Cedi’s Sharp Appreciation Could Hurt Exports and Domestic Industry — Economist Warns

Economist and University of Ghana professor William Baah-Boateng has cautioned that the Ghanaian cedi’s rapid appreciation, while beneficial in some respects, could spell trouble for key sectors of the economy if not carefully managed.

Speaking on the Citi Breakfast Show on Monday, May 12, 2025, Prof. Baah-Boateng expressed concern over the pace of the cedi’s rebound, noting that the interbank rate now hovers around GH¢13.29 to the US dollar—up significantly from earlier levels above GH¢16.

“My concern a bit is that the appreciation is very sharp. 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,” he stated.

While a stronger currency can reduce the cost of imports and potentially ease inflationary pressures, Prof. Baah-Boateng warned that it could also discourage exports, erode competitiveness, and increase reliance on foreign goods.

“When you have an appreciation, it encourages import and discourages export,” he explained. “Exporters will begin to complain because they are going to get a smaller amount of money when they export… They may leave export and go on to import.”

He added that a surge in imports could undermine domestic production, particularly if local manufacturers struggle to compete with cheaper imported goods.

“Domestic production is going to have a problem,” he said. “Imports coming in at lower prices can crowd out local goods. If this continues, it could ultimately stifle economic growth.”

Meanwhile, in light of the cedi’s gains, the Ghana Union of Traders’ Association (GUTA) has urged its members to reflect the improved exchange rate in the pricing of goods and services to provide relief to consumers.