In a dramatic turn of events, the Ghana cedi is today one of the best-performing currencies in the world. So far, it has appreciated by approximately 16% against the United States dollar. This extraordinary increase in value is occurring alongside a decline in Ghana’s inflation rate, which fell to 21.2% in April 2025.
Global Implications
The recent strengthening of the Ghana cedi is an unusual case study in international finance. A strong currency in a growing African economy can influence international trade dynamics. It can, in theory, make Ghana’s exports more competitive in some markets and alter the cost of imports. For foreign investors, a stable and/or growing currency may signal a more attractive environment in which to invest. This could lead to greater foreign direct investment in Ghana.
However, this situation presents opportunities as much as challenges to world markets, and it requires careful examination of the forces propelling this trend and its potential long-term implications.
Experts at major banks, including Goldman Sachs and JP Morgan, have noted that while the performance of the cedi is impressive, they are tracking fiscal policy in Ghana as well as the amount of external debt to determine if this stabilization can be maintained in the long term. These institutions, and especially the World Bank and the International Monetary Fund (IMF), have a hawkish interest in the so-called emerging market economies—of which Ghana is one—to evaluate their exposure or vulnerability to financial crises.
African Perspectives
On the African continent, the performance of the cedi is closely followed. A strong currency may have contradictory implications for regional economies. For the broader African narrative, a strengthening cedi would be symbolic of the potential for economic transformation and effective management of policy on the continent. It offers a contrasting account to the generally dominant tales of currency devaluation and economic instability.
In fact, the African Development Bank (AfDB) has applauded Ghana’s progress, with a recent report noting that “Ghana’s macroeconomic stabilization efforts, including fiscal consolidation and monetary policy tightening, are yielding positive results, contributing to the cedi’s appreciation and moderating inflation.” The AfDB warns that drastic structural reforms are essential in an attempt to diversify Ghana’s economy and make it less susceptible to external shocks.
The AfDB further observes that increased regional integration and trade liberalization under the African Continental Free Trade Area (AfCFTA) could further boost the positive impact of a stronger cedi on Ghana’s trade balance and economic growth.
United States Angle
For the United States, the rising cedi has comparatively less direct impact—though still significant. A stronger cedi makes U.S. imports into Ghana more costly and reduces the value of Ghanaian exports to the United States, potentially affecting the trade balance between the two countries. Given the relative scale of the two economies, however, the immediate macroeconomic impact on the United States would probably be modest. The positive development is more important as a signal of global currency flows and an indicator of the factors driving them.
According to the United States Department of Commerce, trade between the U.S. and Ghana is a small part of overall U.S. trade, though it has been increasing in recent years. The U.S.’s leading exports to Ghana include machinery, vehicles, and agricultural products. A more robust cedi could hardly do anything other than deepen the uncompetitiveness of these vital exports. U.S. businesses with large investments in Ghana are likely to see benefits as their Ghanaian consumers see their purchasing power grow with the stronger cedi. The effect on key U.S. industries—such as agriculture and manufacturing—calls for further review.
Ghana’s Domestic Scene
In Ghana, this is a significant economic and political occurrence, as the strengthening of the cedi has direct implications on the cost of living, as imports become cheaper.
This has possibly led the inflation rate to decrease from previous months. It stood at 21.2% in April 2025, well down from more than 40% last year, and has made substantial progress further over the past several months. Reducing costs will help businesses that rely on imported raw materials for their production. Exporters, however, would feel the pinch, since their products would become less competitive, suffering a relative price hike in global markets.
Ghana’s Ministry of Trade and Industry is beginning to realise these double effects and is pushing for policy to promote export diversification and strengthen the competitiveness of Ghanaian industries in the face of currency appreciation.
Beyond just cushioning the blow to exporters, the Ministry plans to take steps to buffer the impact, including extending tax rebates and helping Ghanaians find new markets. The federal government’s communication strategy regarding these policy interventions will be essential to manage public expectations and maintain confidence in the nation’s long-term economic trajectory.
The Ghana Gold Board’s Role
The reason behind this cedi appreciation is a subject of ongoing debate. The strategic interventions of the newly inaugurated Ghana Gold Board (GoldBod) have been touted by the new Finance Minister, Dr. Cassiel Ato Forson, as the driving force behind the cedi’s recent strong performance in global currency rankings.
“The GoldBod has already begun to fulfil its objective and has contributed immensely to the recent stability of the Ghana cedi through gold reserve accumulation,” Dr. Forson said.
Speaking at the official inauguration of GoldBod’s Governing Board, Dr. Forson further noted that GoldBod is currently the only institution buying and assaying gold from small-scale miners, aiming to formalise the gold market and boost foreign exchange reserves. According to the Finance Minister, this “robust and coordinated policy framework” has been the primary cause of the 6.7% year-to-date rise in the cedi—as of 13 May 2025.
In defence of the surging cedi, Dr. Forson also credited the government’s fiscal consolidation initiative and careful management of public finances as key factors in the cedi’s stability. Experts need to consider the long-term sustainability of GoldBod’s activities and their impact on the overall fiscal health of Ghana.
Opposition and Independent Views
On the opposition side of the aisle, Kennedy Agyapong, a former Member of Parliament, has presented a contrasting perspective by highlighting how global economic conditions have been harming Ghana’s market specifically. In a recent interview on Asaase Radio, the former MP credited the Trump administration for the cedi’s strong performance within the world economy.
“Let’s be honest, some of the stability we are seeing now has roots in the global financial architecture, some of which were shaped during Trump’s time. It’s not solely about what’s happening here today,” Mr. Agyapong said.
That view tends to downplay the present government’s intentionality but insists on outside forces dictating Ghana’s economy. It also aligns with a broader argument that emerging market currencies tend to be highly affected by U.S. monetary policy, the structure of global trade, and the overall sentiment of investors—which may be set by both previous and current U.S. administrations.
Even economists, until recently, have correctly predicted the critical role that international commodity prices—which include gold and cocoa, Ghana’s two largest export commodities—would play in determining the value of the cedi.
Independent economic watchers—including those from the Brookings Institution—as well as other experts, have gone on record in favour of a balanced approach that considers the toll of domestic policy efforts, while recognising the contribution of the global economic environment.
Evidence of Cedi’s Strength and Inflation Drop
As the International Monetary Fund (IMF) noted in its latest report on Ghana, “The recent strengthening of the cedi reflects a combination of improved investor sentiment, supported by the government’s commitment to fiscal consolidation, and specific measures in the foreign exchange market.”
That suggests an alignment of domestic and international factors driving the currency’s performance. Complementing this, the IMF has provided Ghana with $3 billion in financial assistance through an Extended Credit Facility. This has supported the country’s economic programme and helped restore greater investor confidence.
The IMF programme also includes clear performance criteria for containing the fiscal deficit, managing inflation, and implementing structural reforms to enhance Ghana’s long-term economic prospects. Trading Economics figures also show the relative strength of the GHS, as their USD/GHS exchange rate statistics confirm that the cedi has actually gained value, strengthening against the dollar. Moreover, the Ghana Statistical Service further reported that year-on-year inflation declined to 21.2% in April 2025, down from 22.4% in March 2025. Together, this data reinforces the positive evidence of currency appreciation and falling inflation.
A closer look at these data trends, including comparisons with previous data and neighbouring countries that model the effects of structural economic reform, would provide the Ghanaian public with a more comprehensive view of how the cedi is truly performing.
Perhaps it is important to note that the combination of domestic policies, global economic conditions, and commodity prices probably contributes to the performance of the cedi. While the GoldBod initiative, advocated by the current administration, seems to be the major force at play, the larger picture of international currency movements and Ghana’s trade interactions with exported commodities such as gold and cocoa should not be overlooked.
For example, the recent rally in the price of gold on the international market has significantly improved Ghana’s export revenues, further pumping foreign exchange into the economy and strengthening the cedi. Beyond the technicalities of currency appreciation due to monetary policy effects, the value appreciation of the Ghana cedi represents a key economic development with wide-ranging impacts—from the Ghanaian domestic economy all the way to the international financial system.
The sustainability of this positive trend will be closely monitored by all stakeholders. Further study and research are needed to better understand not only whether the cedi’s appreciation is sustainable in the long term, but also its implications for Ghana’s economic development goals we all wish to see it achieve.
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
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