Ghana’s currency, the cedi, has stunned markets with a dramatic 42% gain against the US dollar since January, outperforming all other African and emerging market currencies. This unexpected surge has helped shrink the country’s foreign debt burden, providing much-needed fiscal breathing space as Ghana recovers from a recent debt default and economic crisis.
President John Mahama highlighted the currency’s strong performance at the African Development Bank meeting, noting that it helped reduce Ghana’s total debt by nearly 150 billion cedis in just five months. He projected that if this trend continues, the country could reach its 2028 debt sustainability targets by the end of this year, enabling new investments in key sectors of the economy.
The cedi’s rise contrasts sharply with the struggles of other African currencies. Analysts point to a combination of factors behind the surge, including record-high gold prices — which have hit 28 new highs this year — a robust IMF programme, and restrictive monetary policies. These factors have reinforced investor confidence and stabilized currency markets in Ghana.
Additional support for the cedi has come from domestic holders of US dollar-denominated debt converting back into local currency. Ghana’s central bank governor, Johnson Asiama, stated that the central bank had not intervened with its reserves, crediting instead tighter monetary policy, more transparent foreign exchange auctions, and increased remittance inflows.
Despite the optimistic outlook, some experts caution that the rally might be temporary. Analysts like Hasnain Malik and Lutz Röhmeyer warn of potential risks, including falling cocoa and oil prices, key exports for Ghana, and IMF projections that suggest a possible future depreciation of the currency.
Source: Business day