The Africa Policy Lens (APL), a Policy Research and Analyst Organisation, has praised Ghana’s recent macroeconomic advancements but cautioned that the appreciation of the Cedi may be temporary unless it is bolstered by more profound structural reforms.
APL stated that although the Cedi has seen significant appreciation in the first half of 2025, this has primarily been the result of short-term measures. It highlighted substantial foreign exchange market interventions by the Bank of Ghana (approximately $1 billion from January to May 2025) and stringent fiscal measures such as the freezing of government expenditures and the suspension of arrears payments as key contributors to these improvements.
“These improvements, while promising, are founded on temporary supports that necessitate deeper reforms for sustainability,” APL remarked.
APL emphasizes that Ghana has experienced similar stability in the past, particularly from 2017 to 2019 during the IMF Extended Credit Facility program. During that period, the Cedi remained relatively stable due to enhanced fundamentals, disciplined fiscal policies, and favorable external conditions such as increased oil production and rising commodity prices.
APL advises that current policymakers should draw lessons from that era by prioritizing long-term reforms rather than depending on temporary interventions.
“There are valuable lessons from the past—especially from the 2017–2019 timeframe—that demonstrate that sustainable stability must be rooted in robust fundamentals, rather than in ad hoc measures,” the organization asserted.
In a press release dated Tuesday, May 27, 2025, APL underscored potential risks if existing strategies persist without modification, warning that an over-reliance on gold-backed interventions and deferred obligations could prove detrimental, particularly if commodity prices decline or external financing becomes more challenging.
“An excessive dependence on short-term mechanisms such as gold-backed foreign exchange support and deferred government obligations could render the economy susceptible to external shocks,” APL cautioned.
It has been indicated that analysts, including S&P Global Ratings and Fitch Solutions, have already cautioned that the Cedi may experience renewed depreciation in the latter half of 2025 if structural imbalances reemerge.
“Global credit observers are already highlighting risks, and Ghana must take prompt action to shield itself from renewed pressures,” APL stressed.
APL advocates for more robust policy measures, which include finalizing debt restructuring, diversifying sources of export revenue, and enhancing fiscal management. Additionally, it underscores the necessity of transparent communication from government entities to sustain investor confidence.
“To preserve the current momentum, reforms need to be audacious, and communication must be unambiguous to prevent unsettling the markets,” the group remarked.
In summary, APL asserts that although Ghana’s currency has demonstrated remarkable recovery, “the current challenge is to ensure that these gains are not only maintained but also expanded upon,” reiterating that “without long-term reforms, the present stability may not be sustainable.”
