Sharp Cedi Appreciation Worries Economist Over Economic Risks
Accra, May 12, 2025 – A leading economist and Professor at the University of Ghana, Professor William Baah-Boateng, has sounded the alarm over the rapid appreciation of the Ghanaian Cedi, warning that while the trend may appear encouraging, it could carry serious economic repercussions if not carefully managed.
Speaking on the Citi Breakfast Show on Monday, May 12, Prof. Baah-Boateng described the recent appreciation of the Cedi — now standing at GH¢13.29 to the US dollar, down from over GH¢16 earlier this year — as “too sharp” and deserving of caution.
“My concern a bit is that the appreciation is very sharp,” he noted. “And when the appreciation is that sharp, you get a bit worried because you may not know what is down there and have to be cautious.”
While acknowledging that a stronger local currency can reduce the cost of imports, Prof. Baah-Boateng stressed that a sudden appreciation could weaken Ghana’s export competitiveness, disincentivize local production, and ultimately undermine economic growth.
“When there is an appreciation, we are happy, but we may not know what is in the reversal. It encourages import and discourages export,” he explained. “Exporters will begin to complain because they are going to get less money for their products. They might shift to importing instead.”
He added that increased imports would flood the domestic market with cheaper foreign goods, undercutting local producers who face higher production costs.
“Domestic production is going to have a problem,” Prof. Baah-Boateng cautioned. “Imported goods will compete with locally produced ones, and that will undermine our economic growth.”
Meanwhile, the Ghana Union of Traders’ Association (GUTA) has welcomed the Cedi’s rebound and called on members to lower prices of goods and services in line with the currency’s appreciation — a move aimed at providing some relief to consumers.
As analysts continue to monitor the Cedi’s performance, many agree that while stability is crucial, policy makers must avoid complacency and ensure that gains in currency strength translate into long-term economic sustainability rather than short-term distortions.
Please download our HOTDIGITAL ONLINE APP and follow HotDigital Online on our social media platforms to stay updated on our upcoming initiatives.
#HotDigitalHealthAwareness #CommunityHealth #GhanaNursesAssociationUK #HealthMatters #HotDigitalOnline #StrongerTogether
