Ghana’s recent cedi appreciation and stability stem from deliberate fiscal and monetary reforms rather than temporary factors, according to Dr. Paul Appiah-Konadu, an economist at Pentecost University.
In an analysis shared with The High Street Journal, he highlighted reduced government borrowing, tighter monetary controls, and strategic foreign reserve management as key drivers of the currency’s resilience.
“This government is pursuing prudent fiscal management—reduced borrowing and value-for-money public spending—which must be sustained,” Dr. Appiah-Konadu stated. He noted Ghana’s projected 2025 fiscal deficit will drop sharply to 3.1% from 7.9% in 2024, alongside lower annual expenditure, marking a first in the Fourth Republic.
The Bank of Ghana’s foreign reserves, now exceeding $9 billion, and gold reserves of 31.5 tonnes—bolstered by a 2023 gold purchase program—have enabled proactive market interventions, including $400 million in recent dollar sales to stabilize the cedi.
Investor confidence has surged, with treasury bill auctions oversubscribed for ten consecutive weeks and interest rates halving from 28% in December 2024 to 15%. “This reflects renewed trust in cedi-denominated assets,” he said.
However, Dr. Appiah-Konadu cautioned that long-term stability requires diversifying exports and reducing import dependency. Gold, cocoa, and crude oil still account for 84.1% of export revenues, leaving Ghana vulnerable to global price shocks.
“The current stability is not a fluke but rooted in sound policies,” he emphasized, urging a national push for import substitution industrialization. While acknowledging progress, he stressed that sustaining gains demands broader structural reforms to insulate the economy from external volatility.
