Cedi gains unsustainable without real sector growth – Prof Lord Mensah warns

Prof Lord Mensah, a well-known financial economist, has issued a warning. He believes the recent rise of the Ghanaian cedi may not last. This is especially true if there is no real growth in the economy.

On JoyNews’ The Pulse Show, Prof Mensah discussed the cedi's recent strength against the US dollar. He noted that this trend lacks support from strong economic fundamentals.

“It’s not going to run forever,” he cautioned. He explained that sudden changes make it hard for Ghana to maintain this level.

While the cedi's appreciation may show efforts to stabilize it, Prof Mensah emphasized looking at Ghana’s overall economic productivity.

He observed that there was an earlier depreciation of the cedi before its current appreciation. These fluctuations are common during stabilization phases.

Prof Mensah stated that both upward and downward movements are typical at this stage. However, lasting currency strength relies on performance in key sectors like agriculture and manufacturing.

“You will see swings up and down,” he said. “Over time, we hope for stability.”

He expressed hope that Ghana's real economy would improve within the fiscal year. This improvement could reveal the true impact of the cedi's appreciation.

Prof Mensah added that while short-term interventions can affect exchange rates, sustainable gains require real sector improvements.

His comments come as investors feel cautiously optimistic about the cedi's rise. Economists continue to call for deeper economic transformation in Ghana.