Something unusual is happening in Ghana, and it’s catching attention across West Africa. The cedi, once seen as one of the region’s most volatile currencies, is staging a powerful comeback.
Between March and mid-May 2025, it surged over 15 percent against the U.S. dollar, earning the distinction of the world’s best-performing currency during that period, according to Bloomberg.
In a region where currencies often weaken quietly, Ghana’s sharp rebound is making noise. In just two months, the cedi’s buying rate improved from GH¢15.53 to GH¢13.09 per dollar, while the selling rate strengthened from GH¢15.55 to GH¢13.10. As of May 13, the cedi had appreciated further to GH¢12.92 per dollar, marking a remarkable trajectory of confidence.
The rally wasn’t confined to the U.S. dollar. It appreciated from GH¢20.09 to GH¢17.42 against the British pound, and from GH¢16.96 to GH¢14.74 against the euro. This kind of across-the-board gain is rare in West African markets.
Behind the turnaround: what Ghana got right
Several key policies underpin this turnaround. This recovery isn’t a stroke of market luck, it’s the result of deliberate and coordinated actions. Ghana’s central bank, the Bank of Ghana, took proactive steps to boost dollar liquidity. It expanded foreign exchange reserves by purchasing domestic gold through the Ghana Gold Board and swapped gold for oil, reducing dollar demand for energy imports.
These moves helped ease pressure on the cedi and restored confidence among traders. “The handlers of the economy have put their house in order and are confronting the challenges with potent measures yielding results,” says John Gatsi, economist and finance lecturer at the University of Cape Coast School of Business.
He attributes the success to sound resource management and policy consistency traits that he notes are often lacking in Nigeria.
But the monetary effort wasn’t working in isolation. Ghana’s fiscal policy also shifted. Under IMF oversight, the government slashed unnecessary spending, restructured its debt, and sent a clear message to markets: Ghana is serious about reform.
President John Mahama has been credited with scrapping burdensome taxes, including the E-levy, COVID levy, and VAT on essential goods moves that brought tangible relief to households and businesses.
The energy sector, once weighed down by a $2.5 billion debt, is seeing cleanup efforts through debt payments and new private-sector involvement in ECG. These steps have re-energized confidence in the broader reform effort.
Also central to the turnaround is the 24-Hour Economy initiative, a plan aimed at expanding employment especially for youth by driving round-the-clock productivity in sectors like manufacturing and logistics.
Programs like the Youth Employment Agency (YEA) are reinforcing this shift. Meanwhile, Mahama’s renewed engagement with the IMF has focused not just on funding, but on renegotiating fairer debt terms, boosting transparency, and pushing for sustainable outcomes.
A turning point for businesses and households
While the effects haven’t fully reached every corner of the economy, the turnaround is already creating breathing room. Businesses in Accra are cautiously beginning to plan long-term again. Inflation slowed to 21.3 percent in April 2025, down from over 41.2 percent two years ago.
“Stability is a powerful currency,” one financial analyst noted. “It gives businesses the confidence to invest, helps households plan, and allows investors to look beyond short-term risks.”
The current exchange rate, now below GH¢13 to the dollar, is reinforcing optimism. It signals that economic reforms are no longer abstract policy ideas; they are delivering measurable results.
Nigeria faces similar challenges but a different path
Nigeria’s story, by contrast, is still unfolding. The country is grappling with its own exchange-rate crisis. While the Central Bank of Nigeria (CBN) has unified multiple exchange windows and introduced some reforms, the naira remains volatile, trading around ₦1,601 per dollar in the parallel market and stifling investor sentiment.
There have been some notable steps: the repayment of a $3.4 billion IMF loan obtained during the pandemic and the reduction of ₦4.68 trillion in central bank overdrafts, known as Ways and Means.
Yet, these efforts have not been fully complemented by consistent fiscal measures. Ongoing fiscal pressures, including high deficits and mixed policy signals, have made it harder for the Central Bank’s reforms to gain sustained traction.
“Reform takes time, but policy consistency, effective communication, coordination between fiscal and monetary policies, and proactiveness all matter,” says Adewale Oja-Bello, a financial economist from Johns Hopkins University. “Without follow-through, even the best-intentioned reforms can lose momentum.”
What Nigeria can learn from Ghana
Ghana’s experience offers Nigeria valuable insights, if it is willing to act. First, Ghana’s tight coordination between fiscal and monetary policy created a credible recovery path. Nigeria’s approach has sometimes lacked the cohesion seen in Ghana, with monetary policies often not backed by matching fiscal decisions.
Second, Ghana’s use of domestic resources to build forex buffers particularly through gold-for-oil swaps shows that innovative, homegrown solutions can work. Nigeria, with its vast untapped mineral and agricultural resources, has similar options but has not deployed them effectively.
Third, restoring investor confidence has been at the heart of Ghana’s success. By adhering to IMF conditions and maintaining transparency in fiscal plans, Ghana convinced investors it was serious. Nigeria’s mixed messaging and policy U-turns continue to leave investors uncertain.
One financial analyst summed it up: “Ghana’s cedi didn’t recover by accident. It took coordination, consistent messaging, and the courage to make hard choices. Nigeria, with its larger economy and deeper financial markets, has even more potential. But without steady action and clear leadership, that potential risks being wasted.”
One policy at a time
Fixing a currency isn’t about bold speeches. It’s about building trust—one policy at a time. Ghana is proving that coordinated reforms, investor confidence, and disciplined use of resources can turn around even a battered currency. Nigeria faces a similar road, but whether it succeeds will depend on whether it chooses to follow through.
