The persistent weakness of the Ghanaian cedi may not be driven by high import levels as widely believed, but rather by the country’s inability to retain earnings from exports, according to Joe Jackson, Chief Executive Officer of Dalex Finance.
Speaking during an interview on The Point of View, Mr Jackson challenged the long-held assumption that Ghana’s currency depreciation is mainly caused by an imbalance between imports and exports.
While acknowledging the conventional view that higher imports typically weaken a currency due to increased demand for foreign exchange, he argued that Ghana’s trade data tells a different story.
Over the past eight years, the country has consistently recorded trade surpluses, with export earnings exceeding imports significantly. Despite this, the cedi has continued to depreciate sharply, raising questions about the true underlying factors.
Mr Jackson pointed out that the cedi weakened from about GH¢4.5 to the dollar in 2017 to nearly GH¢14.7 by the end of 2024, even as the trade surplus expanded substantially over the same period.
He said this trend suggests that simply exporting more is not enough to stabilise the currency if the value generated from those exports does not remain within the domestic economy.
According to him, the widely circulated narrative blaming imports for the cedi’s struggles has gained traction across public discourse but does not align with empirical data.
Mr Jackson therefore called for a deeper examination of how export revenues are managed, emphasising the need for policies that ensure more of the value created from Ghana’s exports is retained locally to support currency stability.
