Artificial stability or sustainable equilibrium? Rethinking the Cedi’s performance

When the government initially attributed the cedi’s improved performance primarily to fiscal consolidation, I challenged that interpretation and argued that substantial interventions by the Bank of Ghana (BoG) in the foreign-exchange market were a major, if not the principal, factor underpinning the observed stability.

The more fundamental solution lies in transforming the productive structure of the economy: increasing agricultural and industrial output, reducing import dependence, diversifying exports, expanding domestic value addition, and strengthening the country’s capacity to generate foreign exchange through a broad range of productive activities.

My central argument has therefore been that a sustainable and resilient cedi requires attention to the structural foundations of the Ghanaian economy rather than excessive reliance on foreign-exchange interventions.