The Bank of Ghana’s aggressive defence of the cedi is coming at a heavy price, according to University of Ghana economist Prof. Godfred Bokpin, who says the central bank’s obsession with exchange rate stability is hurting the real economy.
Speaking to The High Street Journal, Prof. Bokpin said policymakers appear fixated on keeping the cedi artificially strong, even when such actions squeeze liquidity, starve businesses of credit, and stall growth.
He described this as a misguided national obsession, warning that the pursuit of a low exchange rate has blinded economic managers to the deeper challenge of job creation, productivity, and sustainable growth.
“Our policymakers seem too obsessed with the exchange rate, bringing it low at any cost, forgetting that what matters most is stability,” he said. “Businesses and people in the diaspora are not looking for a cedi that suddenly jumps up and down; they want predictability and confidence.”
Prof. Bokpin argued that the current approach is hurting livelihoods, as tight monetary policy and fiscal adjustments meant to stabilise the cedi have left little room for private sector expansion. He noted that there is no money for businesses or households to spend, and liquidity conditions across the economy are worsening.
While acknowledging that the Bank of Ghana’s interventions have helped to hold the currency firm, he said they have come at the expense of credit availability and growth. Billions of cedis used to sustain the exchange rate, he added, could have otherwise funded productive investment, business expansion, and job creation.
He cautioned that Ghana’s leaders have turned exchange rate management into a political trophy, chasing short-term applause while eroding the country’s productive base.
“A strong cedi that kills businesses and jobs is no success,” he stressed. “Real stability is what gives people confidence, not an exchange rate that looks good for a few weeks.”
Prof. Bokpin urged the central bank and government to shift focus from cosmetic currency gains to real economic progress, anchored on employment, production, and value creation.
