Optimism surrounding the stability of Ghana’s currency, the Cedi, at the start of the year has been short-lived, as traders and analysts raise alarms over its sharp depreciation. Despite beginning 2025 on a relatively stable note, the Cedi has suffered significant losses against the U.S. dollar just six weeks into the year, sparking fresh concerns about Ghana’s economic outlook.
According to data from the Bank of Ghana, the Cedi has depreciated by 6.5% against the U.S. dollar since January 1. The local currency fell from GH₵14.50 per dollar at the start of the year to the current exchange rate of GH₵15.55 per dollar, with forex bureaus offering even higher rates.
Economists warn that if this rapid depreciation continues unchecked, the Cedi could lose over 50% of its value against the U.S. dollar by the end of the year. Such a scenario could have dire consequences for the country’s already strained economy, leading to higher costs of living and further eroding consumer confidence.
Businesses and traders, who initially expressed optimism about the currency’s performance in early 2025, are now grappling with the challenges posed by the unstable exchange rate. Many fear that the falling Cedi will continue to drive up the cost of imported goods, compounding inflationary pressures in the domestic market.
One of the most immediate effects of the Cedi’s depreciation has been seen in rising fuel costs. Despite a decline in global oil prices, the weak Cedi has prevented Ghanaians from benefiting from lower prices at the pump. Instead, fuel prices remain high, placing additional financial strain on households and businesses.