Bank of Ghana urged to keep cedi within stable range to protect jobs, exports and remittances – Prof Baah-Boateng
The Head of the Department of Economics at the University of Ghana, Professor William Baah-Boateng, has advised the Bank of Ghana to step in and manage the recent appreciation of the Ghana cedi by keeping it within a stable range.
He warned that sharp and unchecked gains in the currency could harm the broader economy, affecting exports, jobs, and remittances.
Speaking in an interview on Citi FM on Monday, [May 12, 2025], Professor Baah-Boateng said that although the recent strengthening of the cedi, from around GH¢15 to GH¢13 to the US dollar over a two-week period, might appear encouraging, it comes with potential downsides if not carefully managed.
“When the appreciation is sharp, you get a bit worried because you don’t know what’s down the line,” he said.
“We have to be cautious. I suggest that managers of the economy, if it’s appreciating and we have enough reserves, should intervene as they do during depreciation to keep it within a certain band. Otherwise, it could destabilise the entire structure.”
He noted that the Bank of Ghana, which has responsibility for monetary and exchange rate policy, should take the lead in maintaining exchange rate stability.
He also acknowledged that efforts by the government to manage public expenditure have played a role in easing pressure on the currency, but said both monetary and fiscal measures must work together.
Prof Baah-Boateng explained that while a stronger cedi may lower the cost of imports in the short term, it could reduce earnings for exporters, discourage diaspora remittances, and push local producers out of business.
“If exporters realise they are not benefiting, some may stop exporting and switch to importing,” he said.
“Remittances may also fall. If I send $1 at GH¢15, I can buy a bag of cement. But if the cedi appreciates to GH¢12 or GH¢13 and the price of cement remains the same, that dollar can’t buy it anymore. That discourages sending money home.”
Prof Baah-Boateng also pointed out that the appreciation could hurt COCOBOD’s operations. If the board has already fixed producer prices for cocoa purchases, he said, the stronger cedi could reduce the value of foreign inflows, creating a shortfall between what is paid to farmers and what the board needs to cover its costs.
He maintained that long-term stability is more beneficial to the economy than sudden gains, as it gives businesses and households the ability to plan and reduces the risk of future volatility.
“Everybody wants to get their pound of flesh in this economy,” he said. “As managers, you try to keep the currency within a stable range so the rest of the economy doesn’t suffer from unexpected shifts.”
Dr Baah-Boateng’s comments come as public discussions grow around the impact of the cedi’s recent performance, especially calls by traders and the Ghana Union of Traders Association (GUTA) to adjust prices in line with the appreciation.
Concerns remain over whether the current gains can be sustained, and what the long-term effects will be on local production and livelihoods.