Ghana’s persistent exchange rate instability is largely driven by structural leakages in the extractive sector rather than weak export performance, Mr Joe Jackson, Chief Executive Officer of Dalex Finance, has said.
He noted that the continued misdiagnosis of the causes of currency volatility had resulted in policy responses that failed to address the real issues affecting the cedi.
Speaking at the 2026 Dean of Business School Lecture Series at the University of Professional Studies, Accra, Mr Jackson highlighted the sharp fluctuations in the local currency, stating that the cedi depreciated by nearly 71 percent between 2016 and 2024, before rebounding by about 40 percent between 2024 and 2025.
He described the trend as a sign of “dangerous volatility,” reflecting deep-seated structural weaknesses within the economy.
Mr Jackson challenged the widely held view that Ghana’s currency weakness stemmed from poor export performance, pointing out that the country had recorded trade surpluses in recent years.
According to him, the real issue lies in the country’s inability to retain the foreign exchange it earns.
“Ghana generates significant forex inflows, but much of it leaves the economy through various channels,” he explained.
He cited service imports, profit repatriation, external debt servicing and capital flight as major sources of outflows.
In 2024 alone, although Ghana recorded a trade surplus of about US$5.1 billion, nearly US$8 billion was lost through such leakages.
Mr Jackson said the gold sector exemplified the problem, noting that out of approximately US$11.9 billion earned from gold exports, less than half was retained within the domestic economy.
He contrasted Ghana’s situation with countries such as South Africa and Botswana, which retain a higher share of value from their natural resources through stronger local participation and value addition.
Mr Jackson welcomed the establishment of the Ghana Gold Board, describing it as a positive step towards improving value retention in the gold sector.
He said the initiative had helped centralise gold purchases, align local pricing with international markets and formalise artisanal mining activities.
Early indications, he added, suggested the potential for a 75 percent increase in export value and more than a two-fold rise in contributions from artisanal mining.
However, he cautioned that the intervention addressed only part of the broader challenge, as major leakages, particularly service imports, profit repatriation and debt servicing remained largely unresolved.
Mr Jackson also raised concerns about high domestic inflation, which he said continued to weaken the cedi.
He noted that inflation, which peaked at about 54 percent in 2022, remained relatively high compared to Ghana’s major trading partners through 2024.
He explained that sustained inflation eroded purchasing power, increased demand for imports, pushed up interest rates and discouraged long-term holding of the local currency.
Mr Jackson stressed that achieving exchange rate stability would require both external and internal policy discipline.
On the external front, he called for deliberate strategies to retain more value from the extractive sector through enhanced local participation, stronger domestic supply chains and increased value addition.
Domestically, he emphasised the need for fiscal discipline and prudent monetary policies to reduce inflationary pressures.
He urged policymakers to shift focus from merely boosting exports to ensuring that a greater share of foreign exchange earnings is retained within the economy, describing currency volatility as a reflection of weak economic discipline.
