Business

Cedi Gaining Momentum On Global Market & Issues Arising

Daniel Kwadwo Owusu, Country Managing Partner of Deloitte Ghana, has urged the government to reassure business leaders that the recent appreciation of the cedi is sustainable and not a temporary phenomenon. Speaking at the 9th Ghana CEO Summit and Expo on May 26, 2025, Owusu highlighted ongoing uncertainties among businesses regarding the cedi’s future stability. “There are also issues with high utility tariffs, high transportation costs, and the general cost of doing business,” he noted during his address on “Transforming Business and Governance for Ghana’s Economic Reset.” Owusu cautioned against short-term policy measures that fail to deliver lasting stability without fundamental economic reforms.

While acknowledging that a strong currency is beneficial, he emphasized that it does not automatically translate into lower consumer prices if domestic cost pressures—such as transportation and energy—remain unaddressed. Owusu also called for greater economic diversification, pointing out Ghana’s heavy reliance on gold and cocoa exports. “Diversification will make our economy less vulnerable to those big global price swings,” he explained.

Reflecting on past experiences, Owusu referenced the post-IMF bailout period in 2017 when the cedi recovered and inflation dropped to about 11.8%. However, consumer prices did not significantly decline, a trend he attributes to unresolved structural issues in the economy. “They stayed relatively high because of the deeper structural issues in the economy that have not been addressed,” he stressed.

Owusu also urged businesses to proactively adapt to economic changes. He expressed concern over some companies quoting foreign exchange rates divergent from those set by the Bank of Ghana, stating that such practices undermine the notion of an economic reset. “I am speaking to CEOs because there cannot be an economic reset unless we transform as a people,” he concluded.

Cedi’s Recent Performance and Outlook

Ghana’s local currency has maintained an upward trend, trading at GH¢10.35 to the US dollar as of noon on May 27, 2025.

Bloomberg data indicates this appreciation is part of a broader stabilization trend, supported by domestic policy reforms and favorable external conditions. The Bank of Ghana and economic experts attribute the cedi’s strengthening to several key factors, including the establishment of the Ghana Gold Board, continued backing from the International Monetary Fund (IMF), and tighter macroeconomic controls. These initiatives have bolstered investor confidence and contributed to the currency’s relative stability.

Despite these positive developments, analysts warn that long-term stability requires addressing deeper structural challenges, such as Ghana’s high import dependency and vulnerability to fluctuations in global commodity prices. Experts recommend prioritizing export diversification, implementing more effective monetary policies, and maintaining fiscal discipline to sustain the cedi’s resilience.

Economic Advisor Predicts Single-Digit Cedi

Cedi

Dr. Sa-ad Iddrisu, an Economic Advisor to Finance Minister Dr. Ato Forson, has predicted that the cedi will soon achieve a single-digit exchange rate against the US dollar, endorsing the popular “break the 8” mantra. Dr. Iddrisu praised the collaboration between the Bank of Ghana and the Ministry of Finance, attributing the cedi’s improved performance to their effective policy coordination rather than external factors.

He stated, “Given the effective policies implemented and the strong policy coordination between the Ministry of Finance and the Bank of Ghana, the cedi will no doubt break the 8 against the dollar.” This optimistic outlook contrasts with some voices within the ruling party who argue that the cedi’s recent gains may be temporary. However, Dr. Iddrisu remains confident in the sustainability of the currency’s strengthening trajectory.

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