An Associate Professor of Finance at Andrews University in Michigan, USA, Professor Williams Peprah, is calling for cautiousness with regard to the sustainability of the Ghana cedi against the US dollar and other major foreign currencies in the medium to long term.

According to him, it is too early to celebrate the sustainability of the local currency, arguing, the nation will have to wait until the International Monetary Fund (IMF) programme has ended before knowing the real performance of the cedi.

“If you ask me whether this is sustainable, I’ll put it as a mix. First, we know we are under an IMF programme, and because we are meeting all the set targets, some inflows are coming in, which have helped our balance of payments. The government has also benefited from a lot of trade activities, especially exports. One major trade activity that has really improved is gold, and cocoa has also brought in significant inflows”.

“Remember, these two commodities are seasonal and cyclical in nature; their prices can go up or down. At the moment, the prices of cocoa and gold have gone up. The government has also continued the gold-for-reserves and gold-for-oil programme initiated by the previous government, which is having a positive impact”, Professor Peprah explained.

“However, it is too early to say this is sustainable. We need to wait and see what happens when the IMF programme ends, and whether the government remains disciplined, possibly into 2026 and 2027. Sustainability is a long-term assessment”, he added.

Investor Confidence

On the other hand, Professor Peprah said investors have now reposed confidence in the Ghanaian economy, highlighting that investor confidence is very high. “Most investors are now confident that if they invest in Ghana, such as in the bond market, and want to repatriate their funds, the government will have enough foreign exchange to support that”.

For manufacturers and other investors, Professor Peprah said the positive signals are clear, pointing out that “it has become easier for manufacturers, miners, and service providers to access forex to support their operations, including importing raw materials”.

“This has boosted confidence in the economy. This is why many investors are now looking at Ghana, hoping the government will continue focusing on strategies that ensure sufficient forex availability”, he concluded.