Nana Amoto Mensah, the Executive Director of C-nergy Global Holdings, has warned that Ghana’s increasing dependence on exchange rate stability as a fundamental policy anchor may jeopardize local industries and hinder job creation in the long term.
In an interview on Monday, November 17, 2025, he remarked that although the recent strengthening of the Cedi and the decrease in inflation are encouraging signs, it is crucial for policymakers to consider the structural risks linked to an excessively aggressive emphasis on exchange rate targeting.
He elaborated that Ghana’s inflation-targeting framework, which was adopted in 2002 and fully implemented from 2010, continues to be a valuable instrument but has demonstrated limited effectiveness in recent years.
He attributed this to fiscal leakages, ongoing exchange rate pressures, and external shocks—such as those encountered in 2022—that frequently undermine the framework’s capacity to produce consistent results.
“When these external shocks occur, you struggle to meet the inflation target because you become overly focused on internal issues,” he stated.
“With limited control over the external sector, you start to encounter challenges.”
Nana Amoto Mensah cautioned that while the appreciation of the Cedi may alleviate inflation and reduce interest rates, it also leads to unintended repercussions for the wider economy.
“As the Cedi appreciates against the dollar, our exports become pricier for foreign markets,” he clarified.
“This situation drives us towards imports since fewer cedis are required to acquire goods. If this trend continues, it effectively undermines local industries and hampers job creation.”
He recognized the short-term advantages of the current policy direction, highlighting the decline in inflation to single digits and the reduction in interest rates from over 30% last year to approximately 24%. He also noted a significant decrease in Treasury bill rates.
Nevertheless, he emphasized that these short-term gains should not obscure the long-term risks.
“In the immediate future, this strategy yields outcomes. However, if you depend excessively on exchange rate anchoring to influence fiscal and monetary policy, it will ultimately harm domestic production,” he warned.
