Majority of Cedi’s Appreciation over the Dollar Is Anchored by the NPP Gov’t Initiatives and Policies – Dr. Kwasi Nyame Baafi
Senior Fellow at the Institute of Economic Research & Policy, Dr. Kwasi Nyame Baafi, has attributed the current appreciation of the Ghana cedi against the dollar and other major trading currencies largely to the legacy policies and initiatives implemented under the previous administration.
Speaking on Kessben TV’s Maakye Show, Dr. Nyame Baafi pointed out that the data from the Bank of Ghana clearly supports the claim made by former Vice President Dr. Mahamudu Bawumia, who recently said the recent stability of the cedi is a direct result of policies his administration implemented before leaving office.
Citing official Bank of Ghana statistics, Dr. Nyame Baafi explained: “As at December 2024, Ghana’s international reserves stood at over $9 billion.
Recently, the President said the reserve is now $10 billion, meaning the current administration has added just about a billion. Clearly, the majority of the reserve was built under the previous government.”
Touching on Ghana’s gold reserves, the economist said there’s even stronger evidence that the former government’s Gold Purchase Program significantly bolstered the nation’s reserves before the change in administration. “From independence till May 2023, our gold reserves were 8.7 tons. By December 2024, this figure had jumped to 30.5 tons. Today, Bank of Ghana data shows it stands at 31.3 tons. That means only 0.8 tons have been added under the current administration. These are not political statements, this is data talking.”
However, Dr. Nyame Baafi was quick to point out that some external factors are also at play. He referenced the weakening of the US dollar against other major currencies due to ongoing global trade tensions. “This naturally leads to the dollar weakening against the cedi as well, and it’s something the former vice president didn’t highlight in his recent speech.”
He also raised concerns about the government’s approach to stabilizing the cedi by intervening in the forex market. According to him, there’s a likelihood that the government is converting large amounts of gold purchased over 20 tons into dollars to flood the market artificially. “If only 0.8 tons has been added to the reserves, where is the rest? This artificial injection of dollars can cause short-term appreciation but is not sustainable. We risk ignoring critical sectors that can bring real long-term gains,” he warned.
On claims that the current government’s policies are responsible for the recent cedi strength, Dr. Nyame Baafi was dismissive. He noted that the 2025 budget was read in March and implementation only began in April, too short a time for results to be visible.
“How can anyone say the appreciation is due to policies that have barely started implementation? Academically and objectively, it’s not feasible. What we need are policies that grow the real sector and build sustainable reserves for future shocks,” he concluded.
Dr. Nyame Baafi stressed the need for a non-partisan, data-driven approach to evaluating economic performance and urged the government to prioritize long-term sustainability over short-term political gains.
By: Gifty Bediako Yamoah
