Governor of the Bank of Ghana, Dr. Johnson Asiama, has revealed that the recent surge in the value of the cedi has led to an almost 50% decline in remittance inflows, as many Ghanaians abroad pause sending money for local projects.
Speaking at the launch of the Bank of Ghana Chair in Finance and Economics at the University of Ghana on Tuesday, August 5, Dr. Asiama said the strong performance of the cedi is influencing the behaviour of the Ghanaian diaspora.
The local currency has appreciated by over 40% against the US dollar, 31% against the British pound, and 24% against the euro in recent months. This rally, the Governor explained, has been driven by improved macroeconomic stability, falling inflation, and robust external reserves.
However, the appreciation has had unintended consequences.
“The appreciation of the cedi so far, Ghanaians are interpreting this differently… People who used to send remittances for projects have suddenly stopped, and so we have observed a near 50% decline in remittance inflows,” Dr. Asiama noted.
He also called for corresponding adjustments in the prices of building materials, citing cement as an example, given that inflation is on the decline.
“If you are doing projects in Ghana, cement prices must also adjust, not so? Inflation is coming down so the prices of those building materials must also adjust… on the balance it shouldn’t matter,” he said.
The Governor suggested that the Bank of Ghana and other stakeholders may need to embark on an international outreach campaign to encourage continued remittance flows.
“Someone told me this morning we need to do a roadshow across the top remittance originating countries… we need to go and explain to them to continue sending their monies regardless where the exchange rate is,” he added.