IEA warns of possible cedi decline without long-term reforms

The Institute of Economic Affairs (IEA) predicts the Ghanaian Cedi could lose value again by December 2025 if the government doesn’t take serious steps to fix long-term problems in the economy.

At a press conference in Accra on Tuesday, May 27, Dr. Vladimir Antwi-Danso, a Senior Fellow at the IEA, warned that the recent gains in the Cedi’s value may not last.

“What we are doing is that we are not stabilizing permanently. We will relapse. By December, I believe that we will relapse. And this is coming from a technical point of view and not a political one. What I am saying is that it is not yet hurray for the Cedi appreciation,” he said.

Dr. Antwi-Danso urged the government to move away from short-term solutions and instead focus on real changes that can make the economy stronger. He said Ghana needs to boost local industries and focus on exporting more goods.

“Our forex appreciating, and the Cedi also appreciating is not the answer. You must do more you must try and be an export economy. That is the only way you stabilize your economy,” he stressed.

His warning came a day after Bank of Ghana Governor Dr. Johnson Asiamah spoke at the Ghana CEO Summit. Dr. Asiamah announced that the Cedi had gained 24.1% against the US dollar.

He also addressed claims that the Central Bank was artificially raising the Cedi’s value. “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.

The Bank of Ghana credits the Cedi’s performance to strict monetary policies, changes in the foreign exchange market, and more money coming into the country through remittances.

Still, Dr. Antwi-Danso’s comments show that many experts remain concerned. They believe that unless deeper reforms are made, Ghana’s economy will stay at risk, especially from global changes and sudden drops in currency value.

The IEA is calling for a strong national plan that focuses on making and exporting more goods, which they say is the only way to create lasting economic stability.