Can the Ghanaian Cedi Anchor a New West African Currency Bloc?
As dissatisfaction grows with colonial-era institutions and political realignments reshape West Africa, Ghana may be well-positioned to consider a bold, if unconventional, economic proposition: anchoring a new regional currency bloc based on the Ghanaian cedi.
The idea is radical, but not without historical precedent or strategic logic. Ghana, Guinea and Mali once sought a political and economic union in the 1960s under the visionary leadership of Kwame Nkrumah, Ahmed Sékou Touré, and Modibo Keïta. That effort failed—but the impulse toward regional autonomy and integration endures. Today, amid new geopolitical fissures, the conditions for revisiting such an ambition may be re-emerging.
At the heart of the proposal is a partnership between Ghana and the military-led states of Mali, Burkina Faso, Niger and Guinea—all of whom have expressed a desire to leave the CFA franc, the euro-pegged currency zone backed by France. The cedi-based alternative would offer these countries monetary sovereignty, while potentially transforming Ghana into a linchpin of regional trade, logistics, and finance.
Strategic Logic and Economic Incentives
Ghana brings to the table institutional stability, a functioning democracy, an independent central bank, and a track record—albeit imperfect—of managing its own currency. Its coastal geography provides landlocked partners with access to global markets through modern port infrastructure in Tema and Takoradi. Leveraging these advantages could unlock cross-border value chains in mineral exports, agricultural commodities, and manufacturing.
The economic case for a cedi-based zone includes lower transaction costs, harmonised trade settlements, and greater control over fiscal and monetary tools currently constrained under the CFA regime. Ghana, in turn, would benefit from expanded market access, economies of scale, and increased geopolitical influence across Francophone West Africa.
Political Headwinds and Economic Risks
Still, the challenges are considerable. Ghana risks reputational damage by partnering with regimes under sanctions or embroiled in insurgencies. The macroeconomic divergence between Ghana and its Sahelian counterparts, particularly regarding inflation, debt, and fiscal governance, would complicate monetary coordination. ECOWAS, with Nigeria as its gravitational centre, may interpret any alternative bloc as a threat to regional cohesion, especially given the ongoing suspension of the Sahelian states from the organisation.
A full currency union, therefore, may be premature. But a phased approach—anchored in realism and adaptive diplomacy—could lay the groundwork for deeper integration.
Unorthodox Levers: Informal Cedi Adoption
One avenue worth exploring is the informal and market-led adoption of the cedi in cross-border trade and commercial activity. This approach would avoid the diplomatic sensitivities of a formal currency union, while gradually expanding the cedi’s regional footprint. Ghana could encourage this shift through several unorthodox but potentially effective measures:
First, Ghanaian institutions could facilitate the use of the cedi in key regional markets through bilateral agreements with major wholesalers and traders in the Sahel. By providing preferential terms for cedi-based transactions—such as access to lines of credit or discounts on Ghanaian exports—Ghana could incentivise organic demand for its currency.
Second, the Bank of Ghana could explore the deployment of mobile money and e-Cedi platforms that support cross-border trade settlements, particularly in commodities like livestock, grain, and shea butter, which flow naturally between Ghana and its northern neighbours. If properly regulated and interoperable, such platforms could create a digital ecosystem for informal but structured monetary convergence.
Third, Ghana could support the establishment of border-area trade facilitation zones where the cedi is the dominant currency of exchange. These zones—backed by infrastructure, customs integration, and financial services—could serve as experimental nodes for future monetary alignment.
The upside of these strategies is clear: gradual adoption avoids the immediate costs and political backlash of full-scale monetary union, while allowing Ghana to test and refine its institutional and technological readiness. It would also empower traders and firms to choose the most efficient medium of exchange, creating bottom-up momentum for regional integration.
However, risks must be acknowledged. Informalisation of currency use can lead to regulatory blind spots, raise concerns about capital flight, and complicate monetary policy transmission. Ghana would need to invest in financial oversight and anti-money laundering systems to mitigate these dangers. Moreover, success would depend on strong governance and consistent macroeconomic discipline—any erosion of confidence in the cedi could derail the experiment.
Toward a Phased, Pragmatic Integration
Rather than rush into monetary union, Ghana could champion a ThirdWay strategy: modular, market-driven integration rooted in trade, payments infrastructure, and shared economic interests. This would include piloting cedi-based trade settlements, investing in AfCFTA-compatible corridors, and scaling digital financial infrastructure for interoperability.
In time, as fiscal convergence and political alignment improve, this foundation could evolve into a more formal monetary framework. And in doing so, Ghana would offer not only an alternative to the CFA franc, but a model of regionalism anchored in consent, capacity, and mutual benefit.
Currency as Diplomacy
In an era where the boundaries of integration are being redefined, a cedi-centred currency bloc may appear improbable—but not impossible. What it demands is not naïve idealism, but strategic patience, bold diplomacy, and smart experimentation.
For Ghana, this would be more than an economic venture. It would be a statement of intent: that Pan-African cooperation is not the preserve of history, but the unfinished work of the present.
[7/24/25, 10:36:51] Xorse Godzi: Interesting and thought provoking piece Sir. Thanks.
Monetary sovereignty imposes fiscal responsibilities and obligations in order to be credible. We also need a sustained period, potentially decades, of credibility and stability for the cedi to be able to assume such a role. For me transparency of financial systems and reducing corruption and illicit flows need to be tackled.
[7/24/25, 07:28:06] Martin Kpebu: Good to read about this idea 💡 again. I’m always in support of anything that leads to less dependency on the dollar so why not. I thought that was what we were planning towards under the ECO. Sad I’ve not heard about it again in the last 4 years or so.
The phased approach you advocate is pragmatic and commendable
[7/24/25, 06:35:06] Frank Adu jr.: Interesting. Bold and forward looking. Indeed in parts of Lagos and Abuja the cedi is accepted as a medium of exchange.