Ghana’s recent currency gains are not merely the result of sound domestic policy, but also owe much to favorable global dynamics, according to Joe Jackson, Financial Analyst and CEO of Dalex Finance.
Speaking on TV3’s Key Points on May 17, Jackson emphasized that external shocks, particularly the depreciation of the U.S. dollar and the sharp drop in global oil prices, have created a unique opportunity for Ghana’s economy and the local currency, the cedi.
“External factors have been good to Ghana and we have put ourselves in a position where we can take advantage of the external factors,” Jackson stated, urging policymakers and the public alike to acknowledge the role of global conditions in the cedi’s rise.
One of the primary global factors, he explained, is the U.S.-China trade tensions and broader economic uncertainties that have weakened the dollar against major world currencies. “The Trump tariff war has had three effects on us. One, the dollar has depreciated against all major trading currencies,” Jackson noted.
Another key driver has been the significant fall in global oil prices, which has brought relief to Ghana’s foreign exchange reserves by reducing the cost of fuel imports,a major pressure point for the cedi. “Because of that war and Trump wanting the price of crude oil to be low as $40 per barrel… the cost of that [fuel] has come down so there is less pressure on the cedi,” he said.
Beyond oil, global financial instability has prompted investors to seek safer assets, boosting demand for gold—one of Ghana’s top exports. “This same global instability has meant that investors have moved their dollars from other currencies into gold because they want somewhere safe,” Jackson explained. The resulting surge in gold exports has helped strengthen the cedi through increased foreign exchange inflows.
However, Jackson was careful to credit both global and domestic factors for the currency’s performance. While external trends have created a favorable environment, Ghana’s fiscal discipline and reforms have allowed the country to benefit. “Have the external factors aligned? Yes. Have we also done the right thing? Yes,” he remarked.
He also noted that Ghana’s experience stands out even in the sub-region, where other countries have failed to see similar gains. “Look across West Africa… the CFA has appreciated against the dollar but nowhere near what has happened to the cedi. Close in Nigeria… the Naira is still depreciating against the dollar,” Jackson pointed out, suggesting that Ghana’s proactive stance helped it maximize the global tailwinds.
