Ghana’s recent currency gains could prove temporary unless urgent steps are taken to ramp up domestic production and pivot toward an export-led economy, the Institute of Economic Affairs (IEA) has warned.
In a pointed analysis delivered during a press briefing in Accra, IEA Fellow and political economist, Professor Vladimir Antwi-Danso, cautioned that the cedi’s recent rally could unravel by December if structural weaknesses persist.
“Our forex appreciating, and the cedi also appreciating is not the answer. You must do more. You must try and be an export economy. That is the only way you stabilize your economy. That is the only way you make the other currency lower,” he asserted.
He warned that current efforts to prop up the currency, though yielding visible results, are not a permanent fix. Without deeper investment in industrialization, value addition, and export competitiveness, the cedi could see renewed depreciation by year-end.
“What we are doing is that we are not stabilizing permanently. We will relapse. By December, I believe that we will relapse. And this is coming from a technical point of view and not political. What I am saying is that it is not yet hurray,” Prof. Antwi-Danso added, painting a sobering picture of what could lies ahead.
Central Bank Responds: Appreciation Is Fundamentals-Driven
In response to concerns about artificial currency support, the Governor of the Bank of Ghana, Dr. Johnson Asiamah, pushed back against suggestions that the central bank is intervening in the market to engineer the cedi’s rise.
“Our cedi has appreciated by 24.1% against the US dollar. Let me emphasise that the Central Bank is not using international reserves to prop up the cedi, nor are we engineering an unsustainable appreciation,” Dr. Asiamah declared during his remarks at the Ghana CEO Summit held in Accra on May 26.
According to the Governor, the currency’s performance is being driven by more than just surface-level gains; it is the result of deliberate, long-term reforms.
“These are not short-term interventions they are deliberate, structural changes aimed at ensuring long-term stability,” he said.
He cited improved remittance flows, disciplined monetary policy, foreign exchange market reforms, and tighter surveillance mechanisms as the true engines behind the cedi’s strength.
Structural Shift or Short-Term Bounce?
The contrasting perspectives from the IEA and the Central Bank underscore a broader debate now playing out within Ghana’s economic policy circles. Are the current currency gains sustainable or simply a high tide buoyed by temporary winds?
