Cedi Appreciation Triggers 50% Drop in Remittance Inflows
The recent sharp appreciation of the Ghanaian cedi has led to a near 50% decline in remittance inflows, according to the Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama.
Addressing participants at the official launch of the Bank of Ghana Chair in Finance and Economics at the University of Ghana, Dr. Asiama disclosed that many Ghanaians in the diaspora have halted money transfers for local projects due to shifting perceptions about currency value and purchasing power.
“The appreciation of the cedi so far, Ghanaians are interpreting this differently, and it is part of the problem. People who used to send remittances for projects have suddenly stopped, and so we have observed a near 50% decline in remittance inflows,” Dr. Asiama stated.
His comments come on the back of a strong rally by the local currency in recent months, buoyed by sustained macroeconomic stability, declining inflation, and improved external reserves. The cedi has appreciated by over 40% against the US dollar, 31% against the British pound, and 24% against the euro so far this year.
Changing Behaviour Amid Currency Gains
While acknowledging that the appreciation reflects improved investor confidence and economic recovery, Dr. Asiama warned that the unintended impact on remittance behaviour could have broader implications for household incomes and project financing.
“Someone told me this morning that we need to do a roadshow across the top remittance-originating countries, saying that we need to go and explain to them to continue sending their monies regardless of where the exchange rate is,” he added.
He also highlighted the need for downward adjustments in domestic prices, particularly building materials such as cement, in line with the easing of inflation to maintain the value proposition of remittances.
“If you are doing projects in Ghana, cement prices must also adjust, not so? Inflation is coming down so the prices of those building materials must also adjust,” he remarked.
Remittance inflows are a critical source of foreign exchange and a key contributor to household income for many families in Ghana. A significant dip in inflows could affect not only individual consumption and investment but also fiscal and external sector stability.
With inflation on a downward path—recorded at 12.1% in July 2025—and investor confidence gradually improving, policymakers now face the added task of managing expectations both at home and abroad to sustain capital inflows and remittances.
