Professor William Baah-Boateng, an economist and professor at the University of Ghana, has voiced alarm over the sudden and quick appreciation of the Ghanaian Cedi, cautioning that although the trend appears to be beneficial, it may have unforeseen repercussions for important economic sectors.
His prudence follows recent reports showing a notable recovery in the Cedi’s value relative to major foreign currencies. GH¢13.29 to the US dollar is the current interbank rate, which is a significant improvement after values above GH¢16 earlier this year.
Prof. Baah-Boateng stressed that a rapid appreciation of the currency could have unfavorable effects and called for a deliberate response to its upward trajectory during his appearance on the Citi Breakfast Show on Monday, May 12, 2025.
“My concern a bit is that the appreciation is very sharp. And when the appreciation is that sharp, you get a bit worried because you may not know what is down there and have to be cautious,” he stated.
He clarified that although a stronger Cedi can assist reduce import costs, it also reduces the competitiveness of Ghanaian exports, which may deter exporting and increase dependency on imports.
“When there is an appreciation, we are happy, but we may not know what is in the reversal. When you have an appreciation, it encourages import and discourages export. When there is appreciation, and there is import, it reflects on domestic prices.
“On the other side, there will be a problem as exporters will also begin to complain because they are going to get less amount of money when they export. When the exporters see that they are not benefiting when they export, they will leave the export and go on to import.”
Prof. Baah-Boateng also issued a warning that if local producers are unable to match the lower pricing of imported goods, then greater imports may harm native manufacturing.
“Also, domestic production is going to have a problem because when you have more imports to come and compete with the domestic market. Remember, local prices may not have gone up, so they may be producing using a higher price compared to what is coming into the country.
“So, what is coming in from outside will then come, as it were, to compete with the domestic market, and when that happens, it will undermine our economic growth,” he noted.
In response to the recent appreciation of the Cedi, the Ghana Union of Traders’ Association (GUTA) has called on its members to lower the pricing of goods and services.