By Issah Olegor
Ghana’s currency, the cedi, has shown surprising resilience and recent appreciation on the foreign exchange market.
According to Joe Jackson, the Chief Operating Officer of Dalex Finance, this development is the result of both favourable international market dynamics and deliberate internal economic discipline.
Speaking on Citi FM’s Eyewitness News on Friday, May 9, Jackson offered a detailed analysis of the underlying factors that have driven this rare moment of currency strength.
A Convergence of Global Shifts
Jackson highlighted that the cedi’s recent stability and upward movement are partly due to what he termed “a perfect alignment of global forces.”
Among the most significant contributors, he pointed to the weakening of the U.S. dollar, the fall in global oil prices, and a surge in gold prices.
He explained that the depreciation of the dollar stemmed largely from global trade tensions, particularly during former U.S. President Donald Trump’s administration.
The economic uncertainty, especially with China, triggered a retreat from the dollar by global investors, benefiting currencies like the cedi.
Simultaneously, the slowdown in global economic activity led to a drop in oil prices.
As Ghana’s largest import commodity, the reduced cost of oil lessened pressure on the country’s foreign exchange reserves.
“Cheaper oil means less dollars leaving the economy to pay for fuel,” Jackson emphasized.
Furthermore, gold prices have seen a consistent climb, driven by investor preference for safer assets in volatile markets. Ghana, being Africa’s top gold producer, has directly benefited from this shift.
“The icing on the cake,” Jackson noted, “was the appreciation of Ghana’s gold reserves, which are now worth significantly more.”
Strategic Policy Moves by Ghana
While acknowledging the role of external events, Jackson was quick to assert that Ghana’s own internal policies have been instrumental in taking advantage of these tailwinds.
He commended the Bank of Ghana for increasing the country’s gold reserves—a move that placed the nation in a stronger economic position just as gold prices surged.
“In the last eight years, gold has outperformed the U.S. dollar by over 100%,” he noted. “By increasing our reserves in gold rather than in dollars, the central bank made a forward-thinking choice that paid off.”
Jackson also drew attention to recent efforts by the government to ensure transparency and accountability in the management of Ghana’s gold resources, particularly the implementation of the gold-for-oil policy and related mechanisms.
He believes these policies have enabled the country to retain more value from its natural wealth.
“The issue of ‘goldbod’ and its implementation in a transparent and accountable manner meant that we were going to retain far more value in our gold,” he said.
“So there was that internal commitment to prudent economic behaviour.”
Background Context: A History of Volatility
The cedi has historically suffered from severe volatility, often depreciating rapidly in response to both domestic mismanagement and external shocks.
In recent years, the currency faced intense pressure from rising inflation, debt distress, and global economic uncertainties—especially during the COVID-19 pandemic and the aftermath of the Russia-Ukraine war.
However, since 2023, Ghana has pursued a range of economic recovery measures under a $3 billion International Monetary Fund (IMF) programme.
These have included fiscal consolidation, restructuring of public debt, and boosting local production.
Analysts believe these measures have started to restore investor confidence and stabilize macroeconomic indicators.
Looking Ahead
While Jackson celebrated the recent improvements, he warned that Ghana must not become complacent.
The favourable external conditions may not last forever, and sustained currency strength will depend on continued internal discipline and sound economic governance.
“We are in a good space because the stars aligned for us—and better still, because we had the internal commitment and discipline to take advantage when they did,” he concluded.
