The recent resurgence of the Ghana cedi against the US dollar has sparked optimism and cautious celebration among economic observers and political figures alike. Gabby Asare Otchere-Darko, a prominent member of the New Patriotic Party (NPP), expressed his delight at the cedi’s recovery, characterizing it as a welcome development that hopefully signifies a sustained positive trend. The cedi’s strengthening performance against the dollar indicates a potential shift in market sentiment and renewed confidence in Ghana’s economic management. This positive trajectory offers a glimmer of hope for businesses, consumers, and the overall economic outlook of the nation.
The cedi’s recent stability is evident in its exchange rates against the dollar. As of May 17, 2025, the buying rate stood at GHS12.21 per dollar, while the selling rate reached GHS13.00. Forex bureaus reported similar figures, with the cedi trading at GHS13.00 for dollar purchases and GHS13.65 for dollar sales. These figures represent a notable improvement compared to previous periods of volatility and depreciation, suggesting a potential turning point in the cedi’s performance. The sustained strengthening of the cedi could have a ripple effect across the Ghanaian economy, potentially easing inflationary pressures, stabilizing prices of essential goods, and boosting investor confidence.
Otchere-Darko attributed the cedi’s rebound, at least in part, to the Gold-for-Forex policy implemented under the leadership of former Vice President Dr. Mahamudu Bawumia. This innovative policy, which involves exchanging gold for foreign currency reserves, is credited with bolstering Ghana’s foreign exchange reserves and stabilizing the cedi. The policy’s perceived success has garnered international attention, with other gold-producing African nations, including Namibia, showing interest in adopting similar strategies. This recognition underscores the potential of the Gold-for-Forex policy as a valuable tool for managing currency fluctuations and strengthening economies in resource-rich countries.
The Gold-for-Forex policy aims to reduce reliance on traditional foreign exchange markets, which can be volatile and susceptible to external shocks. By utilizing its gold reserves, Ghana can directly acquire foreign currency, thereby mitigating the impact of fluctuations in global currency markets. This approach provides a more stable and predictable source of foreign exchange, which can contribute to long-term economic stability. The adoption of similar policies by other African nations could potentially lead to greater regional economic stability and cooperation.
While acknowledging the positive impact of the Gold-for-Forex policy, it’s essential to recognize that various factors contribute to currency fluctuations. Global economic conditions, commodity prices, investor sentiment, and domestic monetary and fiscal policies all play a role in determining exchange rates. The cedi’s recovery likely reflects a combination of these factors, and attributing it solely to one policy would be an oversimplification. A comprehensive analysis of the interplay between these factors is crucial for understanding the dynamics of currency markets and developing effective economic policies.
Otchere-Darko’s emphasis on transcending partisan politics in assessing economic progress is a crucial message. He urged Ghanaians to view economic successes as collective achievements that benefit the entire nation, regardless of political affiliation. This call for unity and a focus on shared national goals is essential for fostering a constructive political environment that prioritizes the well-being of all citizens. A collaborative approach to economic development, where all stakeholders work together towards common goals, is more likely to yield sustainable and inclusive growth. Excessive politicization of economic issues can hinder progress and create unnecessary divisions within society. A focus on evidence-based policymaking and constructive dialogue across the political spectrum can lead to more effective solutions and a stronger, more unified nation.
