Ghana’s economy opened 2025 with a tentative sigh of relief as the embattled cedi showed signs of modest stabilization, though structural challenges continue to test households, businesses, and policymakers.
Fresh data from the Bank of Ghana (BoG) revealed the cedi’s average depreciation against major currencies slowed to 2.06% in January, a stark contrast to December 2024’s turbulence, when it plummeted by 19.2% against the dollar, 17.8% against the pound, and 13.7% against the euro. While the calmer exchange rates signal cautious progress, analysts warn the reprieve remains fragile, with the cedi still shedding 2.4% against the dollar, 0.8% against the pound, and 3% against the euro last month.
Debt and Deficits Loom Over Government
The government, saddled with external debts constituting 56% of its total GH₵72 billion deficit, faces relentless pressure. December’s currency crash inflated debt servicing costs to GH₵40 billion ($3.4 billion), diverting funds from critical sectors like healthcare and education. Import-dependent projects, from hospital equipment to energy infrastructure, now bear inflated price tags, complicating fiscal planning. “Every dip in the cedi tightens the vise on public spending,” noted Accra-based economist Nana Asante. “Prioritization becomes a survival tactic.”
Corporate Sector Feels the Squeeze
Major industries reliant on imports, including manufacturing and energy, grapple with soaring input costs. Unilever Ghana reported a 14% spike in raw material expenses last quarter, while TotalEnergies warned of a 9% fuel price hike by February. Banks, too, are feeling the strain: 37% of non-performing loans stem from businesses buckling under forex volatility, according to BoG data. Meanwhile, foreign investors—despite Ghana attracting $1.3 billion in FDI last year—remain wary. “Currency instability is a red flag,” admitted venture capitalist Esi Coleman. “Profits can vanish overnight.”
SMEs and Households Bear the Brunt
For small businesses and families, the cedi’s swings translate into daily struggles. Kofi Mensah, an agro-processor in Kumasi, saw profits shrink by 11% as machinery imports grew costlier. SMEs, which employ 70% of Ghanaians, reported a 7% rise in operational costs year-on-year, threatening growth in a sector accounting for 92% of registered firms. Consumers, meanwhile, face relentless inflation: food prices pushed December’s rate to 40.1%, with a bag of maize soaring from GH₵300 to GH₵430 in a year. Transport fares jumped 18% in January alone, squeezing budgets as wages stagnate. “We’re working harder to afford less,” said teacher Abena Asare, echoing frustrations among public sector workers.
Glimmers of Resilience
Amid the headwinds, strategic reforms offer flickers of optimism. Cocoa and gold exports surged to 2.1 billion 5.2 billion respectively in 2024, while oil and gas gains position Ghana to leverage AfCFTA’s intra-African trade potential. The BoG’s aggressive forex interventions—including a $200 million January injection—have tempered volatility, though critics argue long-term stability requires deeper reforms. “Diversification and prudent policies are non-negotiable,” asserted Finance Minister Ken Ofori-Atta during a recent forum.
A Delicate Balancing Act
While January’s calmer forex market offers respite, Ghana’s economic crossroads demand bold action. The government’s ability to curb debt, spur exports, and protect vulnerable sectors will shape recovery prospects. For citizens and businesses, adaptability remains key. As Mensah put it, “Survival means innovating daily.” With inflation still biting and global uncertainties lingering, Ghana’s path to stability hinges on bridging short-term fixes with visionary economic stewardship—a challenge as steep as it is urgent.
