Cedi Stability Misunderstood — Joe Jackson
Economist and CEO of Dalex Finance, Joe Jackson, has cautioned that Ghana’s exchange rate challenges are being widely misunderstood, warning that misdiagnosis of the problem continues to place sustained pressure on the Ghana cedi.
Speaking at the 2026 Dean of Business School Lecture Series at the University of Professional Studies Accra, Mr. Jackson described the cedi’s trajectory not as a straightforward story of weakness, but one defined by deep volatility rooted in structural imbalances.
He pointed out that between 2016 and 2024, the cedi depreciated by nearly 71 percent against the US dollar, only to stage a sharp rebound of about 40 percent between 2024 and 2025. This dramatic swing, he argued, reflects instability rather than recovery.
Central to his argument is a rejection of the common narrative that Ghana’s currency struggles are driven by weak export performance. According to him, Ghana has in fact recorded consistent trade surpluses in recent years, suggesting that foreign exchange inflows are not the primary issue. Instead, the real challenge lies in what happens after those inflows are generated.
Mr. Jackson explained that although Ghana earns substantial foreign exchange from key exports such as gold, oil, and cocoa, a significant portion of that value does not remain within the domestic economy. Outflows through service imports, profit repatriation, external debt servicing, and capital flight continue to erode the gains made on the export side.
In 2024 alone, Ghana recorded a trade surplus of $5.1 billion, yet nearly $8 billion exited the economy through these channels. The imbalance, he noted, effectively cancels out the benefits of export earnings, leaving the currency exposed.
He highlighted the gold sector as a clear example of this structural weakness. Despite exporting approximately $11.9 billion worth of gold, Ghana retained less than half of that value domestically. In contrast, countries with smaller export volumes, such as South Africa and Botswana, manage to retain a larger share of their mineral wealth.
To address part of the problem, government introduced the Ghana Gold Board initiative aimed at centralising gold purchases and improving value retention. Mr. Jackson acknowledged early gains, noting that the programme has helped align local gold prices with international markets and formalise segments of small-scale mining.
Initial estimates suggest the initiative could boost gold export value significantly, with artisanal mining expected to play a larger role. However, he cautioned that while such interventions are useful, they do not address the most critical leakages draining foreign exchange.
“Kudos to GOLDBOD, but the leakages remain,” he stated.
Beyond external flows, Mr. Jackson warned that inflation continues to pose a major threat to currency stability. Ghana’s inflation, which peaked at 54 percent in 2022 and remained elevated through 2024, has created a persistent gap with advanced economies such as the United States.
This disparity, he explained, fuels import demand, drives up interest rates, and discourages the holding of cedi-denominated assets, gradually weakening the currency from within.
He emphasised that stabilising the cedi will require a coordinated policy response across multiple fronts. Retaining more export value through local participation, strengthening domestic supply chains, and promoting value addition must go hand in hand with fiscal discipline and prudent monetary policy. Failure on either front, he warned, will leave the currency vulnerable to continued volatility.
Summing up his assessment, Mr. Jackson described the cedi’s instability as a reflection of deeper systemic issues rather than surface-level shocks.
“A volatile cedi is not just an economic problem. It is a discipline problem in disguise,” he said.
