Ghana Cedi’s Recovery Driven by Local Reforms, Not Just Global Trends – Dr. Theo Acheampong

Economist and risk analyst Dr. Theo Acheampong has emphasized that the recent gains made by the Ghana cedi are not solely due to global factors, but largely the result of deliberate domestic policy actions.

In a detailed social media post, the Imani Africa Vice President explained that while global conditions—such as a slightly weaker US dollar and improving investor sentiment—have had some influence, Ghana’s fiscal and monetary reforms have been the key drivers behind the cedi’s recent appreciation.

He noted that tight monetary policy, strategic forex interventions by the Bank of Ghana, and enhanced fiscal discipline under the IMF programme have helped restore macroeconomic stability and investor confidence.

The Ghana cedi has appreciated by over 17% since early April 2025, trading from GHS15.46 to GHS13.15 per US dollar, during a period when the U.S. Dollar Index declined by just 2.46%. Dr. Acheampong said this contrast highlights that local economic signals, not just external shifts, are largely responsible for the currency’s improvement.

Among the local measures he cited were:

• The removal of unpopular taxes like the E-Levy and COVID-19 levy in the 2025 budget.
• Continued support from the IMF, including a pending $370 million disbursement.
• A steady decline in inflation, now at 21.2% as of April 2025.
• Bank of Ghana’s interventions using gold reserves and other foreign exchange buffers.

He credited both current and past administrations for building strong reserves and implementing reforms, but cautioned that sustained discipline is required.

“The gains are encouraging, but they must be safeguarded by resisting the temptation of election-year overspending,” he warned.

Dr. Acheampong urged analysts to look beyond short-term indicators and instead assess long-term policy impact on currency movements, arguing that local economic management ultimately shapes market confidence and exchange rate performance.