Ghana in Focus Special: The Cedi appreciation - The Good, Bad and the Ugly

Send us Fan MailGhana's currency, the cedi, has undergone a remarkable transformation in 2025, emerging as the world's best-performing currency just two and a half years after being ranked the world's worst in 2022. This extraordinary turnaround has seen the cedi appreciate by nearly 50% against the US dollar since January, strengthening from 15 cedis per dollar to approximately 10.2 cedis today. Such a dramatic shift deserves examination to understand both its causes and potential sustainability.The foundations of this currency revival can be traced to December's decisive election results, which saw John Mahama and the NDC secure the largest margin of victory in Ghana's recent electoral history. This political shift signalled improved investor confidence, as the new administration quickly implemented substantial economic reforms. These included cutting government expenditure and waste—areas the previous administration had been reluctant to address—and streamlining the budget through measures that proved popular with both voters and the business community, such as eliminating the COVID levy, emissions levy, and e-levy.Perhaps the most striking economic achievement has been the stabilization of inflation. At the close of 2022, Ghana's inflation rate stood at a staggering 54.8%. While it had declined to around 28% by the last election, it has now fallen to approximately 18.4%, down from 23% in May. This downward trajectory reflects the current government's commitment to fiscal discipline, including restrictions on first-class travel for government officials.The successful restructuring of $13 billion in Eurobond debt has further eased Ghana's external debt burden. With the cedi's appreciation against the dollar, the government has effectively paid half of its restructured debt to external creditors, creating more fiscal space. This debt restructuring, combined with disciplined spending, is expected to reduce Ghana's debt-to-GDP ratio from 95% in 2022 to approximately 60% by the end of this year.Agriculture, particularly crops like cocoa and cashew nuts, has experienced strong growth supported by irrigation and mechanization programs. The mining sector, especially lithium (which is crucial for AI and electric vehicles), is expanding rapidly, alongside manufacturing and construction.  These factors have led to credit rating upgrades, with Fitch recently improving Ghana's rating from default to B- with a stable outlook.Outlook ==== The World Bank and IMF both acknowledge Ghana's progress but stress the importance of:Continuing fiscal disciplineEnhancing domestic revenue mobilizationImplementing structural reforms in energy, agriculture, and financeSupport the showDonate/Support the show:    https://www.buzzsprout.com/1793098/supportWe offer a consultation session for those who wish to relocate to Ghana , do business in Ghana , buy land, buying a property or even starting  business in Ghana.  We offer professional support tailored on your needs and wants. We provide valuable information that can assist you in your relocation like the Ghana card how/where to register your business.We can also signpost you to other agencies that can help in your relocation as well as business and investment opportunities.We charge a rate of US$30 for an hour's consultation or US$20 for a 30 minute consultation briefing. To book your consultation please email [email protected] on Youtube - just look for the Ghana/Afrika in Focus podcast on Youtube and click the notification bell so that every time I upload a new podcast it automatically comes to your feed. Tell your family and friends.