Economist and lecturer at the University of Ghana, Professor William Baah-Boateng, has warned that the recent sharp movements in the Ghanaian cedi’s value could have damaging effects on the broader economy if not properly managed by the Bank of Ghana (BoG).
Speaking on the Citi Breakfast Show on Monday, October 20, Prof. Baah-Boateng said the recent appreciation of the cedi — moving from around GH¢12 to GH¢10 to the dollar — may appear positive at first glance, but such rapid changes create instability that harms both government revenue and business planning.
He stressed that the economy benefits most when the exchange rate remains stable rather than when the currency fluctuates sharply in either direction.
“Stability is the best. Appreciating and depreciating are not the best,” he said. “We were at GH¢12 and straight away we’re moving into GH¢10. That’s about a 20% shift, and while it may favour some sectors, the overall effect on the economy is negative.”
Prof. Baah-Boateng explained that the stronger cedi could reduce export earnings, particularly for cocoa farmers, and also shrink government revenue from foreign exchange transactions.
“Now that the cedi has moved from GH¢12 to GH¢10, expect government revenue to take a hit. The margin of export for cocoa will drop, and the appreciation will erode most of the gains for farmers,” he noted.
He therefore urged the central bank to manage the currency more deliberately to avoid wide swings that distort market confidence. “The Bank of Ghana should not allow the cedi to go up and come down in sharp jumps. Moving from GH¢10.5 to GH¢12.5 and back again is too much of a difference,” he cautioned.
Prof. Baah-Boateng’s comments come at a time of heightened public attention on the cedi’s exchange rate performance, following remarks by fellow economist Professor Godfred Bokpin, who has also warned that Ghana’s growing fixation on the cedi’s movement could distract from addressing deeper structural issues affecting the economy.
The call for currency stability highlights ongoing concerns among economists that while recent gains in the cedi may bring temporary relief, sustainable economic growth depends on long-term stability and predictable fiscal management.
