In recent months, the Ghanaian Cedi has experienced a period of relative stability, sparking a heated debate about which administration can truly claim credit for this economic respite. From bustling market stalls to the halls of Parliament, the value of the Cedi against major currencies has become a focal point. At the heart of this discussion is a claim made by Dr. Mohammed Amin Adam, a prominent member of the Minority in Parliament, who asserts that the seeds of this Cedi stability were sown during the tenure of the previous NPP government. He references President Mahama’s own acknowledgment of the impact of foreign reserves on currency strength.
This article delves into the arguments surrounding the current Cedi stability. We will analyze the evidence supporting the claim that the NPP’s policies laid the groundwork for the present economic conditions. We will also critically examine the current NDC administration’s economic strategies and their effectiveness in maintaining and building upon any inherited stability.
Dr. Amin Adam’s argument centers on the assertion that the NPP administration established a robust macroeconomic foundation, which continues to benefit the nation. A key component of this foundation, according to Dr. Adam, is the level of foreign reserves inherited by the current government. He references President Mahama’s admission of a link between the Cedi’s appreciation and the availability of $10.6 billion in foreign reserves.
The Minority argues that the NPP government contributed significantly to these reserves. Dr. Adam stated, “A substantial $8.98 billion of the reserves were inherited from the NPP government.” Foreign reserves play a crucial role in stabilizing a currency. They provide a buffer against external shocks and demonstrate a country’s ability to meet its international obligations. When a nation has ample foreign reserves, it signals to investors and international markets that it can manage its currency effectively, thereby reducing speculative attacks and promoting stability. The availability of these reserves allows the central bank to intervene in the foreign exchange market, buying or selling currency to manage fluctuations and maintain a desired exchange rate.
Another policy initiative highlighted by the NPP is the Gold for Forex program, also known as GoldBod, viewing it as a continuation of strategies initiated under the leadership of Dr. Bawumia. This program aims to leverage Ghana’s gold reserves to provide further Cedi stability by directly exchanging gold for foreign currency, reducing reliance on traditional foreign exchange markets and mitigating the impact of external economic pressures.
Furthermore, the NPP points to its efforts to increase Ghana’s gold reserves, from 8.78 tonnes in May 2023 to 30.53 tonnes by December 2024, as a crucial factor anchoring the currency. Increased gold reserves enhance a nation’s financial credibility and provide a tangible asset backing its currency. This can boost investor confidence and contribute to long-term economic stability.
However, the NDC’s performance is now under scrutiny, particularly regarding reserve building and gold accumulation. The Minority argues that the current administration has underperformed in these critical areas. Since January 2025, they claim, less than 1 metric ton has been added to gold reserves, and only about $1.6 billion has been added to forex reserves. This is contrasted unfavorably with the NPP’s performance during their time in office. This perceived shortfall raises questions about the current government’s commitment to strengthening the country’s financial position and ensuring long-term Cedi stability.
Adding to the concerns, Dr. Amin Adam has called for greater transparency and accountability from the Bank of Ghana and Goldbod, questioning the possibility of off-balance-sheet forex operations. Such operations, if not properly managed and disclosed, could undermine the credibility of the central bank and create uncertainty in the market.
Despite the recent appreciation of the Cedi, inflation remains stubbornly high at 21%. This suggests that deeper structural issues are at play, extending beyond mere exchange rate improvements. While a stable Cedi can help to curb imported inflation, it does not address underlying problems such as supply chain bottlenecks, fiscal imbalances, or excessive government spending.
Macroeconomic discipline must be matched with transparency and reform—not rhetoric.
Experts argue that achieving sustainable economic stability requires a comprehensive approach that tackles these root causes. Factors contributing to persistent inflation include high import costs, increased energy prices, and supply-side constraints.
Ghana’s economy is also influenced by the broader global economic climate. Fluctuations in commodity prices, changes in global interest rates, and geopolitical events can all have a significant impact on the Cedi and the country’s overall economic performance. These external factors can either amplify or offset the effects of domestic policies, making it crucial for policymakers to adopt a flexible and adaptive approach.
Looking ahead, Dr. Amin Adam emphasizes the need to sustain the gains made in Cedi stability through prudent policies and institutional continuity. He stresses the importance of building strong institutions, promoting good governance, and implementing sound macroeconomic policies to ensure that Ghana’s economic progress is sustainable and inclusive.
In conclusion, the debate surrounding the Cedi stability highlights the complex interplay of past policies, current strategies, and external factors. The NPP claims credit for laying the foundation for the current stability, while the NDC faces scrutiny for its reserve-building efforts and its struggle to curb inflation. Ultimately, achieving sustainable economic growth requires a commitment to transparency, accountability, and prudent policies. Macroeconomic discipline must be matched with transparency and reform to solidify recent improvements in Cedi stability.
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