Member of Parliament for Okaikwei Central, Patrick Yaw Boamah, has called for strict fiscal discipline and confidence-building measures to sustain the recent appreciation of the Cedi against the US dollar.
In an interview with George Wiafe of Joy News at the just-ended IMF/World Bank Spring Meetings in Washington, D.C., the Okaikwei Central MP acknowledged the positive performance of the cedi but warned that without prudent financial management, the gains could be short-lived.
According to him, the confidence that managers of the economy bring to bear on the financial market affects how investors project the future of the cedi.
Patrick Boamah pointed to the expected disbursement of over $300 million from the IMF as a potential short-term stabilizing factor for the currency, stressing that such inflows are key to boosting reserves and reassuring the business community.
He said, “If you’re receiving over $300 million, it adds to your reserves and gives some assurance to the business community. It has the potential to bring some level of stability to the market,” he noted.
However, he cautioned against over-optimism, pointing to ‘unpaid government arrears totaling about GH¢18 billion’ as a major risk to currency stability. According to him, if the government begins releasing large sums to clear these arrears, it could exert pressure on the cedi.
“Government has not been paying some of these arrears for the past six months. The potential injection of such funds into the system could pressure the local currency,” he observed.
He also questioned the authenticity of the cedi’s recent rally—from GH¢15 to about GH¢14 to the dollar—suggesting the need for closer scrutiny.
“We need to investigate whether this is artificial or the result of real economic interventions. We must understand whether it’s sustainable or just a temporary reprieve.”
He also pointed to global economic challenges, including U.S.-China tariff tensions and a weakening U.S. dollar as external factors that could impact Ghana’s currency outlook.
According to him, if tariff issues are resolved and importers don’t need to rely heavily on central bank forex, then it can be assessed whether the gains are sustainable.
Boamah linked the performance of the cedi to broader macroeconomic indicators, referring to World Bank and IMF data showing a 61.8% debt-to-GDP ratio and a revised economic growth projection of 3.9%, down from 4.4%.
“Clearly, the pending arrears and depreciation risks are being factored into those projections,” he stated and stressed the need for vigilance and effective debt servicing strategies.
He warned the progress may be a brief relief and stressed patience to see how the government manages the situation — especially how it services its debts.
According to him, that will ultimately determine the strength and stability of the cedi in the coming months.”