Nigerian naira, in particular, lost around 43% of its value due to the central bank’s heightened demand for US dollars in the parallel market, limited dollar inflows, and slow disbursement of foreign exchange to currency exchange bureaus.

     

    On the other hand, some currencies that weakened in 2023 have seen a recovery or stabilisation.

     

    The Kenyan shilling’s 21% appreciation stands out, while the South African rand and currencies pegged to it have strengthened by 3.1% this year, after significant losses in the previous year.

     

    Despite these improvements, the report warns that exchange rate pressures and foreign exchange shortages remain major concerns for African policymakers.

     

    More than a third of the 30 countries and two currency unions (the Economic and Monetary Community of Central Africa and WAEMU) surveyed are expected to have less than three months’ worth of import cover in international reserves by the end of 2024.

     

     

  • ‘Gold4Oil’ policy may be reintroduced as cedi weakens – BoG

    Gold bar and oil in a drum

    Adnan Adams Mohammed

    The Bank of Ghana has indicated that, the Gold for Oil (Gold4Oil) programme may be reintroduced, if the need be, to help strengthen the local currency.

    This comes at a time when the Ghana Cedi is  depreciating sharply against the U.S Dollar, Euro, and Pounds Sterling on the Forex Market. Beginning of January to April, as at last week, the cedi has experienced a continuous blip depreciation, resulting in a year-to-date depreciation of approximately 9.37%.

    Data from the Bank of Ghana indicates a consistent depreciation trend, with rates of 1.69%, 0.98%, and 1.77% for January, February, and March 2024, respectively, despite efforts such as fresh dollar inflows and forex auctions to Bulk Oil Distribution Companies (BDCs). Although, there is huge improvement in the depreciation trend on year-on-year basis compared to the 22.73% depreciation recorded as of April 2023. 

    However, the Central bank Governor, Dr Ernest Addison appearing at the Public Accounts Committee (PAC), last week, reiterated the pivotal role the Gold4OIL policy played amid the economic turmoil in 2022 and 2023 in managing the exchange rate and pump prices of fuel. Thereby, proposing that, the government could continue relying on the policy if oil prices surge at the pumps, opposing any potential discontinuation.

    “This is an intervention which was very critical in the heat of the crisis. Yes, the foreign exchange market is functioning better than it was in 2022. Oil prices have come down much better than they were in 2022″.

    “The situation is much better now than it was in 2022 when the Gold4Oil policy was introduced,” he acknowledged.

    “However, we think that it’s still an important programme for the government to have that option and to be able to empower commercial banks to undertake their activities”. 

    “Should market sentiments change, which do every day; we don’t know what will happen tomorrow, and we will wake up and if we find ourselves in a situation where the prices are driving the pumps to where they were again, the government has the option to fall on. It’s a very innovative instrument”.

    He also projected “a big jump in gold holdings for Ghana”.

    Meanwhile, in real terms, commercial banks are reporting an all-time high exchange rate of GHS 13.455 to a dollar, compared to GHS 11.55 during the same period last year. 

    While some analysts project a potential reversal of the cedi’s fall in the first half of the year, others fear its impact on inflation. 

    To stabilise the cedi, the Bank of Ghana plans to auction $120 million to BDCs in the second quarter of 2024, although persistent demand for dollars by businesses may pose challenges. 

    Concerns persist regarding currency volatility, despite maintaining the policy rate at 29% and lending rates averaging over 32%. However, Governor of the Bank of Ghana, Dr. Ernest Addison, expressed optimism at the last Monetary Policy Committee meeting, citing strong reserves from improved remittance inflows as a buffer for the local currency in the upcoming months.

  • Cedi stability short-lived 

    Cedi chasing the US Dollar
    Cedi and dollars

     

    Adnan Adams Mohammed

    Ghana’s fiat currency, the cedi has seen some time related stability on the forex market due to the inflows of the cocoa syndicated loan into the country.

    The Bank of Ghana (BoG) received the first tranche of US$541million of the US$800 million Cocoa Syndicated Loan last week.

    This has helped to stabilize the cedi which is now selling at GHC12.19 to the dollar. But any further delay in other expected inflows could change the narrative.

    The current US$541 million cocoa syndicated loan would also help to improve the balance of payment as well as the country’s reserves.

    According to the Bank of Ghana, the favourable external developments and tighter monetary policy stance have resulted in a relatively stable of the Ghana cedi in the year so far. Excluding the sharp depreciation of 20.6 percent in January, the Ghana cedi has cumulatively depreciated by 6.6 percent against the US dollar between February and November 20, 2023. 

    The relative stability in the foreign exchange market has largely been supported by inflows from the IMF ECF first tranche, the Ghana’s Domestic Gold Purchase Programme, as well as purchases of repatriated export proceeds from mining companies and oil and gas producers.

    At the end of October 2023, the stock of Gross International Reserves (GIR) was US$5,150.2 million, enough to cover 2.4 months of imports of goods and services. This compares with GIR of US$6,252.7 (2.7 months) at the end of December 2022. 

    The level of reserves excluding pledged assets and petroleum funds, as defined under the IMF-supported programme, increased to US$2.5 billion (equivalent to 1.1 months of import cover) at the end of October 2023, from the December 2022 position of US$1.5 billion (0.6 month of import cover). This indicates a build-up of about US$1.0 billion, mainly driven by the Gold for Reserves programme.

    The Bank of Ghana was expecting a total of US$1.650 billion by the end of this year which would help to improve the country’s balance of payment, support the stability of the cedi as well as the Gross International Reserves.