Cedi appreciation to slash Ghana’s debt stock by 10% ahead of MPC meeting – JoyNews Research

Ghana’s public debt could decline by about 10%. This is due to the rapid appreciation of the cedi, according to JoyNews Research.

Since early 2025, the Ghana cedi has gained around 21.5% against the US dollar. It is now the fastest-appreciating currency globally since April 2025, as reported by Bloomberg.

JoyNews Research estimates this increase will ease Ghana’s external debt burden. The current GHS726.7 billion debt could reduce by GHS74 billion. This may lead to an overall debt reduction of about 10%, explained Isaac Kofi Agyei, Lead Analyst at JoyNews.

This situation marks a change from previous trends. In 2022, the cedi's depreciation added GHS93 billion to national debt.

Ken Ofori-Atta, former Finance Minister, noted that cedi depreciation affects debt management. He stated that the stock of debt increased by GHS93 billion in 2022 alone due to this issue.

Several factors have contributed to the cedi's strong performance. Internationally, a weakening dollar dominance among BRICS nations has played a role.

Countries are increasingly using alternative currencies for trade and oil purchases. This shift responds to protectionist policies from past administrations.

The global trend of de-dollarization is benefiting emerging market currencies like the cedi. Domestically, the Bank of Ghana has taken proactive measures.

The central bank injected dollars into the market for foreign exchange support. This was especially aimed at Bulk Oil Distributors (BDCs) to ease pressure from petroleum imports.

Unlike previous election years, the current administration has limited fiscal spending early in its term. This restraint has helped stabilize cedi liquidity and control inflationary pressures.

Additionally, Ghana’s $3 billion IMF programme has restored investor confidence significantly. The programme includes strict conditions on fiscal discipline and structural reforms.

Ghana’s gross international reserves have also increased notably. They rose from $6.1 billion in early 2024 to over $9.3 billion in February 2025.

This boost strengthens the central bank's ability to defend the cedi against speculation attacks. Despite falling oil revenues, gold exports surged to $2.3 billion in early 2025.

This figure is up from $1.4 billion during the same period in 2024. Cocoa export earnings also more than doubled from $369 million to $836 million between February 2024 and February 2025.

Under the IMF programme, Ghana secured debt moratoriums and haircuts on debts too. These arrangements are expected to create more fiscal space ahead of tomorrow’s Monetary Policy Committee meeting.

Analysts will closely watch this meeting for its response to positive macroeconomic trends. They believe it could influence interest rates and inflation expectations later this year.