Cedi vs Imports: Why Ghana’s currency fell from global hero to quarter’s worst performer — and what it means for you

Ghana’s currency had a week to remember and a week to forget. In April 2025 the cedi was praised by global markets after a strong rally. By early September Bloomberg ranked it the world’s worst performer for the third quarter, after a sudden surge in import demand pushed the currency down. The fall wiped out a large part of the earlier gains and left ordinary people asking a simple question: what does this mean for my wallet?

This article lays out what happened, why imports matter so much, how consumers feel the impact, what experts and officials say, and which policy moves could help pull the cedi back onto firmer ground.

The quick timeline you need to know

• Early 2025: the cedi rallied strongly. Exports, higher gold prices, and policy support lifted sentiment and helped the currency gain ground.
• End of June 2025: official reserves rose to about $11.1 billion, giving the central bank some breathing room.
• July to September 2025: businesses increased dollar demand to pay for imports as they prepare for the end-of-year season. The Bank of Ghana limited dollar allocations. That mismatch between demand and supply triggered a sharp depreciation in Q3. Bloomberg shows the cedi lost about 13.4 percent in the quarter.

Put simply, the cedi’s swing reflects a gap between dollars needed and dollars available at the prices market participants accept.

Why imports are the central issue

Ghana imports a wide range of goods. Firms buy food staples, fuel, machinery, and raw materials from abroad. When importers need dollars at the same time, the market strains. If local exporters and foreign inflows do not match that demand, the cedi comes under pressure.

In Q3 2025 imports peaked for two reasons. First, companies moved to stock up for the Christmas season and for manufacturing runs. Second, some firms sped up dollar purchases after local supply tightened. The Bank of Ghana had more reserves than a year earlier but reduced discretionary dollar allocations. Banks reported that businesses sometimes received only part of their dollar requests. That gap pushed the dollar price higher in the market.

This is not a uniquely Ghanaian problem. Many import-reliant economies see currency stress when seasonal demand rises and dollar supply tightens. The lesson is basic. If you rely on imports, you remain exposed to global price shifts and to changes in the flow of foreign exchange.

How the fall affects everyday Ghanaians

A weaker cedi translates quickly into higher prices for imported items. Households notice this in three ways.

1. Food and cooking essentials. Retail prices for imported rice, sugar, and vegetable oil can rise. Even when those items are local, transport costs and inputs rise with the currency, pushing food inflation higher.
2. Fuel and transport costs. Fuel is priced in dollars at source. A weaker cedi raises pump prices. That adds to transport costs and raises the price of goods across the economy.
3. Cost of goods and services that rely on imported inputs. Construction materials, spare parts, electronics, and even some medicines get more expensive when the cedi weakens.

Businesses also feel the shock. Firms that import inputs see margins squeeze. Some may raise prices. Others delay investment. Banks have a harder job managing foreign-exchange exposure. For households this means wallets tighten. For small traders it means planning becomes harder.

On the bright side, recent inflation figures offered relief. Consumer inflation eased to 11.5 percent in August, its lowest in nearly four years. That decline suggests price pressures have started to cool, but large currency swings can undo gains quickly.

What officials and critics are saying

The Bank of Ghana and the government highlight the bigger context. The central bank notes that the cedi still shows gains year to date and that gross reserves improved earlier in the year. The IMF programme with Ghana continued to provide support, including a disbursement after a review in July. Those factors helped stabilize markets earlier this year.

Not everyone accepts intervention as a long-term fix. Tweneboah Kodua Fokuo, a senior lawmaker, warned that the earlier appreciation was driven by temporary global factors rather than by structural local change. He argued that continuous foreign exchange intervention without deeper reforms is unsustainable. His point is strategic. Interventions can buy time. They do not fix the structural causes of currency weakness.

Market participants offered similar cautions. Traders said sudden shifts in supply and demand can amplify moves, while some analysts warned that recycling dollar reserves to defend a specific rate could leave the central bank exposed if pressures persist.

Are the critics right?

Mostly yes. Critics who say interventions only provide short-term relief have a solid point. Holding the cedi at an artificial level through frequent market intervention uses reserves and can build vulnerability to shocks. If imports remain large and domestic export supply does not grow, the underlying balance of payments problem stays. That means repeated interventions will become costly.

That said, interventions can make sense when they provide time for policy fixes to take effect. The trick is to combine interventions with real reforms that reduce import pressure or expand dollar supply. In Ghana’s case recent steps such as debt restructuring, IMF-backed support, and reserve accumulation improved the macro picture. But the resurgence in import demand shows those gains can reverse quickly without structural follow-through.

The practical policy path forward

Policymakers have tools. No single option will fix everything. But combined measures can reduce the risk of future currency shocks.

1. Manage import demand. The government can use temporary, targeted measures to reduce non-essential imports while protecting critical supply lines. That might include temporary taxes or limits on certain luxury imports, plus incentives for local substitutes.
2. Boost export earnings. Faster reform and support for primary exports such as gold, cocoa, and oil can raise foreign exchange inflows. Export diversification and value addition help too. The IMF programme and World Bank support aim to help here.
3. Improve forex market functioning. Letting market forces signal prices while ensuring orderly conditions helps. Transparent auctions, stronger hedging markets, and clearer allocation rules reduce panic buying.
4. Build longer-term buffers. Reserve accumulation, coupled with better fiscal management, creates space to manage shocks without panic. The mid-year fiscal review and IMF reviews both support tightening fiscal control and improving reserves.
5. Support local production. Incentives for manufacturing and import substitution reduce exposure to global dollar swings. This is a multi-year agenda but it addresses the root cause.

These steps require political will and policy coordination. They also take time. Interventions remain useful to smooth short blips. The key is to use them while implementing reforms that make future interventions less necessary.

What households can do now

Households cannot control exchange rates. They can prepare.

• Budget for uncertainty. Expect some price volatility for imported goods.
• Shift to local substitutes where possible. Local staples and services may be cheaper and more stable.
• Watch official channels for changes to fuel and utility pricing so you can plan.
• Use fixed-rate or short-term savings instruments if you want to protect against near-term price moves.

Small businesses should tighten cash flow management and explore forward contracts or FX hedging where feasible. Banks and corporates with large foreign-currency exposure should review risk policies.

The bottom line

Ghana’s Q3 currency reversal shows how quickly external pressures can overturn domestic gains. Critics who warn against repeated interventions have a valid point. Interventions buy time. They do not replace reforms.

The good news is that Ghana entered 2025 with improved reserves and international support. The IMF programme and fiscal steps created breathing room. To keep that space open, policymakers must combine careful market management with structural reforms to cut import reliance and boost exports.

Until then, Ghanaians will watch exchange-rate headlines closely. For many, the real question remains practical and local. Can I still afford the market staples and the bus fare next week? If policy sticks to reform and the private sector backs local production, the answer can move back toward yes.