Economist questions BoG's 'obsession' with a strong cedi

An economist at the University of Ghana, Professor Godfred Bokpin, has criticised the Bank of Ghana’s persistent defence of the cedi, warning that the central bank’s strategy to maintain a low exchange rate is coming at a steep cost to the real economy.

According to him, the central bank’s focus on keeping the cedi strong, sometimes through heavy intervention, creates distortions that stifle liquidity, restrict access to credit, and slow economic growth.

“Our policymakers seem too obsessed with the exchange rate, bringing it low at any cost, forgetting that what matters most is stability. Businesses and people in the diaspora are not looking for a cedi that suddenly jumps up and down; they want predictability and confidence,” he said.

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Professor Bokpin described Ghana’s long-standing fixation on exchange rate performance as a “misguided national obsession.”

He argued that economic managers have prioritised short-term currency strength over long-term development goals such as job creation, productivity, and sustainable growth.

The economist further explained that while the Bank of Ghana’s interventions have helped hold the cedi firm, the approach has significantly tightened monetary conditions, leaving little room for the private sector to expand.

He noted that tight fiscal and monetary policies aimed at supporting the cedi have drained liquidity, making it harder for businesses and households to access funds.

“There is no money in the system, and liquidity conditions across the economy are worsening," he said.

Professor Bokpin further highlighted that billions of cedis spent to prop up the currency could have been redirected towards productive investments, business expansion, and job creation.

He also cautioned that exchange rate management has become a political trophy, pursued for short-term applause rather than sustainable results.

“A strong cedi that kills businesses and jobs is no success. Real stability is what gives people confidence, not an exchange rate that looks good for a few weeks,” he stressed.

SSD/MA

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