Ghana’s recent macroeconomic figures paint a picture of recovery. Inflation is slowing, the cedi has shown signs of stability, and major economic indicators are moving in a positive direction. On paper, the economy appears to be strengthening. But for the average Ghanaian, the daily cost of living tells a different story. Prices of some commodities remain high, wages lag behind, and many citizens struggle to feel the benefits of these improvements. This gap between national statistics and household reality highlights both the hail and the hurt of Ghana’s strong currency and stabilizing macroeconomy.
A firm cedi brings clear advantages. It is supposed to lower the cost of imported fuel, medicines, machinery, fertilizers, and processed foods, which Ghana relies on heavily. For businesses, this means reduced production costs and more predictable expenses, while consumers benefit from slower inflation and a degree of price stability after years of volatility. These improvements also boost investor confidence, making Ghana a more attractive environment for investment, and cheaper imports can help preserve international reserves as the government and banks spend less foreign currency on essential goods.
However, the strong cedi also creates challenges. Ghana’s major exports, including cocoa, gold, oil, and cashew, earn revenue in US dollars. When the cedi strengthens, exporters receive fewer cedis per dollar, reducing income, squeezing profit margins, and sometimes discouraging production. This has contributed to falling revenues from key export commodities. Cocoa earnings have declined despite stable global prices, oil revenue has dropped due to weaker dollar conversion and fluctuating production, and gold exports, while still significant, have not translated into proportional gains in cedis. Reduced export earnings limit the government’s capacity to fund development projects and affect jobs in rural and mining communities.
The strong cedi also impacts remittances from abroad, which are vital for both households and government finances. Family members working overseas send money home, but when the cedi strengthens, each dollar, euro, or pound converts into fewer cedis. Households receive less purchasing power, limiting spending and cushioning against high prices. For the government, the reduced local-currency value of remittances can affect foreign reserves, fiscal planning, and indirectly, tax revenue, as lower household and business spending reduces economic activity. Meanwhile, cheaper imports can widen the trade deficit if Ghana continues to buy more from abroad than it sells, which can eventually put pressure back on the currency.
Even with positive macro signals, many Ghanaians still ask; if the economy is improving, why aren’t prices falling?. The answer lies in timing, incomes, and structural issues. Goods currently in shops were often imported or produced when the cedi was weaker, so traders price them to recover earlier costs. Prices rise quickly during shocks but fall slowly when stability returns with its associated fluctuation risks. Wages and salaries have not increased at the same pace as inflation of some goods and services still high, so households continue to feel financial pressure. Dependence on imports, high transport and utility costs, and limited local production further keep prices high.
A strong cedi can also generate a “windfall” of economic benefits if strategically applied. Savings from cheaper imports and lower energy costs can be directed to modern farming equipment, irrigation, and storage, reducing dependence on imported food. Cheaper machinery and raw materials can expand domestic manufacturing, creating jobs and reducing import dependence. Investment in roads, ports, and power supply improves the efficiency of moving goods locally and internationally. Funding technology, training, and storage for cocoa, oil, gold, and cashew helps maintain global competitiveness. A portion of the windfall can support healthcare, education, and social programs, directly improving living standards. Some of it can also be saved in foreign reserves or stabilization funds to buffer against future currency shocks. Finally, incentives, loans, or grants can stimulate local small and medium enterprises, which are vital for job creation and income generation.
Ghana’s situation reflects a fundamental truth: a stronger currency and positive macroeconomic indicators create conditions for progress, but they do not automatically improve living standards. To translate economic recovery into real relief, macro stability must be followed by rising incomes, stronger local industries, affordable credit, and a more efficient supply chain. While the cedi’s strength helps lower import costs and supports macro stability, it simultaneously reduces the value of exports and remittances, affecting both households and government finances. Ghana is on the path to recovery, but turning that progress into everyday relief will require time, structural change, and policies that ensure the benefits of stability reach every Ghanaian.
Author:
George Akom
Snr. Assistant Registrar
Ghana Communication Technology University
Kingakom77@gctu.edu.gh/+233387291
