By Kofi Busia KYEI
By 2025, the worldwide economic scene is witnessing substantial changes with the U.S. dollar (USD) facing one of its steepest downturns in many years. This period marks roughly a 9% decline from the previous year, making it the worst beginning for the currency since 1989.
This devaluation, spurred by a deceleration of the U.S. economy, policy uncertainties, and central banks’ shift towards diversifying holdings away from the dollar, offers a distinct chance for developing nations. Ghana stands out as an example, using targeted strategies to bolster both its currency and overall economy.
Drivers of Dollar Weakness
The depreciation of the U.S. dollar stems from multiple interlinked causes. In the first quarter of 2025, the country saw its Gross Domestic Product expand at a modest rate of only 1.8%, indicating decreased business operations. At the same time, discussions about America’s participation in international bodies such as the IMF along with stringent commercial regulations have generated doubt, which has diminished investors’ trust even more.
Banks across the globe have hastened their initiatives to broaden their reserve assets, resulting in a significant rise in gold acquisitions. Ghana has been instrumental in this shift. As of March 2025, the Bank of Ghana saw its gold reserves multiply threefold within just twenty-four months, totaling 31.01 metric tons.
Ghana’s economic playbook
Ghana has distinguished itself through its forward-thinking economic strategies within an unstable global landscape. A key factor in this success has been the government’s initiatives for managing public debt more effectively. Following these restructuring measures, Ghana experienced a decline in Eurobond yields. Furthermore, in October 2024, Fitch Ratings raised Ghana’s credit rating to ‘CCC+’, reflecting enhanced confidence among investors.
The IMF’s assistance has played a crucial role in steadying the nation’s finances. The $3 billion Extended Credit Facility agreed upon in 2023 has supported budgetary changes, which brought down inflation from an impressive 45% in 2023 to 22.4% by March 2025. Additionally, foreign reserves increased to $8.98 billion, enough to cover four months of import needs.
The governmental industrial strategy, led by the One District, One Factory (1D1F) scheme, has considerably enhanced local manufacturing. Since being launched, this initiative has generated more than 150,000 employment opportunities, highlighting the effectiveness of focused economic measures.
The Cedi’s Performance
In 2025, the Ghanaian cedi has become one of the top performers among global currencies, with an appreciation of 6.1% against the U.S. dollar just in April, shifting from an exchange rate of 15.31 GHS/USD to 14.38 GHS/USD. In the last half-year period, the currency has strengthened by 10%, indicating a general improvement in underlying economic conditions.
The rally has been fueled by strong remittance flows, which saw an 18% increase in Q1 2025 to hit $4.7 billion. Moreover, elevated gold prices along with greater export revenues have improved Ghana’s balance of payments, providing additional support for the cedi.
Investor Appeal
Ghana’s improving economic stability has enhanced its attractiveness to investors. The Bank of Ghana’s monetary policies have maintained treasury yields at competitive levels with inflation rate of 22.4%.
The agricultural sector remains a cornerstone of the economy, with cocoa exports projected to rise significantly in the 2024/2025 season. Meanwhile, the fintech sector is experiencing remarkable growth. These trends signal diversification and resilience within Ghana’s economy.
Persistent Challenges and Opportunities
Despite these achievements, Ghana still faces several hurdles. Imports constitute approximately 40% of GDP, leaving the economy vulnerable to global price fluctuations. Inflation, though reduced, remains above the Bank of Ghana’s target range of 6-10%, with food inflation at 26.5% and non-food inflation at 18.7% in March 2025.
To sustain its growth trajectory, Ghana must continue to prioritize export diversification and reserve accumulation. Cocoa and gold exports remain vital, but investment in other high-potential sectors, such as technology and renewable energy, could drive long-term growth.
Lessons for Emerging Markets
Ghana’s response to the weakening dollar offers valuable lessons for other emerging markets. By leveraging its natural resource endowments, embracing fiscal reforms, and fostering investor-friendly policies, the country has turned a global challenge into an economic opportunity.
As the financial world grows increasingly multipolar, Ghana’s journey underscores a key truth: with strategic vision and effective execution, emerging markets can thrive amid uncertainty.
About the Author
Kofi is a seasoned finance specialist with deep expertise in investments, wealth management, and overseeing pension funds, along with strong strategic leadership skills. Recognized for his use of cutting-edge technology such as AI, Kofi is also a prolific author focused on providing groundbreaking innovations within the financial sector. Currently, he acts as a Pension Fund Manager at Merban Capital and holds an executive position with the Young Investors Network.
Disclaimer
:
The opinions stated in this piece belong solely to the writer and do not necessarily reflect the stances of associated groups. The information provided relies exclusively on openly accessible resources as of the publishing date.
Sources include: The Bank of Ghana, reports from the International Monetary Fund (IMF), evaluations from Fitch Ratings, data from the Ghana Statistical Service, and information from Citi Newsroom.
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