Since the latter part of last week, Ghanaians, individuals and institutions alike, have been busy, with their intense assessments of President John Dramani Mahama’s performance with regards to fulfilling the promises he made under his 120 days Social Contract he made with Ghanaians upon being elected back to the country’s presidency.
While the controversy over his performance continues to rage, the verdict on his administration’s handling of the economy has been less varied. It is instructive that the main debate between government’s proponents and its opponents has not been about how much has been achieved; rather it has been about the real architects of the successes made. While the Mahama administration points out that Ghana’s key macro-economic performance indicators have improved tremendously under its guidance the outgone NPP chieftains argue that they provided the foundation on which the ongoing successes have been built, arguing that debt restructuring, the IMF programme and the policy of building gross international reserves were all products of their administration.
Few politically neutral Ghanaians however readily agree with that rhetoric as most of them are feeling a new sense of relief after enduring a harsh cost of living crisis during the last two years of the Akufo-Addo administration.
In a remarkable turnaround, the Ghanaian cedi has emerged as the world’s best-performing currency in 2025 – according to data from Bloomberg – appreciating nearly 16% against the U.S. dollar since April and trading at GH₵13.4 as of early May 2025. This resurgence marks a stark contrast to its status as the worst-performing currency in 2022, when it lost over 55% of its value amid a debt crisis and inflationary spiral. The cedi’s rebound has injected optimism into Ghana’s economy, easing inflation to 21.2% in April and revitalizing business confidence.
Several factors have driven this performance.
The Bank of Ghana (BoG) has played a pivotal role through aggressive monetary tightening and forex market interventions. Another pivotal factor has been the commodity revenue windfall arising out of the ongoing price surges in two of Ghana’s main traditional exports, gold and cocoa despite continued production sluggishness in the latter.
Yet another factor has been the impacts of the ongoing three year International Monetary Fund programme, which includes a US$3 billion financial bail out and an insistence on a return to demand management economic management policies to restore macroeconomic stability after the near-chaos that reigned from late 2022 to late 2023. The current government’s austerity measures have reduced treasury bill yields from 28% to 15%.
However, a return to sustainable economic stability is not yet a done deal. The sharp decline in treasury bill rates amounts to a bubble with other interest rates still as high as they were when management of the economy changed hands at the beginning of January. Instructively recognition of the fragility of the economic rebound has persuaded the central bank to tighten monetary policy further in March rather than loosen it.
A potential pitfall is Ghana’s commodity dependence amid global markets price volatility. A downturn in gold prices or cocoa yields could reverse gains. The IMF warns that import dependency and a US$3.6 billion Eurobond repayment schedule between 2025 and 2028 could strain reserves
There has been a key external factor too in that the dollar’s depreciation has amplified the cedi’s relative strength and uncertainties remain as to how this will pan out going forward.
Indeed, the threat of global headwinds remains a clear and present danger
