Cedi’s unpredictable gains pose risk to businesses – Kenneth Thompson

Kenneth Thompson, former CEO of Dalex Finance, has cautioned that the recent sharp appreciation of the Ghanaian cedi against the US dollar could harm businesses due to its unpredictability and weak economic underpinnings.

In a recent interview, Mr Thompson warned that while the cedi’s strengthening may appear positive on the surface, it lacks the backing of real economic improvements.

As a result, he said, it presents a serious planning challenge for businesses especially those reliant on imports or with dollar-linked expenses.

“The fundamentals of the economy haven’t changed, if they had, we’d be seeing a gradual, sustained appreciation not this sudden spike,” he noted.

He questioned whether the Bank of Ghana is managing the currency within a clear exchange rate band.

“Is it between 12 and 13 cedis, or 12 and 15? I don’t know,” Thompson said, adding that this uncertainty makes financial forecasting difficult for businesses.

For companies setting prices, budgeting, or managing foreign exchange exposure, volatility in the cedi poses significant risks.

“If I’m planning now, what rate do I use? If I get it wrong, my business could collapse,” he stressed.

Mr Thompson acknowledged interventions like gold-backed support for the currency but emphasized that without long-term stability, firms could face severe financial strain.

“I don’t know what the rate will be in July or December; this kind of unpredictability makes it nearly impossible to plan with confidence,” he said.

His comments come amid broader concerns about the sustainability of Ghana’s macroeconomic indicators and the need for credible, consistent monetary policy to support long-term growth.