Professor Godfred Bokpin, a respected economist, attributes the current stability of the Ghanaian cedi to a confluence of factors, including consistent policy decisions implemented by the incumbent government, building upon the groundwork laid by the previous New Patriotic Party (NPP) administration. He argues that the economic improvements witnessed are not solely the product of recent actions but rather a culmination of efforts spanning across administrations, particularly the period following the 2024 elections. The previous NPP government, despite facing challenges, established crucial economic buffers, most notably a significant increase in foreign reserves, partly achieved through innovative programs like the Gold-for-Reserves initiative. This accumulation of reserves provided a much-needed cushion and contributed to the current stability of the cedi.
The current government, according to Prof. Bokpin, has wisely built upon these reserves and maintained a prudent fiscal management approach. This continuity in economic policy, especially concerning foreign reserves, has been instrumental in bolstering the cedi’s strength. While acknowledging the current government’s role, Prof. Bokpin emphasizes the significance of the previous NPP government’s contributions. He points out that after the 2024 elections, under the International Monetary Fund (IMF) program, Ghana missed almost all economic indicators except for two key areas: GDP growth, which exceeded the program’s target, ending the year at 5.7%, and international reserves, which saw a substantial increase.
The success in these two areas, particularly the growth in foreign reserves, provided a strong foundation upon which the current government could build. Prof. Bokpin asserts that this accumulation of reserves, initiated under the previous NPP administration, is a critical factor in the cedi’s current resilience. He underscores that the Gold-for-Reserves program, implemented by the previous government, played a significant role in boosting foreign reserves, thereby mitigating the pressures on the cedi.
This continuity in economic management, especially the focus on bolstering foreign reserves, has created a more stable foreign exchange market. By maintaining and building upon the reserves accumulated by the previous government, the current administration has ensured a more robust and less volatile cedi. This stability is a testament to the long-term benefits of consistent economic policies and the importance of building strong economic fundamentals.
Prof. Bokpin’s analysis emphasizes the crucial role of both short-term and long-term economic strategies. While acknowledging the current government’s efforts in maintaining fiscal prudence, he highlights the foundational role played by the previous NPP government in building vital economic buffers. The combination of these efforts, spanning across administrations, has created a synergistic effect, resulting in the cedi’s current stability. This demonstrates the importance of long-term economic planning and the positive impact of sustained, consistent policies across political transitions.
In essence, the current stability of the Ghanaian cedi is not a sudden phenomenon but rather the result of a continuous effort, with the previous NPP government laying the groundwork by accumulating foreign reserves, particularly through initiatives like the Gold-for-Reserves program, and the current government building upon this foundation by maintaining fiscal discipline and continuing to bolster reserves. This sustained approach to economic management, focused on strengthening foreign reserves, has created a more resilient cedi and a more stable foreign exchange market, underscoring the importance of long-term planning and policy consistency in achieving economic stability.
