Cedi records longest depreciation streak in history, impacting businesses
The cedi is experiencing a historic weakening, having not gained against the U.S. dollar in the past 22 trading sessions, a record streak according to Bloomberg data dating back to 1994.
As of May 16, the cedi had weakened by 0.3% to GHS 13.9310 per dollar in London trading. Over the year, the cedi has slumped by 14%, a decline outpaced only by devalued currencies such as the Egyptian pound and the Nigerian naira.
Several factors are contributing to the cedi’s slide. A significant decrease in cocoa earnings—down nearly a third to $508 million in the first two months of the year due to adverse weather, disease, and fertilizer shortages—has severely impacted the economy.
Furthermore, despite a temporary current account surplus in 2023, Ghana’s persistent historical current account deficit has resurfaced, posing additional challenges to the cedi’s stability.
Forecasts indicate that the cedi will continue to weaken, with forward calculations predicting it could hit a record low of GHS per dollar by the third quarter of the year and end the year at approximately GHS 15.98 per dollar.
The sharp decline of the Ghanaian cedi against major trading currencies is causing significant concern among businesses in Ghana.
According to Dr. Mark Badu-Aboagye, the Chief Executive Officer of the Chamber of Commerce, the current economic climate is particularly challenging due to the cedi’s depreciation and the resulting high operating costs for businesses.
“This is not a good time for businesses at all, the rate of depreciation of the cedi and high cost of operating are troubling,” he quipped.
