Prof. Bokpin cautions against fixation on exchange rate

An economist at the University of Ghana, Professor Godfred Bokpin, has cautioned that Ghana’s growing fixation on the cedi’s exchange rate could undermine broader economic stability.

Speaking on JoyNews’ Newsfile programme on Saturday, August 23, 2025, Prof. Bokpin said the country was “too fixated on the exchange rate, rather than the fundamentals of the economy.”

He described the recent sharp appreciation of the cedi as “not stability” but “disruption,” explaining that the pace of change left businesses and importers unable to adjust.

“Any sharp appreciation that is not backed by productivity or structural reforms reverses in a matter of months. It is not sustainable,” he warned.

Prof. Bokpin also urged the Bank of Ghana and policymakers not to rely excessively on directives to control market behaviour.

“Don’t use forceful regulations to solve things that must be solved with demand and supply,” he said.

While pointing to structural weaknesses in the economy, he acknowledged some recent interventions, particularly in cocoa pricing. “I see a certain genuine effort on the part of the government to meet the cocoa farmers halfway,” he noted.

He urged that savings from inefficiencies in state enterprises should be redirected to support farmers.

The economist argued that long-term stability, rather than sharp short-term appreciation of the cedi, was needed to safeguard jobs, remittances, exports, and the growth of the private sector.