The Ghana Cedi’s Comeback Story: How a Struggling Currency Found Its Footing in 2025 – Dr. Jabil
The Resurgence of the Ghana Cedi: Analyzing the Drivers Behind Its 2025 Appreciation
By Dr. Jabil Sayibu | May 27, 2025
For years, the Ghanaian cedi was a symbol of economic anxiety — battered by inflation, sinking against the world’s top currencies, and weighing heavily on the pockets of ordinary Ghanaians. But in a surprising twist, 2025 has brought a new chapter to that story: the cedi is back on its feet, and it’s stronger than anyone predicted.
As of May, Ghana’s cedi has gained 24.1% against the U.S. dollar, 16.2% against the British pound, and 14.1% against the euro — a dramatic turnaround that’s caught the attention of international markets, investors, and financial analysts across Africa.
So, how did a currency long viewed as fragile stage such a powerful resurgence? This feature dives deeper into the factors behind the cedi’s unexpected comeback — and what it means for Ghana’s economic future.
Behind the Headlines: A Nation’s Economic Recalibration
When you zoom out, the cedi’s rise isn’t just about exchange rates — it’s about policy discipline, market trust, and strategic choices made at the right moment.
At the center of the story is the Bank of Ghana (BoG), which has taken an unflinching stance on inflation. By holding its policy rate at 28.0%, the BoG sent a clear message to both local and international markets: stabilizing the cedi and taming inflation were top priorities. The results are showing — inflation dropped to 21.2% in April, down from 22.4% the previous month.
This tight monetary policy has made Ghanaian assets attractive to foreign investors, bringing much-needed capital into the country. “There’s a renewed sense of credibility in the Bank of Ghana’s actions,” notes Dr. Jabil Sayibu, a financial economist and budget analyst who closely tracks Ghana’s macroeconomic trends.
The IMF Factor: Confidence on the Global Stage
But no discussion of Ghana’s economic turnaround is complete without mentioning the $3 billion Extended Credit Facility the country is running with the International Monetary Fund (IMF).
This program isn’t just about money; it’s about reforms — tough ones. Fiscal discipline, better governance, and transparent reporting have been key conditions. The reward? Ghana is set to receive its third IMF disbursement of $370 million in June, bolstering its foreign exchange reserves and reassuring creditors that the country is on the right path.
These inflows are critical, as they help the government meet its external obligations without draining reserves or stoking panic.
Gold, Cocoa, Oil — and a Smart Reserve Strategy
On the ground, Ghana’s economy remains anchored in its exports: gold, cocoa, and oil. Global prices have stayed favorable, but what’s made the real difference is how Ghana manages these resources.
A standout example is the domestic gold-for-reserves program launched by the Bank of Ghana. Under this initiative, 20% of all gold mined in Ghana must be sold locally, allowing the central bank to strengthen its gold reserves and reduce the pressure on foreign exchange holdings. Recently, nine more gold producers signed onto the program, providing a steady pipeline of domestic gold — a smart cushion for currency stability.
Beyond Numbers: Restoring Market Faith
Currencies don’t just move on data; they move on sentiment. And in 2025, Ghana has been sending the right signals.
Through proactive forex market interventions, forward auctioning, and clear communication, the BoG has helped anchor market expectations. Simultaneously, the government’s push to cut deficits and increase domestic revenue mobilization has bolstered the sense that Ghana is serious about its macroeconomic management.
These combined efforts have sparked a virtuous cycle: as confidence grows, the cedi strengthens — and as the cedi strengthens, confidence grows further.
What’s Next: A Cautiously Optimistic Future
Despite the optimism, experts like Dr. Sayibu urge caution. “External risks, like commodity price swings or changes in global interest rates, can quickly change the landscape,” he warns.
For Ghana to sustain these gains, policy continuity will be essential. Avoiding election-year overspending, meeting IMF targets, and managing reserves wisely will determine whether the cedi’s current strength holds through the year and beyond.
A Moment of Opportunity
For ordinary Ghanaians, the cedi’s rebound offers a moment of relief — and perhaps, cautious hope. Import costs may ease, inflation pressures could soften, and investor interest in the country’s markets may unlock new opportunities.
But as with all economic stories, the real test is sustainability. Will Ghana’s policymakers stay the course? Will reforms hold, even when the political winds shift?
One thing is clear: after years in the shadow of bad headlines, the Ghana cedi has stepped back into the spotlight — and for now, it’s a story of resilience.
Dr. Jabil Sayibu is a financial economist and budget analyst specializing in fiscal policy, macroeconomic strategy, and public sector reform. He currently resides in the United States.
Source: Dr. Jabil Sayibu official Facebook account and Published by : Issifu Alidu Laa-Bandow
