Mid-Year Budget Review: Govt ditches foreign currency and Cedi takes over in contracts
President John Dramani Mahama has directed that no government-awarded contract should be denominated in foreign currency, irrespective of the source of funding.
The policy which starts immediately is part of measures the government has instituted to curb the persistent and deep-rooted culture of dollarisation in the economy, a situation which is undermining public trust and confidence in the Ghanaian cedi, the Finance Minister, Dr Cassiel Ato Forson, announced yesterday.
“We also want to use this opportunity to remind the public that per the Foreign Exchange Act, 2006 (Act 723), companies, institutions and individuals are prohibited from pricing, advertising, receipting or making payments for goods and services in foreign currencies in Ghana without written authorisation from the Bank of Ghana,” the Finance Minister stated when he presented the first mid-year budget review of the government to Parliament.
Moving a motion for the revised estimates which did not ask for supplementary spending, Dr Forson explained that the pricing of goods and services and the award of contracts in foreign currency posed significant risk to fiscal management, with severe implications for the stability of the local currency.
Unfortunately, he said, foreign currencies were becoming the means of transacting business in the country.
The minister of finance said the trend, if not checked, would erode the confidence in the local currency, drive inflation and result in the loss of value in the symbol of sovereignty.
Exceptional resilience
Encouraging Ghanaians to show confidence in the local currency, Dr Forson said the Ghana cedi had demonstrated exceptional resilience and strength in recent months.
Majority Members of Parliament reacting to the Minority walkout ahead of the mid-year budget review presentation
“I am happy to inform the House that our precious cedi, which once upon a time was trading at about GH¢17 to the US dollar, was trading at about GH¢10.4 as of yesterday, July 23, 2025.
“Similarly, the cedi, which was once trading at GH¢21 to the Great British Pound, was trading at about GH¢14.1 as at yesterday, July 23, 2025,” he said.
He said as at the end of June 2025, the cedi appreciated by 42.6 per cent against the US Dollar, 30.3 per cent against the British Pound, and 25.6 per cent against the Euro.
Dr Forson stated that the outturn was a significant reversal compared to same period in 2024 when the cedi depreciated by 18.6 per cent, 17.9 per cent, and 16.0 per cent, respectively.
He added that it was the first time that this level of appreciation had been recorded in the 60-year history of the Ghana cedi.
Upgrade
The finance minister stated that rating agencies, which once classified the sovereign creditworthiness as junk, were beginning to upgrade the ratings.
For instance, he said Fitch Ratings upgraded Ghana's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'B-' with a stable outlook from 'Restricted Default' (RD) on June 17, 2025.
Dr Forson added that the International Monetary Fund (IMF) programme was back on track with the successful conclusion of the fourth review by the IMF Executive Board on July 7, 2025, which immediately triggered a disbursement of $367 million.
“Mr Speaker, beyond the numbers, this is a story of sound leadership, better economic management and a restoration of hope to a nation once in despair.
“Let me, on behalf of President John Mahama, sincerely thank the people of Ghana for their trust, patience and continued support,” he said.
Deliberate policies
Dr Forson explained that the deliberate policies announced in the 2025 Budget to stabilise the Ghana cedi were yielding massive results.
“The results we are witnessing are not by chance.
They are the fruits of hard work, discipline and intentional policies.
“Mr Speaker, the cedi’s performance in the first half of this year has been impressive! The Ghana cedi experienced significant appreciation against all major trading currencies in the first six months of 2025.
“We have almost reversed all the cedi’s depreciation in 2022, 2023 and 2024. This level of appreciation of the Ghana Cedi has never happened in the history of our nation.
“Mr Speaker, colleagues, Ghanafo, cedi no apicki! apicki apicki apicki!!!,” he alliterated, mimicking a popular hiplife song.
The minister said the gains were largely due to strong fiscal consolidation, tight monetary policy, improved external sector balances, renewed investor confidence, positive market sentiments, credit rating upgrades and successfully securing the staff level agreement and subsequent board approval on the 4th Review of the IMF programme.
He said the cedi’s rebound signalled that Ghana’s economic foundations were once again beginning to firm up.
He added that sustaining the stability would require continued fiscal discipline, supportive monetary policy, strong liquidity sterilisation, robust reserve accumulation supported by activities of the Ghana Gold Board and credible implementation of structural reforms.
