The Appreciation of the Ghana Cedi: The Impact on Export
- OTI Editor
- 7 hours ago
- 4 min read
The Ghana Cedi (GHS) has experienced significant fluctuations over the years, largely influenced by macroeconomic factors, government policies, global market trends, and investor confidence. The recent appreciation of the Ghana Cedi has had a mixed impact on export revenues and business operations, creating both opportunities and challenges for different sectors.
In this article, we will examine the trajectory of the Ghana Cedi over the past 15 years, analyzing its fluctuations and underlying economic influences. We will also explore the adverse effects of its performance in quarter one of 2025, particularly its impact on export activities and the purchasing power of consumers. Despite the appreciation of the Cedi, domestic goods have maintained stable price levels, further constraining consumer spending and economic growth.
The Gradual Depreciation of the Ghana Cedi (2010 - 2014)
In 2010, the exchange rate of 1 USD to Ghanaian Cedi (GHS) fluctuated throughout the year. The highest recorded rate was 1.4890 GHS per USD in December 2010, while the lowest was 1.4100 GHS per USD in March 2010. The Cedi maintained relative stability in the early 2010s but began depreciating due to rising inflation and fiscal deficits. By 2014, the Cedi had lost nearly 40% of its value against the US dollar, driven by high government spending and external debt pressures.
Volatility and Policy Interventions (2015 - 2019)
The Bank of Ghana introduced monetary policies to stabilize the currency, including tightening liquidity and increasing interest rates. Despite interventions, the Cedi continued to depreciate, reaching GHS 5.50 per USD by 2019, partly due to trade imbalances and external debt servicing.
COVID-19 Impact and Recovery Efforts in the Period of 2020 - 2022
The pandemic exacerbated depreciation, with the Cedi hitting GHS 6.00 per USD in 2021 due to reduced foreign exchange inflows and economic disruptions. Recovery efforts, including IMF support and fiscal adjustments, helped stabilize the currency temporarily.
The Sharp Depreciation and Record Lows of the Ghana Cedi (2023 - 2024)
The Cedi faced one of its worst depreciations in 2023, reaching GHS 16.48 per USD in November 2024. Inflationary pressures, high debt levels, and investor uncertainty contributed to this decline. The Bank of Ghana continued interventions, but external factors, including global economic shifts, kept the currency under pressure. In 2024 alone, the USD/GHS rate rose by 22.52%, indicating continued pressure on the currency.
From 2010 to 2024, the exchange rate of 1 USD to Ghanaian Cedi (GHS) has undergone significant fluctuations and has increased by approximately 1,047%, reflecting a sharp depreciation of the Ghana Cedi against the US Dollar.
The Ghana Cedi has seen periods of sharp depreciation over the years, but recently, it has been appreciating against the US Dollar. This shift is largely due to strengthened monetary policies, improved investor confidence, and increased foreign exchange inflows. For instance, in early 2025, the Cedi experienced gains, supported by efforts from the Bank of Ghana to stabilize the exchange rate, as well as a rebound in export earnings.
The appreciation of the Ghana cedi has created mixed effects, particularly on export activity—stronger currency values have made Ghanaian exports relatively more expensive for foreign buyers, potentially slowing trade volumes.
Impact of the Appreciation of the Ghana Cedi on Business Operations
The appreciation of the Ghanaian Cedi has created a paradoxical effect on business operations. While exporters face challenges due to reduced competitiveness in global markets, industries dependent on imported raw materials, machinery, and fuel are benefiting from lower costs. This currency strength has enhanced profitability for key sectors such as manufacturing, retail, and transportation by reducing operational expenses.
Furthermore, the improved exchange rate has bolstered investor confidence, driving a surge in foreign direct investment (FDI) and opening new opportunities for business expansion. Companies engaged in international partnerships now find it easier to secure funding and negotiate more favorable trade agreements, further strengthening their market position. Despite these advantages, businesses must navigate the evolving economic landscape strategically to sustain long-term growth.
Impact of the Appreciation of the Ghana Cedi on Export Revenues
As the Ghanaian Cedi appreciates, the cost of exports rises, making Ghanaian commodities less competitive in international markets. Esthy Ama Asante, CEO and Head of Business Development at Organic Trade and Investments (OTI), highlights the pressing challenges facing the export industry and examines the impact of the Ghana Cedi’s appreciation on sales performance. She provides insights into how currency fluctuations are reshaping market dynamics, affecting pricing strategies, and influencing trade negotiations, ultimately altering the competitive landscape for exporters.
In February 2025, a ton of natural cocoa butter was exported at a wholesale price of GHS 260,000, equivalent to USD 16,990 per ton. However, due to the continuous appreciation of the Ghana Cedi—without corresponding adjustments in domestic pricing—the export price has surged significantly. As of May 24, 2025, the same product is now priced at USD 23,570 per ton, reflecting an increase of over 38% in less than three months. This sharp rise poses challenges for international buyers and underscores the need for price stabilization measures to maintain Ghana’s export competitiveness.
This has led to a decline in demand for key exports such as cocoa, gold, and agricultural products, as buyers seek more cost-effective alternatives from countries with weaker currencies. "As a result, several trade contracts are currently on hold, with stakeholders anticipating price adjustments to align with market expectations," Esthy explains.
A stronger Ghana Cedi results in exporters receiving fewer local currency units per dollar earned, directly impacting their revenue streams. This fluctuation has led to daily price instability for foreign clients, as frequent exchange rate adjustments create uncertainty in transactions. The decline in foreign exchange earnings has also squeezed profit margins, particularly for businesses that depend on international trade to sustain their operations. In response, some exporters are delaying transactions or renegotiating contracts to offset potential losses and maintain financial stability in a rapidly shifting market.
To maintain competitiveness in the global market, exporters must optimize their pricing strategies and invest in value-added processing to enhance product appeal and justify premium pricing. Additionally, the implementation of policies that regulate pricing and adjust goods valuation is essential to ensure market stability. Furthermore, measures should be taken to position the Ghana Cedi as a viable currency for transactions beyond Ghana’s borders, enabling seamless trade within the region and strengthening economic integration. Lastly, the Bank of Ghana must implement measures to ensure the long-term stability of the Cedi, enabling businesses to operate efficiently, mitigate financial uncertainties, and recover their losses.
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