The recent appreciation of the Ghanaian cedi (GHS) against the US dollar and other major trading currencies has generated significant economic discourse. According to Bloomberg (May 2025), the cedi has surged by 16% since April 2025, making it the best-performing currency globally in the second quarter of the year. This recovery follows a period of severe depreciation, where the cedi lost 45.1% of its value in 2022, as reported by the Bank of Ghana (BoG) Annual Report (2023). The sudden reversal raises critical questions about its sustainability, underlying drivers, and long-term macroeconomic implications.
Mr. Forster K. O. Amoako, a Chartered Accountant and Chartered Tax Practitioner, said that analysis of the cedi’s appreciation requires examining monetary policy adjustments, fiscal consolidation measures, external trade dynamics, and structural vulnerabilities. The discussion is grounded in empirical data, economic theory, and policy frameworks to offer a balanced perspective for national economic discourse.
According to Mr. Forster Amoako, the Bank of Ghana (BoG) has played a pivotal role in stabilizing the cedi through aggressive monetary tightening. In March 2025, the Monetary Policy Committee (MPC) raised the policy rate by 100 basis points to 28%, marking the first hike in nearly two years (BoG Monetary Policy Report, March 2025). This decision was driven by persistent inflationary pressures, with April 2025 inflation at 21.2%, still far above the BoG’s target range of 6-10% (Ghana Statistical Service, May 2025).
He suggested that Ghana must implement structural and policy reforms, including:
1. Export Diversification & Industrialization: Expand value-added exports (processed cocoa, textiles, ICT services) to reduce reliance on raw materials. Leverage AfCFTA opportunities to penetrate African markets (AfCFTA Secretariat Report, 2025).
2. Strengthen Monetary-Fiscal Coordination: Establish a joint BoG-Ministry of Finance task force to align monetary policy with debt management. Maintain a cautious monetary stance until inflation stabilizes within the target band.
3. Enhance Forex Reserve Buffers: Expand the Goldbod program to include bauxite and manganese reserves. Secure additional IMF tranches and concessional financing to bolster reserves.
4. Public Financial Management Reforms: Enforce strict Treasury Single Account (TSA) compliance to curb off-budget spending. Accelerate digital tax collection to improve revenue efficiency (GRA Digitalization Report, 2025).
Conclusion: The cedi’s appreciation reflects effective short-term policy adjustments, including monetary policy. Policymakers must prioritize economic diversification, institutional resilience, and prudent macroeconomic management to ensure that the cedi’s strength translates into durable economic stability and inclusive growth.
Contact: Mr. Forster Amoako, 0247026753, 0200367581.
