Professional services firm, Deloitte, has forecasted a continued slowdown in the depreciation of the Ghanaian cedi throughout 2025.
This projection is based on expected forex inflows from the International Monetary Fund (IMF) programme and the World Bank Development Policy Operation (DPO) funding, which are anticipated to improve the country’s foreign exchange liquidity.
The Economist Intelligence Unit (EIU) has also reinforced Deloitte’s outlook, attributing the relative stability in the cedi’s depreciation to improved forex liquidity and a strong and growing current-account surplus.
The anticipated inflows from the IMF and the World Bank are expected to provide much-needed financial support, ensuring that Ghana has sufficient reserves to manage external shocks. These inflows, along with existing government interventions, are likely to sustain a slower pace of depreciation compared to previous years.
In 2024, the cedi lost about 19 percent of its value against the US dollar, 17.80 percent against the British pound, and 13.70 percent against the euro. While these figures indicate continued depreciation, analysts believe the downward trend will ease in 2025 as external funding and policy measures take effect.
Declining Cocoa Production, A Major Risk
Despite this relatively positive outlook, Deloitte has identified declining cocoa production as a major risk to exchange rate stability. The firm has emphasized that cocoa remains a crucial source of foreign exchange for Ghana, and its declining output could exert pressure on the cedi by reducing forex inflows.
Challenges such as aging farms, climate-related issues, and disease outbreaks have contributed to lower production levels, threatening one of the country’s primary export commodities. Given the significance of the cocoa sector to Ghana’s economy, Deloitte has urged the government to implement measures to boost production and mitigate its impact on the currency.
“Whilst we acknowledge the various policy interventions intended to mitigate our FX risks (i.e. streamlining gold sales through the GoldBod, intensifying forward FX [foreign exchange] auction, reducing public spending and budget deficit, and prioritising import substitution), we have identified the declining cocoa production as a major issue that must be addressed to also help in boosting our forex reserves and reducing the FX demand pressure.”
The firm’s call to action highlights the need for comprehensive reforms to enhance cocoa yields, improve farmer incentives, and address climate-related risks that threaten the sector’s sustainability.
In addition to addressing challenges in the cocoa sector, the government has introduced several policy measures aimed at supporting the cedi. One of these is the gold-for-oil initiative, which allows Ghana to trade gold for petroleum products rather than relying on US dollars, thereby reducing forex pressures in the energy sector.
The Bank of Ghana has also intensified its forward forex auctions to ensure a stable supply of foreign currency in the market. Furthermore, efforts to reduce public spending and narrow the budget deficit have played a role in restoring confidence in the economy, while the push for import substitution has helped limit forex outflows by encouraging local production.
Although these measures have contributed to stabilizing the currency, the overall outlook for 2025 will depend on how effectively the government addresses structural weaknesses in key export sectors. The cocoa industry, in particular, remains a critical component of Ghana’s forex earnings, and any further decline in production could offset gains made through external funding and policy interventions. Additionally, global economic conditions, fluctuations in commodity prices, and geopolitical risks could influence the trajectory of the cedi’s performance in the coming months.
The stability of the cedi in 2025 will largely depend on the government’s ability to implement sound economic policies while ensuring that traditional forex-generating sectors such as cocoa remain robust. By taking proactive measures to increase cocoa output, maintaining prudent fiscal policies, and sustaining forex liquidity, Ghana stands a better chance of achieving greater currency stability in the year ahead.
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