As Ghana’s economy shows signs of stabilization after years of turmoil, a prominent academic is sounding the alarm over the persistent fallout from the nation’s volatile currency, the cedi. Dr. Anomah, a senior lecturer at Kumasi Technical University, has pointed to a recent dip in the cedi’s value as a trigger for widespread disruptions, from factory closures to stalled construction projects and soaring food prices.
“The depreciation of the cedi has contributed to unemployment in the country, especially in various enterprises such as factories, masonry, and carpentry,” Dr. Anomah told reporters this week. He highlighted the plight of Ghana’s diaspora, many of whom rely on remittances to fuel home investments. “Ghanaians working abroad can’t invest in their businesses in Ghana, and even those who have sent money to masons for their building projects are struggling,” he added.
The economist’s concerns extend to everyday markets, where he says trading has ground to a halt amid economic uncertainty. “Foodstuffs and items are increasing day in and day out, and marketing is not going well,” Dr. Anomah lamented. He also decried the erosion of local industries, arguing that cheaper imported goods are overwhelming domestic producers. “Local businesses, once the backbone of Ghana’s economic growth, are collapsing, while cheaper foreign goods continue to flood the market because their cost is lower than our local goods,” he stated.
Dr. Anomah’s remarks come at a pivotal moment for Ghana’s economy, which has grappled with currency instability since a severe crisis in 2022 that saw the cedi lose more than 50% of its value against the U.S. dollar. That episode, exacerbated by high global commodity prices, debt defaults, and capital flight, fueled double-digit inflation and strained import-dependent sectors.
Yet the narrative of unrelenting depreciation does not fully align with 2025’s trajectory. After hitting a low of around 15.5 cedis per dollar in early 2025, the local currency staged a dramatic recovery, appreciating by approximately 40% year-to-date to trade at 11.13 cedis per dollar as of Monday. This rebound — the strongest among African currencies this year — has been driven by improved foreign exchange reserves, tighter monetary policy from the Bank of Ghana, and a surge in gold exports under a new state-backed initiative. Inflation, which topped 20% at the start of the year, has eased below 10%, providing some relief to households battered by prior price spikes.
However, Dr. Anomah appears to be referencing a more recent softening: the cedi has weakened by 2.54% over the past month, shedding some of its earlier gains amid seasonal import demands and global dollar strength. This short-term reversal underscores the fragility of Ghana’s progress, with economists warning that without sustained reforms, volatility could return.
Critically, while past depreciations — like the 22% slide in 2022 — indeed amplified import costs, driving up food prices by as much as 30% in some categories and contributing to a spike in unemployment to 13.4% that year, the 2025 appreciation tells a more nuanced story. Cheaper imports in local-currency terms have helped temper inflation and bolster consumer spending, supporting projected GDP growth of 4.9% this year, up from 4% in 2024. Agriculture and services, key employers, are expanding, potentially offsetting job losses in import-competing sectors like manufacturing.
That said, Dr. Anomah’s point on local businesses rings true in the current context, albeit for the opposite reason. A stronger cedi has made foreign goods more affordable, eroding the price edge of domestic products and prompting concerns over “Dutch disease” effects — where currency strength hampers export competitiveness and floods markets with imports. Ghana’s trade deficit narrowed slightly in the first half of 2025, but small-scale enterprises in textiles and agro-processing report margin squeezes, with some factories scaling back operations. Official data shows a modest uptick in unemployment to around 14% in urban areas, though structural factors like skills mismatches play a larger role than currency swings alone.
On remittances — which totaled $4.8 billion in 2024, surpassing foreign direct investment — the appreciation has been a boon, not a burden. Diaspora dollars now stretch further, potentially easing investment hurdles for the estimated 3 million Ghanaians abroad. Initiatives like the Ghana Diaspora Investment Fund aim to channel these flows into productive sectors, though high transfer fees (averaging 6-7%) and bureaucratic red tape persist as bigger obstacles than exchange rates.
Dr. Anomah’s broader lament about market slowdowns and rising food costs partially echoes lingering scars from earlier depreciations, when staple prices like maize and rice jumped 25-40%. Even with inflation cooling, year-on-year food increases hover at 12%, outpacing wage growth and hitting low-income households hardest. Trading volumes in Accra’s markets have dipped 5-7% in recent months, per vendor surveys, amid cautious consumer behavior.
For now, Dr. Anomah’s voice serves as a reminder that Ghana’s economic story is one of fits and starts — a cautionary tale of how currency volatility ripples through factories, family budgets, and diaspora dreams long after the headlines fade.
