In what appears to be another tough blow to the Ghanaian economy, the US dollar has once again surged against the Ghana cedi, causing widespread concern among citizens, traders, and financial analysts.
The rapid depreciation of the cedi is already affecting prices of goods and services, with importers bearing the brunt and passing costs down to the average consumer.
As of this week, the exchange rate in many forex bureaus across Accra is hitting above GH₵15 to $1, with some even reporting higher figures depending on the location and time of day. The Bank of Ghana’s interbank rate, though slightly lower, shows no signs of bringing relief anytime soon.
What Is Causing the Fall?
Economists point to several factors behind the cedi’s decline, including:
High Demand for Dollars: As businesses import goods and investors seek safer foreign currencies, demand for the dollar has skyrocketed.
Low Investor Confidence: Uncertainty surrounding economic policies and Ghana’s debt situation has pushed investors away from holding the cedi.
Global Economic Pressures: The strengthening of the US dollar globally, amid interest rate hikes by the US Federal Reserve, is also compounding the situation.
Impact on Ordinary Ghanaians
The effects of the cedi’s fall are being felt across all sectors:
Rising Cost of Living: Basic commodities, fuel, and transportation fares have all gone up. Importers are adjusting prices daily due to exchange rate volatility.
School Fees and Rent: Families with children in international schools or paying rent pegged in dollars are feeling the pinch more than ever.
Increased Unemployment Risk: Small businesses that rely on imported materials are struggling to stay afloat, threatening jobs in the informal sector
Kwame Yeboah, a spare parts dealer in Abossey Okai, lamented, “Last month, I bought my goods at GH₵13.5 per dollar. Today, it’s over GH₵15. How are we expected to survive?”
Government’s Response
The Ministry of Finance and the Bank of Ghana have assured Ghanaians that they are working on stabilizing the currency. Recent interventions, such as injecting more dollars into the system and tightening monetary policy, have yet to yield significant results.
In addition, some analysts suggest that long-term stability will require:
Boosting local production to reduce imports
Increasing exports to earn foreign exchange
Strengthening fiscal discipline and reducing national debt
The Way Forward
Until the cedi finds some level of stability, Ghanaians may need to brace themselves for further economic strain. Experts advise businesses and households to adopt cost-saving measures and consider ways of earning foreign income where possible.
For now, all eyes are on the government and central bank to act decisively before the cedi slips even further into economic danger zones.
Stay tuned.e
