The recent weakening of the Ghana Cedi against major international currencies is a “normal correction” following an “aggressive” appreciation earlier in the year, economist Professor Godfred Bokpin has said.
The Professor of Finance at the University of Ghana Business School further allayed fears, assuring that there was no cause for alarm during an interview on Joy FM’s Super Morning Show today, September 16.
Prof. Bokpin stated that the situation is “not out of control” and there is no need to panic.
He explained that the Cedi’s rapid gains in the first half of the year had “jumped the gun” and gone “far ahead of the recovery.”
He noted that such a swift appreciation, disconnected from broader structural transformation in the economy’s real sector, was bound to lead to a correction.
He pointed out that the Cedi’s performance in the first half of 2025 was unprecedented.
For instance, by the end of June 2025, the Cedi had appreciated by an astonishing 42.6% against the US Dollar, 30.3% against the British Pound, and 25.6% against the Euro.
This marked a significant reversal from the same period in 2024, where the Cedi had depreciated by 18.6%, 17.9%, and 16.0% respectively.
Prof. Bokpin’s analysis comes amid positive, though nuanced, economic indicators.
Provisional data from the Ghana Statistical Service shows that the Ghanaian economy grew by 6.3% in the second quarter of 2025, a notable increase from the 5.7% recorded in the same period last year.
On the inflation front, the country has seen a remarkable decline.
Prof. Bokpin highlighted the “sharp deceleration” of inflation from a high of 23.8% at the end of December 2024 to 11.5% by the end of August 2025.
This marks the eighth consecutive month of decline and is the lowest inflation rate recorded since October 2021.
The growth, he explained, is “broadening” and not limited to a few sectors.
However, he cautioned that this growth is still coming from a “state of low productivity” and is not yet driving a “structural transformation.”
He acknowledged the Information and Communication Technology (ICT) sector as the main contributor to the second-quarter growth, expanding by a robust 21.3%.
He noted that the speed of this disinflationary trend in 2025 is a testament to the effectiveness of government strategies, particularly on the fiscal side.
According to Prof. Bokpin, the Cedi’s aggressive appreciation had fuelled speculative activity, which is now being corrected.
He noted that the Bank of Ghana has been “stepping strongly” to ensure the currency’s stability.
He concluded by reiterating his view that the Cedi will eventually stabilise as the government continues to build on the platform of fiscal stability and strong disinflation.
The current situation, he emphasised, is a natural consequence of market dynamics rather than a sign of a failing economy.
SOURCE: Myjoyonline
