Sustaining the cedi's remarkable recovery

The Ghana Cedi has recorded one of the most remarkable turnaround stories in recent economic history.

After being among the world's worst-performing currencies in 2022 and 2023, the Ghana Cedi has risen over 42 per cent year-to-date in 2025, effectively reversing nearly all the losses that characterised those turbulent years.

This extraordinary recovery is not merely a statistical curiosity—it represents a fundamental restoration of confidence in the economy.

The country’s gross international reserves have climbed to $11.1 billion, providing 4.8 months of import cover, while the country recorded a robust trade surplus of $4.14 billion in the first four months of 2025.

Export earnings have grown by over 60 per cent, driven primarily by gold, cocoa and oil.

The implications of this currency strength extend far beyond exchange rate charts, given that the economy is an import-led one.

For ordinary Ghanaians, a stronger cedi means imported goods—from fuel to food items—becoming more affordable, helping to ease the cost-of-living pressures that have squeezed household budgets for years.

Businesses that rely on imported raw materials and equipment can now plan with greater confidence, knowing their input costs are more predictable.

Perhaps most significantly, the cedi's recovery has helped anchor inflation expectations, with inflation dropping to 13.7 per cent in June, marking the sixth consecutive month of decline and the lowest level since December 2021.

When people believe the currency will remain stable, they're less likely to rush into panic buying or demand excessive wage increases to compensate for anticipated price hikes.

The international community has taken notice of this achievement. Standard & Poor's upgrade of the country’s sovereign credit rating from Selective Default to CCC+ reflects renewed faith in the economy.

This improvement, while still leaving room for further progress, opens doors to cheaper international financing and signals to global investors that Ghana is back on track.

For the business community, currency stability signifies the return of long-term planning. Companies can once again make multi-year investment decisions without constantly hedging against currency collapse.

This is particularly crucial for sectors such as manufacturing and agriculture, where investment payback periods extend well beyond quarterly reporting cycles.

While it is good to celebrate these achievements, the Daily Graphic believes that this should not overshadow the work needed to sustain them.

The Bank of Ghana (BoG) Governor's speech at the Graphic Business/Stanbic Bank Breakfast Meeting last Tuesday correctly identified the main challenges ahead, and tackling them will require coordinated efforts across various areas.

First, our country must speed up its transition from exporting raw commodities to processing and adding value to them locally.

The current export boom, although welcome, remains dangerously reliant on global commodity prices beyond our influence.

Every tonne of raw cocoa beans we export represents missed opportunities for local processing, job creation, and more profitable exports.

The same applies to our gold and oil resources — we must encourage local refining and the growth of petrochemical industries.

Second, the Daily Graphic joins calls for the need to tackle the persistent dollarisation of the domestic economy. Too many sectors—from real estate to private education—continue to quote prices in foreign currency despite serving purely local markets.

This practice not only violates our legal tender laws but also erodes confidence in the very currency we are working to strengthen.

Enforcing these laws and encouraging cedi-denominated transactions must become a national priority.

The country’s export earnings retention also requires urgent attention.

While exporters earn more foreign exchange, too much remains offshore rather than circulating through the domestic economy.

We need policies that encourage local reinvestment of export proceeds through tax incentives, preferential credit access and procurement preferences.

The Daily Graphic believes building a more sophisticated foreign exchange market will provide businesses with the tools to manage currency risk professionally.

The BoG’s expansion of forward auctions and development of basic derivatives markets represent crucial infrastructure that will reduce panic-driven volatility.

Sustaining the cedi's recovery cannot be left to policymakers alone.

Businesses must develop proper foreign exchange risk management practices rather than treating currency fluctuations as unavoidable disasters.

Banks need to expand their hedging products and advisory services. Citizens must embrace their national currency as a source of pride rather than a necessary inconvenience.

The Ghana Cedi's remarkable recovery proves that sound economic management, policy coordination and national commitment can overcome even the most daunting challenges.

We must build on this foundation to create lasting prosperity for all Ghanaians.

The currency's strength is not an end in itself—it is a platform for the economic transformation the nation deserves.