Director of Research at the Bank of Ghana (BoG), Dr. Philip Abradu-Otoo, has called for urgent structural reforms to strengthen the resilience of the Ghanaian cedi and ease the impact of exchange rate volatility on households and businesses.
Speaking at the launch of the University of Cape Coast’s (UCC) School for Development Studies Alumni Association, which also featured a roundtable on “Monetary Policy Responses to Exchange Rate Volatility in Ghana: Implications for Cost of Living”, Dr. Abradu-Otoo said excessive fluctuations in the cedi undermine inflation control, distort pricing behaviour, and raise the overall cost of living.
He emphasised that Ghana’s heavy reliance on imports remains a key driver of exchange rate pressures, warning that depreciation often forces businesses to pass additional costs onto consumers.
“The central bank is mandated to stabilise inflation, not necessarily the exchange rate. However, excessive volatility, whether appreciation or depreciation, creates uncertainty that affects investment, competitiveness, and cost of living,” he said.
Dr. Abradu-Otoo urged bold measures to boost the real economy, expand exports, and build stronger foreign reserves, stressing that long-term stability would require coordinated action across government, business, and academia.
Echoing these concerns, Prof. Samuel Kwaku Agyei, Dean of the UCC School of Business, said exchange rate instability consistently fuels inflationary pressures, particularly on essential goods such as food, transport, and utilities.
“In Ghana, even a tomato seller attributes price hikes to the dollar. This shows how deeply exchange rate volatility trickles down to households,” Prof. Agyei remarked.
He further observed that despite the recent appreciation of the cedi, many businesses and traders had not reduced their prices, leaving consumers unable to feel the real benefits in their daily expenses.
“Market players must complement government efforts by ensuring that price reductions are reflected in the pockets of households,” he added.
Dr. Abradu-Otoo added by stressing that, building a resilient currency required coordinated efforts across government, businesses, and academia.
He maintained that with the right structural reforms, particularly in boosting production and exports, Ghana could reduce its vulnerability to exchange rate shocks and create a more stable economic environment for its citizens.
