The Institute of Economic Affairs (IEA) has issued a stark warning about the future of the Ghanaian cedi, cautioning that the local currency could face significant depreciation by the end of the year if urgent steps are not taken to boost local production and drive export-led growth.

In a policy engagement held in Accra on Tuesday May 27, 2025, IEA Fellow Professor Vladimir Antwi-Danso stressed that recent gains made by the cedi, appreciating 24.1% against the US dollar, may be temporary unless underpinned by stronger economic fundamentals.

“Our cedi has appreciated by 24.1% against the US dollar. Let me emphasise that the Central Bank is not using international reserves to prop up the cedi, nor are we engineering an unsustainable appreciation,” Professor Antwi-Danso said.

However, he warned that the country could experience a reversal of these gains if structural weaknesses in the economy are not addressed.

He urged policymakers to look beyond short-term interventions and implement long-term strategies focused on enhancing productivity, strengthening export competitiveness, and promoting industrialisation through value-added manufacturing.

“What we are doing is not stabilising permanently. We will relapse. By December, I believe we will relapse. And this is coming from a technical point of view, not a political one,” he cautioned.

The IEA's warning has triggered widespread concern among economic observers, with many pointing to the potential impact on businesses, inflation, and overall economic stability should the currency falter again.

Responding to these concerns, the Governor of the Bank of Ghana, Dr Johnson Asiama, rejected claims that the Central Bank is manipulating the exchange rate to influence the cedi's value.

Speaking at the 9th Ghana CEO Summit held in Accra on May 26, 2025, Dr Asiama attributed the currency’s performance to improved macroeconomic management.

“Our cedi has appreciated by 24.1% against the US dollar. Let me emphasise that the Central Bank is not using international reserves to prop up the cedi, nor are we engineering an unsustainable appreciation,” he said, echoing remarks made by Professor Antwi-Danso.

Dr Asiama explained that the currency’s recent gains have been driven by structural reforms, including disciplined monetary policy, enhanced market surveillance, increased remittance inflows, and targeted foreign exchange interventions.

“These are not short-term interventions, they are deliberate, structural changes aimed at ensuring long-term stability,” he added.

Economists and industry leaders agree that long-term resilience of the cedi will depend heavily on domestic economic transformation.

They argue that boosting local manufacturing, reducing import dependency, and supporting entrepreneurship are critical to sustaining currency stability.

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