News Guide Africa

Tag: U.S dollar

  • BoG 2025 Annual Report: Historic turnaround yields 40.7% Cedi surge amid record single-digit inflation

    BoG 2025 Annual Report: Historic turnaround yields 40.7% Cedi surge amid record single-digit inflation

    By Adnan Adams Mohammed

     

    The Bank of Ghana’s newly published 2025 Annual Report and Financial Statements has unveiled a historic triumph of monetary craftsmanship, positioning the nation as a beacon of aggressive structural recovery.

    The report detailed a watershed year of aggressive macroeconomic stabilization, robust gross domestic product (GDP) growth, and a dramatic strengthening of external buffers.

    The spectacular economic turnaround achieved through an expertly engineered stabilization strategy, the central bank successfully crushed headline inflation from a staggering 23.8% in 2024 down to a phenomenal single-digit low of 5.4% by December 2025, comfortably outperforming the central bank’s medium-term target band of 8+-2%.

    Parallel to this achievement, the Ghanaian cedi mounted a brilliant, historic 40.7% appreciation against the US dollar, entirely erasing the previous year’s losses.

    Even as intense open market interventions to secure this stability resulted in a deliberate, counterpart operating loss of GH¢15.63 billion on its balance sheet, the Bank of Ghana has masterfully restored investor confidence and laid down an ironclad foundation for sustained national prosperity.

     

    The Year in Numbers: Key Macroeconomic Indicators

    The newly published figures paint a comprehensive picture of structural recovery across the domestic landscape:

    ● Real GDP Growth: Expanded by 6.0% (with non-oil GDP accelerating at an impressive 7.6%), driven heavily by the agriculture and services sectors.

    ● Headline Inflation: Closed the year at 5.4%, marking its lowest level since 2018.

    ● Monetary Policy Rate: Slid along an easing trajectory to end the year at 18%, down from an initial height of 28%.

    ● Current Account Surplus: Reached a historic high of US$9.39 billion, fueled by a massive doubling of gold export receipts.

    ● Gross International Reserves: Advanced to US$13.83 billion, providing a comfortable 5.7 months of import cover.

    ● Currency Performance: The Ghana cedi appreciated by a historic 40.7% against the US dollar, fully reversing the 19.2% depreciation logged in 2024.

     

    Stabilization Achieved “At Great Cost”

    Despite the stellar macroeconomic achievements, the sheer intensity of open market liquidity sterilization and reserve accumulation operations placed a significant burden on the central bank’s own balance sheet.

    The Bank of Ghana recorded an Operating Loss of GH¢15.63 billion for the 2025 financial year, alongside a cumulative negative equity position of GH¢93.82 billion.

    Central bank officials emphasize that these financial developments do not impair the bank’s operational capacity. A phased recapitalization memorandum of understanding (MoU) has already been executed with the Ministry of Finance to progressively restore the bank’s equity over the medium term.

    Official Statements from Leadership

    In his official foreword to the report, Dr. Johnson Pandit Asiama, Governor of the Bank of Ghana, strongly defended the strategic execution of the bank’s mandate:

    “The experience of 2025 demonstrates that restoring and preserving stability requires commitment, discipline, and at times difficult choices, but the benefits are far-reaching”.

    Addressing the operating losses stemming from intense open market interventions to absorb excess liquidity, Governor Asiama remarked:

    “While these operations and developments negatively affected the Bank’s financial position, they were the financial counterpart of the stabilisation gains achieved during the year. Lower inflation, reduced borrowing costs, exchange rate stability, and improved investor confidence are now visible across the economy”.

    Looking ahead to the upcoming fiscal cycles, the Governor reaffirmed that the primary objective will remain entirely uncompromised:

    “Price stability remains the foundation upon which sustainable economic growth, investment, employment creation, and financial stability depend. As we look ahead, our focus will be on consolidating and safeguarding the gains in stability”.

    Banking Sector and Future Reforms

    The report notes that the broader banking sector remains highly resilient, boasting a capital adequacy ratio (CAR) of 17.5%, well clear of the 13.0% regulatory minimum.

    To prepare the financial ecosystem for long-term development, the central bank also successfully advanced critical institutional structural reforms in 2025. These included the formalization of the 2025–2029 National Payment Systems Strategy to accelerate digital finance infrastructure, as well as the landmark passage of the Virtual Asset Service Providers Act, 2025 (Act 1154), introducing a robust legal blueprint for cryptocurrency and digital asset frameworks inside the country.

     

  • Mahama talks tough; demands end to dollar dominance in African trade

    Mahama talks tough; demands end to dollar dominance in African trade

    By Adnan Adams Mohammed

    President John Dramani Mahama has issued a stirring call to action for African leaders, demanding the immediate dismantling of structural financial barriers that force African nations to rely on third-party currencies like the U.S. Dollar for intra-continental trade.

    Speaking on Sunday, February 15, at the “Accra Reset’s Addis Reckoning” forum held on the sidelines of the 39th African Union (AU) Assembly the President argued that meaningful economic integration remains a pipe dream as long as a business in Accra must convert Cedis into Dollars just to pay a supplier in Nairobi.

    The Currency Barrier

    President Mahama threw his full weight behind the Pan-African Payment and Settlement System (PAPSS), describing it as an initiative “whose time has come.”

    He echoed concerns frequently raised by the Secretary-General of the African Continental Free Trade Area (AfCFTA), Wamkele Mene, regarding the “currency conversion tax” that drains African businesses.

    “I should be able to ship my goods to Kenya and get paid in Cedis rather than a foreign currency,” the President stated. “The Pan-African payment and settlement system is a thing whose time has come and with urgency.”

    Logistics Catching Up to Policy

    While critical of financial delays, the President was optimistic about the continent’s physical integration. He pointed to the “Accra Reset” agenda as a blueprint for removing dependencies and praised the private sector for leading the charge in logistics:

    ● Aviation: He lauded ASKY Airlines for its West African connectivity and Ethiopian Airlines for its expansive continental network.

    ● Maritime: He highlighted new reefer vessels redistributing cargo between Dakar and Douala, alongside a proposed ferry system intended to link Accra, Lagos, and Monrovia.

    “Once supply and demand are in place, the logistics will follow,” he observed, noting that the infrastructure for a unified market is finally beginning to mirror the continent’s political ambitions.

    The “Addis Reckoning”

    The President’s tone shifted to one of blunt urgency when addressing the pace of bureaucratic reform. He warned that Africa often acts as if “time is waiting for us,” leading to a gap between high-level policy frameworks and ground-level reality.

    “This is the Addis reckoning,” Mahama declared to the gathered delegates. “From Addis, we must stop talking and start implementing.”

    The President concluded by reminding international participants that a prosperous, integrated Africa is not just a continental win but a “shared global benefit,” strengthening the world’s economic stability as a whole.

     

     

  • Bank of Ghana targets end to dollarisation challenge in Ghana

    Bank of Ghana targets end to dollarisation challenge in Ghana

    Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has renewed calls for stronger efforts to promote the exclusive use of the Ghana cedi in domestic transactions, describing dollarisation as one of the country’s most persistent economic challenges.

    Speaking at the IMF/World Bank Governor Talk Series in Washington, D.C., Dr. Asiama expressed concern over the continued use of foreign currencies particularly the US dollar in local trade, noting that it undermines the effectiveness of monetary policy.

    “A couple of things bother me. First of all is the issue of dollarisation. I have seen this for many years. I started central banking 30 years ago. The phenomenon has been there. So, we are tackling it,” he said.

    He added that ensuring the cedi becomes the sole legal tender in Ghana’s economy is a key priority for his administration at the central bank.

    “What can we do to make the local currency the sole legal tender? So on the 28th of this month, we are having a celebration. We call it the Cedi at 60. The local currency will be 60 years this year, and we want that to mark a new beginning,” Dr. Asiama announced.

    The BoG Governor said the upcoming anniversary celebration would serve as both a symbolic and practical step toward reinforcing confidence in the cedi and promoting its wider use across all sectors of the economy.

    “When we use the local currency in all transactions, this enhances the efficiency of monetary policy. It is at the core of most of our problems. It is one of the things I would want to be remembered for—that I came, I solved that problem, and I made the local currency the currency of choice,” he said.

    The Cedi at 60 celebration, scheduled for October 28, is expected to highlight the evolution of Ghana’s national currency and renew public commitment to its use as the sole medium of exchange within the country.

     

     

     

     

     

     

     

     

     

     

  • Gold price could hit US$5,000

    Gold price could hit US$5,000

    Spot gold prices hit a record high of US$3,578.50 per ounce last week on expectations of a U.S. Federal Reserve interest rate cut later this month, while lingering global uncertainties kept safe-haven demand firmly in play, according to Reuters.

    Goldman Sachs predicts that gold prices could surge well above its US$4,000 per troy ounce baseline by mid-2026, should private investors diversify more heavily into the metal.

    “Gold remains our highest-conviction long recommendation,” Goldman Sachs said in a note last week, while forecasting gold prices at US$3,700 by the end of 2025 assuming strong central bank buying.

    However, this baseline view does not factor in a major shift by private investors out of U.S. dollar assets into gold, a scenario that could push prices to as high as US$4,500 per ounce.

    It also said that a loss of Fed independence could trigger higher inflation, a rise in long-end bond yields, weaker equities, and a decline in the dollar’s reserve currency status while gold, as a store of value not reliant on institutional trust – stood to benefit.

    U.S. President Donald Trump has intensified efforts to exert control over the Fed, whose ability to manage inflation effectively is widely seen as requiring freedom from political influence over interest rate decisions.

    Goldman Sachs also estimated that, assuming all else remains constant, gold prices could approach US$5,000 per troy ounce if 1% of the private money invested in the U.S. Treasury market was reallocated to gold.

    The precious metal is viewed as a safer asset for investors during times of economic uncertainty, and its price rose earlier this year after US President Donald Trump announced wide ranging tariffs which have upset global trade.

    Analysts say the price has also been lifted by expectations that the US central bank will cut its key interest rate, making gold an even more attractive prospect for investors.

    Adrian Ash, director of research at BullionVault, told the BBC’s Today programme that the rise in gold prices over the past few months is really down to Trump and “what he’s done to geopolitics [and] what he’s done to global trade”.

    “It was really the US election last year that really put a fire under it,” he said.

    Analysts also cite worries over the independence of the US central bank, the Federal Reserve, as another factor driving the gold price.

    Trump has launched repeated attacks on the Federal Reserve’s chair, Jerome Powell, and recently attempted to fire one of its governors, Lisa Cook.

    Derren Nathan from Hargreaves Lansdown said it was Trump’s “attempts to undermine the independence of the Federal Reserve Bank” that was “driving renewed interest in safe haven assets including gold”.

    On Monday, the head of the European Central Bank Christine Lagarde warned that if Trump were to undermine the independence of the Fed, it would represent a “very serious danger” to the global economy.

    She said if the Fed was forced to respond to Trump’s politics, it would have a “very worrying” impact on economic stability in the US, and therefore in the rest of the world as well.

    Mr Ash added that when the price of gold surges because of investor interest, it was usually tempered by a slowdown in buying from China and India two of the biggest markets for gold jewelry.

    But this time, he said gold was continuing to find demand in China and India as, rather than exiting the market during times of high prices, jewelry buyers turn towards buying investment gold products such as bars or coins.

    Gold’s general price increase also comes from a “raft” of other reasons, including Russia’s invasion of Ukraine which has added to a climate of general political uncertainty, said precious metals analyst Suki Cooper from Standard Chartered.

    She adds that this year, the impact of changing trade policies on inflation and supply chains has also fueled the gold price.

    “Gold has found added support from US dollar weakness earlier in the year as the preferred safe haven,” she concluded.

     

  • Dollar to hit below GHC9.0 soon as Ghana-IMF reaches Agreement for $3bn ECF 

    Dollar to hit below GHC9.0 soon as Ghana-IMF reaches Agreement for $3bn ECF 

    Adnan Adams Mohammed

    Adnan Adams Mohammed

    Ghana’s local currency, the cedi which for past weeks was ranked the worst performing currency globally, is expected to regain strength against international trading currencies especially with the U.S dollar.

    The forecast comes as the government and the International Monetary Fund reached a Staff-Level Agreement on economic policies and reforms to be supported by a new three-year arrangement under the Extended Credit Facility (ECF) of about US$3 billion.

    The Fund believes, the government’s strong reform programme aimed at restoring macroeconomic stability and debt sustainability while protecting the vulnerable, preserving financial stability and laying the foundation for strong and inclusive recovery, was key in this decision.

    This is expected to boost investor confidence in the economy as well as shore up the foreign reserves. Also, almost all importers who needed the US dollar for their Christmas and New year imports have already closed their transaction, so there will be no much pressure and rush for the US dollar now.

    According to the Bank of Ghana currency trading dashboard, as at Friday, December 16, 2022, the dollar was selling at “GH¢8..0055 and buying at ¢7.9975.”

    Some weeks ago, the US dollar was trading around GH¢15. From beginning of the year, the cedi fell by more than 54% against the dollar.

    However, the staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances by Ghana’s partners and creditors.

    To support the objective of restoring public debt sustainability, the statement added that, the government has launched a comprehensive debt operation. But the Fund said sufficient assurances and progress on this front will be needed before the proposed Fund-supported programme can be presented to the IMF Executive Board for approval.

    “The Ghanaian authorities have committed to a wide-ranging economic reform program, which builds on the government’s Post-COVID-19 Programme for Economic Growth (PC-PEG) and tackles the deep challenges facing the country”, the statement pointed out.

    “Key reforms aim to ensure the sustainability of public finances while protecting the vulnerable. The fiscal strategy relies on frontloaded measures to increase domestic resource mobilisation and streamline expenditure. In addition, the authorities have committed to strengthening social safety nets, including reinforcing the existing targeted cash-transfer program for vulnerable households and improving the coverage and efficiency of social spending”, it explained.

    The statement further said that structural reforms will be introduced to underpin the fiscal strategy and ensure a durable consolidation. These include developing a medium-term plan to generate additional revenue and advancing reforms to bolster tax compliance.

    It noted that the structural reforms will help create space for growth-enhancing measures and social spending. Efforts will also be made to strengthen public expenditure commitment controls, improve fiscal transparency (including the reporting and monitoring of arrears), improve the management of public enterprises, and tackle structural challenges in the energy and cocoa sectors, adding, “the authorities are also committed to further bolstering governance and accountability”.

    Continuing, the Fund said “reducing inflation, enhancing resilience to external shocks, and improving market confidence are also important program priorities. Accordingly, the Bank of Ghana will continue to strengthen its monetary policy framework and promote exchange rate flexibility to rebuild external buffers. As part of the authorities’ debt strategy, a domestic debt exchange has been launched. The authorities are committed to taking the necessary mitigation measures to ensure financial sector stability is preserved”.

    The IMF staff held meetings with Vice President Dr. Bawumia; Finance Minister, Ken Ofori-Atta and Bank of Ghana Governor, Dr. Ernest Addison, and their teams, as well as representatives from various government agencies.

    The mission team concluded by expressing gratitude to the government, Parliament’s Finance Committee, the private sector, trade union, and civil society representatives for their open and constructive engagement over the past few months.

  • BoG Dollar Sales: supply fall short of about 80%

    BoG Dollar Sales: supply fall short of about 80%

    Adnan Adams Mohammed

    The Bank of Ghana (BoG) U.S dollar auctioning report indicates that, there is supply shortage of about US$82 million out of total demand of US$107 million as at last week, July 26, 2022.  

    Sales of the US dollar stood at US$25 million. This translate into a percentage shortfall in supply of about 80 percent.

    This indicates why the cedi has come under severe pressure in recent days, losing ground against the largest trading currency. The demand for the U.S currency has been very high.

    US$51.25 million of the 7-day tenor was the highest bid by the dealers, followed by US$28.75 million for the 15-day tenor.

    The 30-day tenor received bids worth US$19.75 million, whilst the 45-day tenor received bids of US$4 million.

    The rates for the 7-day tenor were priced within the range of ¢8.09 and ¢8.20. That of the 15-day were within the range of ¢8.14 and ¢8.25.

    Overall, 150 bids were submitted by the dealers, but 34 of the bids were accepted.

  • Gov’t strives to tame Cedi fall as it tops Africa worst currency table

    Gov’t strives to tame Cedi fall as it tops Africa worst currency table

    Adnan Adams Mohammed

    In spite of government’s recourse to address the loose-break of the local currency exchange rate with the international trading currencies, especially the U.S Dollar, the Cedi ranks the worst currency in Africa.

    According to a Bloomberg report, the Ghana Cedi depreciated by 18.21 percent against the U.S dollar in the first quarter of 2022.  This places the Cedi as the worst-performing currency in Africa while the Angolan Kwanza is the best-performing currency in Africa as it currency appreciated by 24 percent against the dollar.

     According to the Foreign Exchange Forward Auction, a total of US$350 million would be auctioned to authorised dealers by the central bank in the second quarter. Per the auction calendar, the bank will sell $100 million in April, $150 million in May and another $100 million in June.

    “In accordance with the Foreign Exchange Forward Auction Guidelines, bids are invited as per the prescribed format to purchase United States dollars against Ghana cedis, separately on each auction date”, Bank of Ghana has said in a statement that announced the information of all Authorised Foreign Exchange Dealing Banks and the Auction Calendar for Foreign Exchange Auctions for the second quarter of 2022.

    Also, the Central bank has cautioned the business community and persons pricing goods and services in foreign currencies to desist from such practices or have themselves to blame as it breaches the Foreign Exchange Act, 2006 (Act 723), which prohibits companies and institutions from pricing, advertising, receipting, or making payments in foreign currencies in Ghana.

    The central bank in a statement also said the law prohibits individuals or institutions from engaging in foreign exchange business without a licence issued by the Bank of Ghana.

    “Such violations are punishable on summary conviction by a fine of up to seven hundred (700) penalty units or a term of imprisonment of not more than eighteen months(18) or both,” the Bank of Ghana cautioned.

    The bank also cautioned the public to desist from “black market” transactions.

    The central bank further reiterated in the statement signed by its Secretary, Sandra Thompson, that the only legal tender for transactions in the country is the Ghana Cedi.

    “The Public is hereby notified that the sole legal tender in Ghana is the Ghana Cedi. The Bank of Ghana, in collaboration with the National Security and Law Enforcement Agencies, will clamp down on illegal foreign exchange operations. All offenders shall be dealt with in accordance with the law.’

    Below is the currency performance table:

    CURRENCIES WITH “WORST SPOT RETURNS” AT THE END OF QUARTER 1, 2022

    RANKING   CURRENCY YEAR-TO-DATE

    16th  New Sudanese pound   -2.08%

    17th  Ethiopian Birr      -3.89%

    18th  Liberian dollar     -4.94%

    19th  Sierra Leone leone      -5.10%

    20th  Mauritian rupee   -7.05%

    21st  Zambian kwacha -8.02%

    22nd Egypt pound       -14.27%

    23rd  Ghana cedi -18.21%

    CURRENCIES WITH “BEST SPOT RETURNS” AT THE END OF QUARTER 1, 2022

    RANKING   CURRENCY YEAR-TO-DATE

    1st    Angolan kwanza  24.2%

    2nd   South African rand       9.38%

     3rd   Guinean franc     4.40%

    4th    Botswana pula      2.59%     

    5th    Nigerian naira     1.74%

    6th    Kenya shilling      1.59%

    7th    Rwanda franc     0.66%

    8th Mozambique new metica l0.19%

  • Businesses proffer solutions to escalating dollar rate

    Businesses proffer solutions to escalating dollar rate

    Adnan Adams Mohammed

    Ghanaian businesses are ‘up in arms’ against the uncontrollable escalating depreciation of the local currency, the Cedi against the major trading currencies, especially the U.S dollar.

    Currently, the Cedi is trading GHC7.15 to one U.S dollar on the forex market. This is up from about GHS 5.58 in the first quarter of 2021. The Cedi is ranked as the worst performing currency among 15 major currencies in Africa as the Cedi has depreciated 7.6 percent this year.

    To this, the Ghana Union of Traders (GUTA) has called on regulators of the forex market to fast-track the proposal of making the Chinese Yuan as the only trading currency when doing business with China. They believe such a move will reduce pressure on the Cedi because imports will not be done with US dollars as most Ghana’s import currently come from China because of their cheaper products and cost.

    “We can also do a similar clearing system with China where we send our local currency to the local banks, and they have a clearing system with the Chinese banks where they clear with the local currencies”, President of GUTA, Dr. Joseph Obeng, reacting to the current development explained the point that, Ghana could explore a clearing system with China similar to the Pan-African Payment and Settlement System.

    “I think this is the way forward, and central banks in Africa have started thinking in that manner. I think they have to fast track those initiatives that will lessen the pressure on the US dollar,” Dr. Obeng said.

    Apparently, the Association of Ghana Industries’s (AGI) President, Dr. Humphrey Ayim-Darke, thinks otherwise. He believes moves to reduce the import of finished goods will be in the best interest of the Cedi.

    He blamed traders importing finished goods for contributing to the struggles of the cedi.

    “They put pressure on the exchange rate because they demand it for finished products.”

    Mr. Ayim-Darke was responding to a member of the Traders Advocacy Group, Irene Odoom, who had said Ghanaian industries contributed to the struggle of the cedi because they imported raw materials.

    “Most of them don’t have the raw materials here in Ghana to do it,” Mrs. Odoom said on the show.

    “The machines you use, some are obsolete and for the end product, the prices are high,” she added.

    But Mr. Ayim-Darke retorted that the imports of industries still resulted in a net benefit to Ghana.

    “By virtue of their [traders] deeds, bringing only finished products, if you look at the value chain of value addition, it is limited.”

    “They don’t create enough jobs and the turnaround of their funds in the value chain is short. When you bring in raw materials, the value chain is longer,” he added.

    Mr. Ayim-Darke noted further that this “affects the exchange rate in terms of the deficit the BoG [Bank of Ghana] needs to shore up the currency.”

  • Banks happy…as the cedi falls

    Banks happy…as the cedi falls

    By Elorm Desewu

    Some commercial banks in the country are happy in the wake of the speed depreciation of the country’s fait currency, the cedi, as it increases their net foreign assets in cedi terms.

    Like virtually everyone else, the banks publicly clamour for exchange rate stability but in reality they prefer at least some degree of cedi depreciation because it increases the value of their net foreign assets in cedi terms. 

    This by itself, increases a bank’s balance sheet size; but sometimes they go a step further and realize the profits derivable from the change in value by selling those foreign assets and thus earning foreign exchange translation gains.

    The Ghana cedi has depreciated by 4.70% to the US dollar within 45 days of 2022. It is the second worst performing currency in Africa, among 15 top performing currencies.

    It is presently trading at GHC7.15 to one US dollar on the forex market.

    The conditions that triggered the persistent depreciation of the cedi during the latter part of last year is expected to  persist till the end of the first half of 2022, Databank Research has projected.

    The local currency, it said, remains vulnerable to foreign portfolio outflows amidst the elevated import demand.

    The heightened uncertainty around Ghana’s fiscal outlook worsened the local currency’s woes in the latter part of 2021.

    “We expect these conditions to persist in first-half of 2022 in addition to corporate import demand as Ghana’s economy rebounds”, it said.

    According to the Monetary Policy Committee, (MPC), Ghana’s Gross International Reserves as at December 2021 stood at US$9.7 billion equivalent to 4.4 months of import cover. This compares with a reserve position of US$8.6 billion (4.0 months of import cover) at the end of 2020. 

    The Gross Reserves have since increased to US$9.9 billion as at 28th January 2022. The strong reserve position provided some buffers for the local currency in 2021. Cumulatively, while the Ghana Cedi depreciated by 4.1 percent and 3.1 percent against the US Dollar and Pound Sterling, respectively in 2021, the Ghana Cedi 5 appreciated by 3.5 percent against the Euro. In the same period of 2020, the Ghana Cedi recorded depreciations of 3.9 percent, 7.1 percent, and 12.1 percent against the US Dollar, the Pound Sterling, and the Euro, respectively.