- Cedi Leads Regional Currency Losses Despite Improving Macro Indicators
Ghana’s cedi is said to have become the worst-performing currency in sub-Saharan Africa in the month of April and May, underscoring renewed pressure on the country’s foreign exchange market despite improving inflation, tighter fiscal management and broader signs of macroeconomic stabilisation.
The local currency has depreciated by more than 10 per cent against the US dollar since the beginning of 2026, according to market analysis published by Reuters using data from the London Stock Exchange Group, making it one of the weakest-performing currencies in West Africa and one of the poorest performers on the continent.
By the close of trading last week, the cedi had weakened further to about GH¢11.61 to the dollar, extending a steady decline that traders attribute largely to sustained corporate demand for foreign exchange.
Reports suggest that the cedi “is on a depreciating path due to persistent FX demand,” with market participants expecting the pressure to continue in the near term as companies step up dollar purchases to meet import obligations and offshore payment commitments.
The currency’s slide comes at a politically and economically sensitive moment for Ghana. Headline inflation has declined significantly from crisis-era levels, fiscal consolidation has improved under the International Monetary Fund-backed recovery programme, and investor confidence has shown signs of recovery following the country’s debt restructuring.
Yet the cedi’s weakness points to an uncomfortable reality: macroeconomic stabilisation has not fully resolved the structural foreign exchange imbalance at the heart of Ghana’s economy.
Market watchers say strong dollar demand from energy-related firms, importers and other corporates continues to outweigh available foreign exchange liquidity. Businesses operating in import-dependent sectors are increasingly sourcing dollars at rates above official market quotations, raising operational costs and creating fresh pressure on domestic prices.
The depreciation has also revived concerns about imported inflation. Fuel, pharmaceuticals, industrial inputs, machinery, food imports and consumer goods remain vulnerable to exchange rate movements, meaning further cedi weakness could eventually feed into transport costs, production expenses and retail prices.
That risk could complicate the Bank of Ghana’s monetary policy path. The central bank has begun easing policy after a sharp fall in inflation, but renewed currency pressure may force policymakers to move more cautiously, especially if depreciation begins to affect inflation expectations.
The cedi’s performance also highlights the limits of short-term stabilisation tools. Central bank intervention may help moderate volatility, but economists argue that durable exchange rate stability will depend on deeper reforms: stronger export earnings, more reliable foreign direct investment, higher reserve buffers, improved domestic production and reduced dependence on imported goods.
The latest data places the cedi ahead of several troubled African currencies in terms of losses recorded this year so far, with only a handful of currencies, including the Libyan dinar, posting steeper declines against the dollar.
For businesses, the immediate concern is predictability. A weakening currency increases the cost of planning, pricing and inventory management, particularly for firms with foreign-currency liabilities or import-heavy supply chains. Even when inflation is falling, exchange rate weakness can show up later in fuel prices, transport fares, food distribution costs and imported consumer goods.
Ghana’s policymakers therefore face a delicate balancing act. They must preserve the gains made on inflation and fiscal consolidation while addressing the foreign exchange pressures that continue to test confidence in the recovery.
The cedi’s fall does not necessarily erase Ghana’s recent macroeconomic progress. But it does expose how fragile that progress remains when the economy’s demand for dollars continues to outstrip its capacity to generate them.
