Rewriting the Rulebook: Ghana’s Battle to Restore Currency Credibility
When Ghana’s central bankers mount the podium, the words they speak ripple far beyond financial circles, impacting traders in Makola, spare part dealers at Abossey Okai, CEOs in boardrooms, and families who are purchasing fuel at the gas pump. Today, the Bank of Ghana (BoG) finds itself in a delicate balancing act: ensuring that the cedi is stable while plugging the leaks that drain confidence from the financial system.
The cedi’s decline in the parallel markets has stirred fears of a currency crisis among the business community. Black market rates have often diverged sharply from official quotes, fuelled by the perception that Ghana has been running out of dollars recently. Yet, the story is more nuanced. Reserves are not exhausted. Cocoa exports continue, gold-for-reserves initiatives are active, and IMF support provides a cushion.
What is undermining stability, I understand as a financial journalist, to be the “leakages”: large cash withdrawals in foreign currency by some individuals and corporations; remittances being offshored; fake import documents used by some importers and logistics companies to claim dollars; and unregulated transactions, including crypto settlements. As was once said by the governor of the Bank of Ghana, Dr Johnson Asiama, the governor of the Bank of Ghana, once stated, “Speculators will not win. We are determined to make sure that orders and fundamentals prevail. Our vision is to see to it that the cedi will trade freely but within an orderly market.”
To respond to the deep-rooted challenges the Cedi has faced all these years, the BoG has rewritten parts of its FX rulebook, issuing a set of new measures designed to close all loopholes which are as follows:
- Corporates are no longer allowed to withdraw large amounts of foreign currency in cash. All such transactions must now be traceable through electronic transfers.
- Remittance companies must operate within a fair exchange rate range. “Ghanaians abroad must not lose value when sending money home. All inflows should support the local FX market, not offshore accounts,” Governor Asiama emphasized.
- Only licensed institutions can transact in foreign exchange. For residents, the invoicing currency must be the cedi unless specific approval is granted. This tackles creeping dollarisation.
- Travellers carrying more than $50,000 must now prove the source and purpose of the funds—closing a backdoor long used to siphon dollars out.
- Shipping and logistics companies must apply BoG-aligned rates, ending arbitrary surcharges that artificially increased FX demand.
In addition to these efforts, the BoG is targeting individuals who are using fraudulent Import Declaration Forms (IDFs) to transfer dollars to foreign accounts located outside the country. When you have off-the-record conversations with some CEOs and Financial Controllers of body corporates, they confess to trying to thwart the systems put in place by the Bank of Ghana.
I have had the opportunity to speak to industry players, and for businesses, these rules are both a relief and a burden. On one hand, they promise greater order and predictability. On the other hand, compliance costs are rising, and legitimate firms fear being lumped in with speculators. For households, the question remains simpler: will their wages hold value in the face of rising costs?
The IMF’s presence reassures creditors that Ghana is not improvising. The cedi is more than money. It is a national symbol. Every drop in its value is felt in the price of bread, fuel, and medicine. As Dr Johson Asiama, the Governor, has always reminded Ghanaians, “The cedi is our heritage and our pride. Respecting it is respecting ourselves.”
Although the parallel market is unofficial, it somewhat reflects public sentiment. When its rates diverge too far from official ones, confidence erodes. In financial markets, confidence plays a crucial role in ensuring the stability of a currency.
Ghana’s FX struggles mirror those across Africa. Frontier economies that liberalised their exchange rates are finding themselves vulnerable to shocks: swings in commodity prices, capital outflows, and geopolitics. With US interest rates still elevated, the dollar remains unforgiving to weaker currencies. Gold and cocoa can help, but they cannot match systemic capital flight.
Ghana’s path forward lies on three fronts. The first priority is to ensure institutional discipline by consistently enforcing rules. Rules mean little without follow-through. The second point I want to emphasise is that the Bank of Ghana should enhance foreign exchange (FX) markets by promoting wider participation in the interbank market and utilising digital platforms for retail transactions, thereby reducing dependence on the black market.
Finally, I want to bring back something the bank is already doing that must be continued, which is clear communication of all its acts, because my experience shows me that the markets punish silence more than bad news. Therefore, while I applaud the governor and his team, I re-emphasise that the BoG continues to speak openly and credibly on these FX issues, bringing even more clarity.
The cedi stands at a crossroads, but the steps taken by the Bank of Ghana point firmly toward the path of stability. By sealing loopholes, insisting on transparency, and reaffirming the centrality of the cedi in daily transactions, the BoG is sending a clear message that order will prevail over speculation. These measures are not simply short-term fixes; they are structural reforms aimed at safeguarding Ghana’s financial sovereignty for years to come.
If consistently enforced and communicated, the reforms will strengthen market confidence, narrow the gap between official and parallel rates, and ensure that foreign inflows truly serve the nation. In this sense, the actions of Governor Asiama and his team are not just defensive; they are forward-looking moves that can restore the cedi’s credibility and anchor Ghana’s long-term economic stability. Instead of being viewed as restrictive measures, they should be considered the pivotal moment that is guaranteeing the future of the cedi and reaffirming Ghana’s status as a disciplined, resilient frontier economy.
