Is Cedi Stability Sustainable? Experts Urge Caution Until IMF Programme Ends

Published on January 7, 2026

Introduction

The Ghanaian cedi has proven indicators of balance in opposition to america buck and different primary currencies in contemporary months. However, professionals are urging warning sooner than stating this development sustainable. Williams Peprah, an Associate Professor of Finance at Andrews University in Michigan, USA, emphasizes that the present balance could also be brief and connected to the continuing International Monetary Fund (IMF) programme. This article explores the standards influencing the cedi’s efficiency, knowledgeable research, and sensible recommendation for companies and buyers.

Key Points

Background

Ghana’s Economic Context

Ghana has confronted vital financial demanding situations in recent times, together with top inflation, forex depreciation, and a big fiscal deficit. In reaction, the federal government entered into an Extended Credit Facility (ECF) association with the IMF in 2023. This programme goals to revive macroeconomic balance, rebuild global reserves, and create prerequisites for upper venture capital and activity advent.

The Role of the IMF Programme

The IMF programme has introduced a number of advantages to Ghana’s market system:

• Financial inflows: Disbursements from the IMF and different multilateral establishments have stepped forward the stability of bills.
• Policy self-discipline: The programme calls for the federal government to enforce fiscal and fiscal insurance policies that advertise balance.
• Market self belief: IMF fortify indicators to global markets that Ghana is dedicated to sound financial insurance policies.

Analysis

Factors Supporting Current Stability

Professor Peprah identifies a number of elements contributing to the cedi’s contemporary balance:

• IMF inflows: Regular disbursements have larger foreign currency reserves.
• Strong commodity exports: High costs for gold and cocoa have boosted export market.
• Gold-for-reserves programme: This initiative has equipped further foreign currency.
• Improved corporation stability: Export venture capital has lowered the present account deficit.

Risks to Sustainability

Despite those sure elements, a number of dangers may just undermine the cedi’s balance:

• Commodity value volatility: Gold and cocoa costs are matter to cross-border field fluctuations.
• Seasonal elements: Export revenues from agriculture are seasonal and might decline.
• Policy self-discipline: Maintaining fiscal and fiscal self-discipline after the IMF programme ends is unsure.
• External shocks: Global financial prerequisites, comparable to adjustments in US rates of interest, can have an effect on business model flows.
• Political balance: Elections and coverage adjustments may just affect financial financial backing.

Investor Confidence

Professor Peprah notes that investor self belief has stepped forward considerably. Investors now imagine that:

• The executive has enough foreign currency to satisfy responsibilities.
• They can repatriate price range from investments in Ghana with out primary difficulties.
• Businesses can get admission to foreign exchange for uploading uncooked fabrics and working prices.

Practical Advice

For Businesses

Businesses working in or with Ghana will have to imagine the next:

• Hedging methods: Use monetary tools to offer protection to in opposition to forex fluctuations.
• Diversification: Reduce reliance on unmarried markets or commodities.
• Cost financial backing: Maintain environment friendly operations to resist doable financial volatility.
• Monitoring: Keep abreast of coverage adjustments and financial signs.

For Investors

Investors will have to:

• Assess long-term possibilities: Evaluate the sustainability of financial insurance policies past the IMF programme.
• Consider forex possibility: Factor doable cedi depreciation into accomplishment choices.
• Diversify portfolios: Spread investments throughout other sectors and areas.
• Stay knowledgeable: Follow financial information and knowledgeable research from credible assets.

For Policymakers

To make certain sustainable cedi balance, policymakers will have to:

• Maintain fiscal self-discipline: Avoid over the top borrowing and spending.
• Support export diversification: Reduce dependence on a couple of commodities.
• Improve the business creation: Attract international direct accomplishment.
• Build reserves: Accumulate foreign currency buffers right through excellent instances.
• Enhance transparency: Communicate financial insurance policies obviously to markets.

FAQ

Conclusion

The contemporary balance of the Ghana cedi is a favorable accomplishment, however it’s untimely to claim it sustainable. The present scenario is in large part supported by means of brief elements comparable to IMF inflows and top commodity costs. Long-term balance is determined by the federal government’s talent to deal with sound financial insurance policies, diversify the market system, and construct resilience in opposition to exterior shocks. Businesses and buyers will have to stay vigilant, use possibility financial backing methods, and keep knowledgeable about financial movements. Only time will inform whether or not the cedi can deal with its energy past the IMF programme.