Despite the recent appreciation of the Ghanaian cedi against the US dollar, prices of goods and services remain largely unchanged in retail markets. Since the beginning of 2025, the cedi has appreciated by 17.17%, currently trading at GH¢13.50 to the dollar. This performance places it among the top global currencies this year.
However, traders argue that this appreciation has not translated into lower prices because their inventories were purchased at a much higher exchange rate. Reducing prices now, they say, would result in significant financial losses.
“We bought these goods when the exchange rate was much higher than it is now,” one trader explained. “Until we sell off existing stock, reducing prices isn’t possible. Maybe when we restock at the new rate, prices will begin to reflect the change.”
This position contrasts with calls from industry groups such as the Spare Parts Dealers Association, which has encouraged its members to align their prices with the cedi’s improved value to offer consumers some relief.
Historically, the Ghanaian cedi has been plagued by instability, consistently losing ground against major international currencies like the US dollar, British pound, euro, and Japanese yen. In 2024, the situation worsened, with the cedi depreciating by roughly 24% against the dollar. According to the World Bank’s October 2024 Africa Pulse report, it was among the four worst-performing currencies in Sub-Saharan Africa. Around the same time, Bloomberg also listed the cedi as one of the poorest performers globally.
This prolonged depreciation had severe consequences. Public confidence in the currency waned, inflation surged, and the cost of living spiked. The hardest hit were low-income households, who faced shrinking purchasing power and rising prices for essential goods and services.
In contrast, the recent upward trend in the cedi’s value represents a significant shift. This article explores the underlying causes of this unexpected rebound, its economic implications, and whether the improvement can be sustained. It also considers how policymakers might use this positive momentum to foster economic stability and equitable growth.
Several factors have contributed to the cedi’s recovery. Key among them are increased gold reserves, tighter fiscal discipline by the government, stronger export performance—particularly from gold and cocoa—and a reduction in foreign debt servicing obligations. While not all these elements have equal impact, their combined influence has been instrumental in driving the cedi’s recent appreciation.
Understanding which of these factors play the most pivotal roles is crucial for shaping future economic policy and ensuring the current gains are not only preserved but also used to support long-term development.
Source: Other News Agencies
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