Research and Policy Analysts at Africa Policy Lens (APL) have identified several factors that have led to the substantial appreciation of the Ghanaian Cedi in 2025, marking a significant recovery following a challenging 2024.
As reported by APL, the Cedi has strengthened by over 20% against the US dollar this year, positioning it among the top-performing currencies worldwide. By early May 2025, the Cedi was valued at approximately GH¢13.5 per dollar, indicating a 17% increase since January.
APL attributes this resurgence to a mix of factors, including the government’s fiscal consolidation efforts, which involve a significant cut in public expenditure, the halting of new projects, and a moratorium on the clearance of arrears, all of which have alleviated pressure on the currency.
“The Ministry of Finance is said to have withheld payments totaling around GH¢69 billion pending an audit,” APL remarked, “effectively reducing excess demand for foreign currency.”
Concurrently, the Bank of Ghana (BoG) has been instrumental in its strategic interventions. Via the Domestic Gold Purchase Programme (DGPP), the BoG has built up gold reserves that were subsequently utilized to bolster the Cedi through gold-backed foreign exchange operations. From January to May 2025, the central bank injected nearly $1 billion into the foreign exchange market.
“This included $490 million in April alone and $264 million in March,” APL highlighted, “which contributed to enhancing dollar liquidity and alleviating depreciation pressures.”
In a press release dated Tuesday, May 27, 2025, APL observes that while these measures have provided short-term stability, their long-term viability is questionable.
“Utilizing reserves and postponing payments are not sustainable solutions,” the think tank emphasized.
APL also recognizes the impact of external elements, such as the decline of the US dollar amid global trade tensions, which have played a role in the recent appreciation of the Cedi.
Notwithstanding the advancements made, APL cautions that immediate benefits must not result in complacency. The organization stresses the importance of ongoing reforms, urging the government to capitalize on the existing momentum by implementing enduring policy measures focused on fiscal discipline, export diversification, and institutional transparency.
“Immediate benefits should not cause policymakers to become inactive,” APL warned. “Sustainable growth relies on profound, structural reforms.”
