IEA warns of cedi depreciation by year-end without boost in local production

The Institute of Economic Affairs (IEA) has issued a cautionary note to the government, warning that the Cedi could face renewed depreciation by December 2025 if bold steps are not taken to ramp up local production and drive export-led growth.

At a press briefing in Accra, IEA Fellow, Professor Vladimir Antwi-Danso, said the recent gains made by the Cedi are encouraging but fragile.

He emphasised that without a fundamental shift towards industrialisation, value addition, and export competitiveness, the local currency could quickly lose its footing.

“Our forex reserves and the Cedi’s recent appreciation are positive signs, but they are not enough. We need to move from short-term currency interventions to long-term economic transformation. The only sustainable way to stabilise the Cedi is by becoming an export-driven economy. Otherwise, we risk a relapse, and I believe we may see signs of that as early as December,” Prof. Antwi-Danso said.

Describing his remarks as based on technical analysis rather than political sentiment, it’s too early to celebrate. Without structural reforms, the current stability won’t last,” he warned.

Meanwhile, the Governor of the Bank of Ghana, Dr. Johnson Asiamah, has dismissed speculation that the Central Bank is artificially supporting the Cedi. Speaking at the Ghana CEO Summit in Accra on Monday, May 26, Dr. Asiamah attributed the currency’s strength to sound economic management.

“Our Cedi has appreciated by 24.1% against the US dollar. Let me state clearly that the Bank of Ghana is not depleting reserves to boost the Cedi, nor are we engineering an artificial appreciation,” he said.