Ghana’s Economy Rebounds With Cedi’s Remarkable Surge.
Ghana’s economy is experiencing a remarkable revival, propelled by a surging cedi that has become the world’s best-performing currency in 2025. According to a Bloomberg report on 4 June 2025, the cedi has appreciated by over 42% against the U.S. dollar since January, driving inflation to a three-year low of 18.4% in May and restoring economic momentum. This turnaround, underpinned by strategic reforms under President John Dramani Mahama, has sparked optimism about Ghana’s future.
A Robust Economic Strategy
President Mahama’s administration has implemented an eight-pillar economic plan, focusing on fiscal discipline, export growth, and infrastructure development. Key initiatives include completing the IMF programme by May 2026, reopening capital markets, and reforming public financial management. The government’s efforts have already yielded results: Ghana achieved its debt-to-GDP target of 55% three years ahead of schedule and boosted international reserves to GH¢10.6 billion by April 2025, reducing the national debt stock by approximately GH¢150 billion.
Speaking to the Ghana National Association of Teachers, President Mahama emphasised stability and inclusive prosperity. First-quarter GDP growth reached 5.4%, signalling a return to a robust growth trajectory. The Bank of Ghana has also played a pivotal role, raising the benchmark interest rate to 28% in March and absorbing GH¢79.8 billion in liquidity to curb inflation, which dropped from 21.2% in April to 18.4% in May.
Tangible Benefits for Ghanaians
The cedi’s strength is translating into real improvements for Ghanaians. Importers are reaping significant savings, with one contractor reporting a 48% price drop for a block moulding machine, from GH¢25,000 to GH¢13,000. Fuel prices have fallen by 15%, with petrol now selling for under GH¢12 per litre, leading to a 15% reduction in transport fares. Food prices are also declining: a bag of “Dubai” rice has dropped from GH¢460 to GH¢370, and a 50kg bag of imported rice from GH¢950 to GH¢750. Cooking oil and cement prices have similarly decreased, easing cost-of-living pressures.
Structural Reforms and Global Tailwinds
Analysts attribute the cedi’s rally to structural improvements, including the Bank of Ghana’s Gold4Oil and GoldBod programmes, which increased gold reserves by 40.6% between May 2024 and April 2025. A policy requiring 20% of gold export proceeds to be converted to cedis has stabilised foreign exchange supply. The removal of taxes like the E-levy and prudent public spending have further bolstered fiscal credibility. Ghana’s debt restructuring, with no major external repayments due until July 2025, has eased forex pressures, while the central bank injected $490 million into the market in April.
Global factors have also favoured Ghana. A 10% weakening of the U.S. dollar, coupled with record-high prices for gold ($3,400 per ounce) and cocoa ($10,000 per ton), has boosted export revenues. The formalisation of small-scale mining has increased legal gold exports, strengthening Ghana’s external position. On 16 June 2025, Fitch Ratings upgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating to ‘B-’ from ‘Restricted Default’, citing normalised relations with commercial creditors following a $13.1 billion Eurobond restructuring in October 2024.
Striking a Balance
President Mahama has cautioned that an overly strong cedi could harm exports, suggesting an optimal exchange rate of 10 to 12 cedis per U.S. dollar to balance the needs of importers and exporters. Sustaining this momentum will require disciplined policymaking and transparent governance. Professor Eric Oteng-Abayie of Kwame Nkrumah University of Science and Technology highlights the role of inclusive growth, substantive reforms, and trustworthy governance in fostering investor confidence and reducing capital flight.
A Model for Economic Revival?
While challenges remain, Ghana’s recovery offers a potential blueprint for other emerging economies. The combination of strategic reforms, prudent monetary policy, and favourable global conditions has set the stage for sustained growth. As Austin Kwesi Okere, founder of CWG Plc, notes, “Ghana’s case may well become a model for how transparent governance and strategic reforms can drive economic revival—if the momentum can be maintained.”
With the cedi’s surge improving living standards and economic prospects, Ghana is poised to celebrate a brighter future, provided it stays the course.
