The Governor of the Bank of Ghana, Dr. Johnson P. Asiama, has cautioned that despite the Cedi’s recent strength, sustaining foreign exchange stability will require confronting three major challenges: market volatility, behavioural distortions, and complex policy trade-offs.
Speaking at the Graphic Business/Stanbic Bank Breakfast Meeting in Accra on Monday, Dr. Asiama warned against complacency following the Cedi’s over 42% appreciation in 2025, noting that “sustaining forex gains is a far more complex task than achieving them.”
1. Volatility Risks Remain
The BoG Governor identified Ghana’s heavy reliance on a narrow band of commodity exports, gold, cocoa, and oil—as a critical vulnerability. He explained that while current gold prices above US$3,200/oz had boosted export earnings, those gains are precarious.
“These sectors are highly vulnerable to price fluctuations driven by factors beyond our control,” he said. A sudden correction in commodity prices could quickly shrink Ghana’s trade surplus.
Additionally, the Governor noted that Ghana’s import profile is “heavily skewed toward energy, capital goods, and essential commodities,” creating seasonal spikes in forex demand, particularly in the second half of the year.
2. Behavioural Risks: Dollar Pricing and Offshore Hoarding
The second challenge, according to Dr. Asiama, is behavioural. “We are still grappling with a deep-rooted culture of dollarization,” he said. Despite conducting business entirely in Ghana, many businesses continue to price goods and services in foreign currency, especially those in the real estate, education, and luxury retail sectors, undermining confidence in the Cedi and violating legal tender laws.
Equally troubling, he noted, is the limited reinvestment of forex earnings back into the domestic economy. “While export receipts have risen, a significant portion is either held offshore or not channelled back into productive activity at home,” he said, citing Ghana’s low formal savings rate and poor export value retention among SMEs.
3. Policy Dilemma: Balancing Strength with Growth
The third challenge, Dr. Asiama said, is a policy dilemma. While a strong Cedi helps curb inflation and improve Ghana’s terms of trade, it can also reduce the competitiveness of exports and slow industrial recovery.
“The Bank of Ghana must walk a delicate line, managing forex strength without over-tightening liquidity,” he said. Excessive tightening, he warned, could suppress private sector credit and stifle growth. “This balance is not static,” he stressed, “it requires constant recalibration based on evolving data and market behaviour.”
A Call to Action
Dr. Asiama further called for shared responsibility in protecting Ghana’s macroeconomic gains.
“Let us be reminded: macroeconomic stability is a public good. It benefits all and thus demands the participation of all, regulators, banks, exporters, importers, investors, the media, and the public.”
He urged businesses to reinvest forex earnings locally, abandon dollar pricing, and collaborate with the central bank to deepen the FX market and protect the Cedi.
