The Association of Ghana Industries (AGI) has thrown its weight behind the Bank of Ghana’s (BoG) aggressive efforts to stabilise the cedi, describing the interventions as both necessary and timely despite their significant financial implications.
At a time when Ghana’s economy was grappling with deep uncertainty, the central bank’s decisive actions helped restore a measure of confidence that had nearly evaporated. For industry players, the return of relative exchange rate stability has offered critical relief, even as questions linger about the long-term cost of the strategy.
Speaking during a Quarterly Economic Outlook discussion organised by Channel 1 TV, the Chief Executive Officer of AGI, Seth Twum Akwaboah, emphasised that stabilising the local currency was not a matter of choice but an urgent necessity.
“We were in crisis, confidence level was so low, people investing their own resources became an issue. There was so much uncertainty in the system that required that level of stability,” he said.
Crisis that demanded decisive action
Ghana’s economic challenges between 2022 and 2023 created the backdrop for the central bank’s interventions. The period was marked by surging inflation, a sharply depreciating currency, and waning investor confidence. The cedi’s rapid decline significantly eroded purchasing power and introduced extreme volatility into the business environment.
For many companies—especially those reliant on imported inputs—the instability posed existential challenges. Exchange rate unpredictability made it nearly impossible to plan effectively, price goods accurately, or commit to medium- and long-term investments. Businesses found themselves constantly adjusting to shifting costs, while consumers bore the brunt through rising prices.
As uncertainty deepened, confidence in the broader economy weakened. Investors became cautious, and even domestic businesses hesitated to commit resources, unsure of what the next wave of currency depreciation might bring.
It was within this context that policymakers and industry leaders converged on a shared understanding: restoring stability to the cedi was essential to halting the economic slide.
Why cedi stability became non-negotiable
In an import-dependent economy like Ghana’s, exchange rate movements have immediate and far-reaching consequences. A weakening cedi drives up the cost of essential imports such as fuel, food, machinery, and raw materials, feeding directly into inflation and raising the overall cost of living.
At the height of the crisis, this dynamic intensified pressures across the economy. Households struggled to keep up with rising expenses, while businesses faced shrinking margins and mounting operational costs.
For companies, the volatility complicated inventory management and financial planning. Pricing strategies became increasingly difficult to maintain, and the risk associated with long-term contracts grew significantly. Under such conditions, economic activity slowed, and growth prospects dimmed.
According to Mr Akwaboah, the recent stabilisation of the cedi has provided a much-needed anchor for businesses. With reduced volatility, firms can now plan operations with greater confidence, manage risks more effectively, and focus on growth rather than survival.
Heavy interventions, high cost
Achieving this stability, however, came at a considerable price. The Bank of Ghana, in collaboration with the government, undertook large-scale interventions in the foreign exchange market, injecting more than $11 billion to support the cedi.
These measures contributed to a notable turnaround in the currency’s performance. From trading at about GH₵14.70 to the US dollar in December 2024, the cedi strengthened to approximately GH₵10.45 by the end of 2025. This appreciation helped ease imported inflation, stabilise prices, and improve overall economic sentiment.
Yet such sustained intervention is not without risks. Continuous participation in the foreign exchange market exposes the central bank to potential valuation losses and can place significant strain on foreign reserves. Maintaining this level of support over time raises concerns about sustainability, particularly in the face of external shocks.
In addition to direct market interventions, the BoG introduced innovative policy measures, including the gold-for-forex initiative implemented in partnership with the Ghana Gold Board. The programme aimed to reduce reliance on foreign currency by leveraging the country’s gold resources to support the cedi.
While the initiative contributed to exchange rate stability, it also came with financial costs. Reports suggest that the programme may have resulted in losses estimated at around $300 million. Despite this, AGI maintains that such trade-offs were unavoidable given the scale of the economic crisis.
Restoring confidence and reducing speculation
Beyond the immediate financial interventions, stabilising the cedi required addressing behavioural dynamics within the foreign exchange market. During periods of rapid depreciation, expectations of further losses often fuel speculative activity, including the hoarding of foreign currency.
This behaviour can exacerbate volatility, widen the gap between official and parallel market rates, and undermine policy efforts.
Mr Akwaboah noted that the recent stability has helped reverse these trends. With the cedi showing greater resilience, speculative pressures have eased, and market participants are returning to more normal trading patterns.
Importers, manufacturers, and traders—who rely on predictable exchange rates for their operations—have particularly benefited from this shift. The reduction in uncertainty has improved efficiency, lowered transaction risks, and supported a gradual return to stability across the market.
Industry backs BoG despite trade-offs
While acknowledging the financial burden placed on the central bank, AGI has made it clear that it supports the BoG’s approach. The association argues that the alternative—allowing the currency to continue its downward spiral—would have inflicted far greater damage on the economy.
Unchecked depreciation could have kept inflation at elevated levels, further eroded business confidence, and triggered deeper economic disruptions. In contrast, the stabilisation efforts have helped to contain inflationary pressures and create a more predictable environment for economic activity.
Mr Akwaboah also commended the central bank’s broader monetary policy stance, noting its role in reinforcing stability across the financial system. However, he stressed that stabilisation alone is not enough.
Call for productive credit to drive growth
Looking ahead, AGI is urging policymakers to ensure that the gains from macroeconomic stability translate into tangible economic growth. A key priority, according to the association, is improving access to credit for productive sectors, particularly manufacturing.
Mr Akwaboah argued that businesses need affordable financing to expand operations, invest in new technologies, and create jobs. Without this, the benefits of a stable currency may not fully translate into increased economic activity.
The call reflects a broader concern within the private sector: while stability is a crucial foundation, it must be complemented by policies that actively support growth and industrial development.
Currency strength and debt dynamics
The stabilisation of the cedi has also had implications for Ghana’s public debt profile. In dollar terms, the country’s debt increased by $11.9 billion, rising from $49.4 billion in December 2024 to $61.3 billion by the end of 2025.
However, when measured in local currency terms, the picture looks different. The appreciation of the cedi contributed to a decline in the debt stock from GH₵726.7 billion to GH₵641 billion over the same period.
With the economy valued at approximately $111 billion, Ghana’s debt-to-GDP ratio in dollar terms stands at around 55%. This highlights the significant role that exchange rate movements play in shaping fiscal indicators and perceptions of debt sustainability.
Stability at a price, but worth it
Ghana’s recent experience illustrates a fundamental economic reality: achieving stability often involves difficult trade-offs. In this case, the cost has been reflected in large-scale financial interventions, exposure to policy risks, and pressures on the central bank’s balance sheet.
For AGI and much of the private sector, however, the outcome justifies the approach. The stabilisation of the cedi has restored a level of confidence and predictability that the economy urgently needed.
Businesses are better positioned to plan and invest, inflationary pressures have eased, and the groundwork has been laid for a broader economic recovery.
As the country moves from stabilisation to growth, the challenge will be to sustain these gains while managing the financial consequences of past interventions. Policymakers will need to strike a careful balance between maintaining currency stability and ensuring that sufficient resources are available to support long-term development.
For now, industry leaders remain firm in their assessment. The cost of stabilising the cedi may have been high, but the cost of inaction, they argue, would have been far greater.
