Ghana’s local currency, the cedi, has staged one of its most remarkable recoveries in recent history, appreciating by more than 40% against the US dollar, 31% against the British pound, and 24% against the euro.

The rally, fueled by improved macroeconomic stability, declining inflation, and strong external reserves, has been hailed as a sign of renewed investor confidence and a stabilizing economy.

However, this economic success story has come with an unexpected twist — a near 50% drop in remittance inflows from Ghanaians living abroad. This startling revelation was made by the Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, during the launch of the Bank of Ghana Chair in Finance and Economics at the University of Ghana.

Diaspora Money Transfers Plummet

Dr. Asiama explained that many Ghanaians in the diaspora have slowed or completely paused sending money home for local projects due to the currency’s sharp appreciation.

“The appreciation of the cedi so far, Ghanaians are interpreting this differently, and it is part of the problem. People who used to send remittances for projects have suddenly stopped, and so we have observed a near 50% decline in remittance inflows.”
Dr. Johnson Asiama

For many overseas Ghanaians, remittance decisions are often influenced by exchange rate movements. When the cedi was weaker, converting foreign currency into Ghanaian cedis yielded higher returns, making it more attractive to fund projects such as house construction, business ventures, or family support. Now, with the cedi’s strength, the same foreign amount yields fewer cedis than before, discouraging transfers.

Economic Stability vs. Project Funding

The BoG Governor was quick to emphasize that the cedi’s appreciation should not necessarily halt diaspora contributions. He pointed out that falling inflation and improved price stability in Ghana should ideally reduce the cost of building materials and other project expenses, offsetting the reduced exchange rate advantage.

“By the way, if you are doing projects in Ghana, cement prices must also adjust, not so? Inflation is coming down so the prices of those building materials must also adjust, and therefore, on the balance, it shouldn’t matter.”
Dr. Johnson Asiama

This statement underscores a broader economic challenge — ensuring that macroeconomic gains translate into tangible price adjustments in the local market. Without these adjustments, the diaspora may continue to perceive project costs as unfavorably high despite currency stability.

In a bid to reverse the sharp decline in remittances, Dr. Asiama suggested a proactive outreach campaign to reconnect with Ghana’s global diaspora community. He proposed organizing roadshows in major remittance-originating countries to explain the current economic dynamics and encourage continued investment in local projects.

“Someone told me this morning [August 5, 2025], we need to do a roadshow across the top remittance originating countries… we need to go and explain to them to continue sending their monies regardless where the exchange rate is.”
Dr. Johnson Asiama

Such engagement could help address misconceptions and reassure overseas Ghanaians that their contributions remain vital for sustaining Ghana’s economic and social development, even in times of currency strength.

Remittances have long been a crucial lifeline for Ghana’s economy, often ranking among the top sources of foreign exchange inflows. These funds support household consumption, education, healthcare, and small-scale investments across the country. A sustained 50% decline could have ripple effects, reducing disposable incomes for thousands of families and slowing the pace of local development projects.

The cedi’s robust performance is undoubtedly a milestone worth celebrating, signaling Ghana’s resilience and improved economic management. However, as the BoG Governor’s remarks highlight, strong currencies can produce unintended side effects, particularly for economies that rely heavily on remittances.