Is the Ghana cedi really Africa’s worst-performing currency?

A currency’s nominal exchange rate alone does not determine whether it is strong or weak. The fact that GH¢11.79 exchanges for approximately N1,325 does not, by itself, establish that the Ghana cedi is economically stronger than the Nigerian naira.

For instance, if US$1 exchanges for GH¢11.79 and approximately N1,325, the numerical difference between the two currencies reflects, in part, how they are denominated. To determine which currency is performing better, we must examine how each has appreciated or depreciated against a common benchmark, such as the US dollar, over a specified period.

The relevant questions, therefore, are these: How has the Ghana cedi performed relative to other African currencies? What economic fundamentals underpin its performance? And are the recent improvements in Ghana's macroeconomic indicators sustainable?

These questions deserve objective answers based on credible data rather than political sentiment or the numerical appearance of exchange rates.

Understanding Ghana's economic turnaround

Ghana has experienced significant economic difficulties in recent years, including high inflation, currency depreciation, rising public debt and substantial debt-servicing pressures. These challenges have affected businesses, households and the government's capacity to finance development.

Against this background, the government's efforts to restore macroeconomic stability under President John Dramani Mahama, with Dr Ato Forson as Finance Minister, deserve careful assessment.

However, any assessment of the country's economic performance must distinguish between improvements in economic indicators and the broader question of whether those improvements are translating into sustainable growth and better living conditions.

Fiscal discipline, efficient public expenditure, responsible debt management and effective revenue mobilisation are essential components of economic recovery. The challenge is to implement these principles consistently and ensure that their benefits extend beyond headline economic figures.

What has Ato Forson done to improve economic performance?

The Finance Minister's economic management agenda has emphasised fiscal discipline, improved public financial management and measures aimed at strengthening Ghana's external position.

Initiatives such as GoldBod, the Value for Money Office and policies intended to accelerate the accumulation of international reserves form part of the government's broader economic management agenda.

These initiatives should be assessed according to their objectives, implementation and measurable outcomes.

For instance, GoldBod's contribution should be evaluated in terms of its impact on gold exports, foreign-exchange inflows, reserve accumulation and the formalisation of gold trading. Similarly, the effectiveness of the Value for Money Office should be assessed by examining whether it improves expenditure efficiency, strengthens accountability and reduces waste in public spending.

The success of reserve-accumulation policies should also be measured against the growth and quality of international reserves, the country's external financing needs and its ability to withstand economic shocks.

It is important to recognise that economic recovery rarely results from one policy or individual alone. Government decisions, monetary policy, commodity prices, external financing conditions and private-sector activity can all influence economic outcomes.

Nevertheless, where policies produce measurable improvements, those gains deserve recognition. Equally, the government must remain accountable for ensuring that the improvements are sustained.

Is the Ghana cedi really the worst-performing currency?

The claim that the Ghana cedi is the worst-performing currency cannot be established simply by comparing its exchange rate with that of the Nigerian naira.

A meaningful comparison requires a clearly defined period and a consistent benchmark.

For example, comparing the percentage changes in the cedi's and naira's exchange rates against the US dollar between January and September 2026 would provide a more useful assessment than comparing their nominal exchange-rate levels.

The same principle applies when assessing the cedi against other African currencies.

A currency may have a relatively high nominal exchange rate against the dollar but still perform better over a particular period if it depreciates less than competing currencies. Conversely, a currency that appears numerically stronger may have experienced a substantial loss in value.

The appropriate question is therefore not simply how many units of a currency are exchanged for one US dollar, but how its value has changed over time and what economic factors explain that movement.

Exchange-rate performance should also be considered alongside inflation, interest rates, international reserves, external trade, fiscal conditions and investor confidence.

Ghana has recorded improvements in some important macroeconomic indicators. However, the country continues to face risks, including commodity-price volatility, energy costs, debt-servicing pressures and potential external shocks.

Stabilisation is not the same as complete recovery.

The real test is whether Ghana can maintain its economic gains over several years while translating macroeconomic stability into lower borrowing costs, stronger private-sector investment, increased production, more jobs and improved living standards.

Ultimately, those are the outcomes that matter most to ordinary Ghanaians.

International reserves and the cedi's stability

One of the important indicators of a country's external economic position is its stock of international reserves.

Ghana's international reserves reportedly increased from US$11.07 billion, equivalent to 4.2 months of import cover, in August 2026 to US$12.05 billion, equivalent to 4.5 months of import cover, in September 2026.

These figures should be confirmed against the Bank of Ghana's official data before publication.

If verified, the increase would represent an improvement in Ghana's external buffer and its capacity to meet international payment obligations.

Adequate reserves can help strengthen confidence in the economy, support external payments and provide a measure of protection against adverse developments in international markets.

However, reserve accumulation must be interpreted carefully. Its sustainability depends on the sources of the inflows, the country's external obligations and the extent to which reserves are available to meet those obligations.

It is therefore important to assess not only the headline reserve figure but also the quality and sustainability of the underlying inflows.

The cedi's relative stability should similarly be assessed using comparable exchange-rate data over a clearly defined period. A period of stability is encouraging, but maintaining that stability requires sound macroeconomic policies, sufficient foreign-exchange inflows and continued confidence in the economy.

Inflation and interest rates: What do the figures tell us?

Inflation is another important measure of economic performance.

Ghana has experienced a substantial decline in inflation from the elevated levels recorded during its recent economic difficulties. This is an important development because high inflation erodes purchasing power, increases business uncertainty and makes household budgeting more difficult.

The Bank of Ghana's medium-term inflation target is 8%, with a tolerance band of two percentage points on either side.

The latest inflation figure should be checked against the relevant Ghana Statistical Service release to establish whether inflation remains within the target band and whether recent movements indicate renewed price pressures.

It is also important to distinguish between disinflation and falling prices. When inflation declines, prices are generally rising more slowly; it does not necessarily mean that the prices of goods and services have returned to previous levels.

For ordinary Ghanaians, the practical question is whether incomes are recovering, essential goods are becoming more affordable and household purchasing power is improving.

Interest rates are equally important because they affect the cost of borrowing for businesses and individuals.

The Bank of Ghana's Monetary Policy Rate reportedly declined from 15.5% in January 2026 to 14.0% in September 2026. Commercial lending rates were also reported to have fallen from 20.58% in January to 15.94% in August 2026.

These figures should be verified against the Bank of Ghana's monetary policy announcements and banking-sector statistics before publication.

If confirmed, the declines would indicate an easing of monetary conditions. Lower borrowing costs can support investment, business expansion and economic activity.

However, a reduction in the policy rate does not automatically translate into affordable credit for every borrower. Actual lending rates depend on banks' funding costs, borrower risk, loan terms and other market conditions.

The broader objective must therefore be to create an environment in which businesses can access reasonably priced credit, expand production and create employment.

Ghana must sustain the gains

Although recent improvements in selected economic indicators offer grounds for cautious optimism, Ghana cannot afford to become complacent.

Economic stability must be supported by disciplined public spending, effective revenue mobilisation, productive investment and policies that encourage domestic production.

The government must also address the structural challenges that have repeatedly exposed the economy to external shocks.

These include dependence on commodity exports, limited industrial capacity, high production costs and the need to create sustainable employment opportunities for the growing population.

The ultimate measure of economic recovery should not be the performance of the cedi alone. It should also include the resilience of public finances, the competitiveness of local businesses, the availability of jobs and the ability of households to afford essential goods and services.

We may not yet be where we want to be, but verified improvements in the right direction deserve recognition. The task ahead is to protect those gains, address persistent weaknesses and ensure that economic recovery delivers tangible benefits to the population.

Ghana-China trade: Reducing dependence on the US dollar

I also welcome efforts to explore bilateral trade settlements between Ghana and China using their respective currencies, the Ghana cedi and the Chinese renminbi.

Under such arrangements, eligible transactions could be settled directly in the two countries' currencies rather than requiring every payment to pass through the US dollar.

This could potentially reduce certain conversion costs, facilitate bilateral trade and diversify the mechanisms available for international payments.

However, local-currency settlement is not a complete solution to Ghana's foreign-exchange challenges.

Its effectiveness would depend on the volume of trade covered, the availability of the currencies required, the management of exchange-rate risks and the terms agreed upon by participating financial institutions and businesses.

Ghana would also need to consider the balance between its imports and exports, as well as the practical uses of any foreign currency it receives.

The objective should not necessarily be to eliminate the US dollar from international trade but to reduce unnecessary dependence on a single currency where economically viable alternatives exist.

Ghana should therefore continue exploring mutually beneficial arrangements with China and other trading partners, provided that these arrangements are commercially sustainable and advance the country's broader economic interests.

Economic sovereignty and the Nkrumah vision

Kwame Nkrumah's warning about neocolonialism remains relevant to discussions about Africa's economic independence.

His argument was that political independence could be undermined when a country's economic system and policy choices remained excessively influenced or constrained by external forces.

For Ghana, economic sovereignty should mean building the domestic capacity to finance development, manage public finances responsibly, accumulate adequate reserves, produce competitively and engage international partners from a position of greater economic strength.

This does not require rejecting international cooperation. Rather, it calls for partnerships that advance national interests while strengthening the country's productive capacity and policy independence.

A stronger Ghanaian economy must be built on sound institutions, effective economic management, productive investment and policies that improve the welfare of its citizens.

The cedi's performance is an important part of that picture, but it is not the whole picture.

The ultimate question is whether Ghana can sustain macroeconomic stability, expand economic opportunities and translate improvements in the country's economic indicators into better living conditions for its people.

That is the standard against which the country's economic recovery should be judged.

As a judge of Ghana's economic performance, what would your verdict be?