Ghana’s currency slide at the start of the year is less a crisis than a ritual — but one that continues to expose deeper fragilities in the economy’s structure and policy discipline.
The cedi has weakened by nearly six per cent against the US dollar since the turn of the year, slipping from about GH¢10.45 at the end of 2025 to roughly GH¢11.08 by April 24.
The losses have been mirrored across major currencies: the pound has climbed from GH¢14.00 to GH¢14.96, while the euro has strengthened from GH¢12.27 to GH¢12.90.
Commercial banks have adjusted in step, maintaining relatively narrow spreads; major lenders such as Stanbic and GCB Bank quoted selling rates between GH¢11.18 and GH¢11.30, depending on whether transactions involved electronic transfers or physical cash.
Familiar mix
Analysts say the latest bout of depreciation reflects a familiar mix of seasonal pressures and deeper structural imbalances.
A finance and tax analyst, Nelson Cudjoe Kuagbedzi, points to first-quarter demand dynamics — post-holiday import restocking, softer remittance inflows and profit repatriation by multinationals — as the immediate drivers of dollar demand.
A banking consultant, Dr Richmond Atuahene, agrees on the cyclical trigger but argues the underlying weakness runs deeper.
Ghana’s narrow export base and entrenched import dependence, he says, ensure that such seasonal pressures repeatedly translate into currency losses.
They describe the movement as “marginal” rather than disorderly. Demand from the commerce sector has remained steady, while inflows from remittance service providers have provided a partial counterweight.
In the retail segment, however, forex bureau rates edged higher, peaking near GH¢11.68, even as overall volatility remained contained.
For Mr Kuagbedzi, the pattern is consistent with a recurring seasonal cycle rather than a sudden deterioration in fundamentals. Businesses typically rebuild inventories after the Christmas period, tightening foreign exchange supply just as inflows ease.
Yet the routine nature of the trend does not make it benign. He argues that weak enforcement of foreign exchange regulations continues to amplify pressure on the cedi.
Despite directives requiring domestic transactions to be conducted in local currency, foreign currency pricing persists across sectors such as real estate, education and retail.
Structural demand
This, he says, entrenches structural demand for dollars and undermines the cedi’s role as the economy’s functional currency.
Stronger enforcement by the Bank of Ghana and the Ministry of Finance could, in his view, help plug this leakage and ease depreciation pressures over time.
He also flags the continued prominence of the parallel market, where informal operators distort price discovery and dilute the signalling effect of official exchange rates, complicating monetary policy transmission.
Beyond enforcement, Mr Kuagbedzi advocates building more resilient buffers.
Expanding gold exports and strengthening international reserves would, he argues, give policymakers greater capacity to manage volatility during periods of heightened demand.
Dr Atuahene’s critique extends further. While seasonal factors may trigger the cedi’s decline, he argues that structural trade imbalances sustain it.
Corporate profit repatriation in the first quarter, combined with relatively weak export earnings, routinely pushes foreign currency demand beyond what the central bank can supply.
“We are import dependent and until we find solution to that, the cedi has no good chance against the foreign currencies like the dollar, pound and euro,” he said.
For him, the deeper problem lies in policy continuity. Exchange rate management, he argues, has too often been shaped by electoral cycles, with heavy intervention in politically sensitive periods followed by renewed depreciation.
Political transitions
What is required instead is a long-term strategy that transcends political transitions.
He proposes a period 15 years to 20 years national export plan anchored on measurable targets: boosting non-traditional exports by at least 15 per cent annually, maintaining reserves equivalent to six months of import cover and gradually reducing import dependence.
In the absence of such a framework, the cedi is likely to remain exposed to the same seasonal swings and external shocks that have defined its recent trajectory — with households and businesses continuing to bear the cost through inflation and eroded purchasing power.
Ghana’s currency story, then, is not simply about the rhythms of the calendar. It is a test of whether cyclical pressures can finally force the structural reforms policymakers have long deferred.
Source:
www.graphic.com.gh
