Editorial: Optimism grows as cedi gains ground

The local currency has rallied sharply in the last two weeks. This comes after steep losses since mid-2022. The government is still dealing with heavy debt obligations and tight fiscal conditions.

Official data shows that gross public debt declined by US$3 billion year-on-year. It now stands at US$49.4 billion in 2024. However, cedi-denominated debt increased by GH¢116.7 billion, a 19.1 percent rise year-on-year. By the end of December 2024, it reached GH¢726.7 billion due to cedi depreciation.

Since early 2025, the currency has appreciated by 10.5 percent. It strengthened from GH¢14.71 to GH¢13.31 per dollar by early May 2025.

Analysts attribute this rebound to several supportive factors. A significant rise in gold prices is a key reason. Gold prices jumped from about US$2,000 per ounce in early 2024 to US$3,400 per ounce by May 2025. Ghana benefits as the sixth-largest gold producer globally.

The Bank of Ghana (BoG) and the newly mandated Gold Board (GOLDBOD) have increased gold purchases from small-scale miners. BoG's gold holdings grew from just under nine tonnes in May 2023 to over 31 tonnes by April 2025.

This accumulation boosted BoG’s gross international reserves from US$6.2 billion in February 2024 to US$9.4 billion a year later. This increase enhances its ability to supply foreign exchange into the market.

However, significant risks remain for Ghana's economy. The cedi’s appreciation has helped reduce the foreign component of the debt stock slightly, now estimated at GH¢416.8 billion (US$28.3 billion). This represents about 57.4 percent of total debt.

Ghana's debt servicing profile is heavily front-loaded between 2025 and 2028. The government expects to pay GH¢150.3 billion in domestic debt service obligations alone during this period, which is about