Multiple Factors Drove Cedi’s 40% Appreciation – Analyst
By: Solomon Nartey Tetteh
Economic Analyst Emmanuel Boateng says no single factor can sufficiently explain the nearly 40 per cent appreciation of the Ghanaian cedi recorded in the previous fiscal year, stressing that the development was the result of a combination of domestic and external influences.
His comment comes amid recent International Monetary Fund (IMF) data revealing that the Ghana cedi has become the best-performing currency in Africa, gaining over 40 per cent against the US dollar.
Speaking on Business Breakfast on Zed 101.9FM, Mr. Boateng explained that the performance of the local currency is shaped by both internal policy measures and conditions in the global economy, with external factors playing an increasingly dominant role in recent times.
“When you look at the framework we operate as a country, the strength of the cedi is influenced by a mix of domestic actions and developments in the external environment. For some time now, external factors have actually played a more significant role in determining the performance of the currency relative to domestic factors,” he noted.
He pointed to favourable trends in the global commodity market as a key contributor, particularly strong performances in gold prices, which reached record highs during the period under review. According to him, Ghana’s position as a major gold producer meant the country benefited from improved export earnings, supporting foreign exchange inflows.
Mr. Boateng also highlighted the impact of Ghana’s engagement under the International Monetary Fund (IMF)-supported programme, under which the country received about US$3 billion in financing.
He noted that the disbursement of programme tranches, including one received in mid-2024, significantly strengthened the government’s fiscal consolidation efforts.
“The IMF programme enhanced our ability to stabilise the economy, and when you consider the debt restructuring exercise, it substantially reduced the burden of debt servicing,” he said.
He commended the government for its performance in settling restructured debts, describing the pace of payments as better than anticipated. “In the past year, government has been very proactive in meeting its debt obligations, and even this year, payments have exceeded expectations,” he added.
The analyst said the restoration of policy credibility has also played an important domestic role in boosting investor confidence and stabilising the currency.
Mr. Boateng stressed that the cedi’s strong performance was the outcome of a favourable global environment, improved commodity prices, disciplined fiscal management, effective debt restructuring, and renewed confidence in economic governance, rather than the result of any single policy action.
