The Economist Intelligence Unit (EIU) has predicted that the Ghanaian cedi will end 2024 at a rate of GH¢16.07 to one US dollar, with a slight depreciation expected in 2025 to GH¢17.23 to one dollar. This forecast was revealed in Deloitte’s "Sneak Preview of 2025" report. The EIU attributes the expected weakness of the cedi at the end of 2024 to a reduction in cocoa exports and an increase in the country’s import bill. However, the situation is expected to improve in 2025, with factors such as peaceful elections, the completion of the government's debt restructuring negotiations, and increased gold export earnings all contributing to a more stable currency. The cedi is currently trading at GH¢16.10 to the dollar on the retail market.
According to Deloitte, a stable exchange rate plays a crucial role in restoring investor confidence in Ghana’s economy. The report highlights potential risks to the cedi's stability, particularly from increased imports in sectors such as hydrocarbons and mining projects. Furthermore, a greater-than-expected decline in cocoa exports could significantly narrow Ghana’s trade surplus and negatively affect its current account balance. The current account balance is forecast to drop from an estimated US$1.6 billion in 2024 to just US$700 million in 2025. If these risks materialize, it could complicate efforts to maintain the cedi’s value in the international market.
Despite these challenges, the EIU’s outlook for 2025 remains cautiously optimistic. The anticipated depreciation of the cedi is expected to be moderate, and factors such as improved investor confidence, the peaceful election outcome, and stronger export receipts from gold are expected to provide the necessary support for the local currency. While there are concerns about the potential decline in key exports like cocoa, the overall outlook suggests that the cedi could stabilize over the next year. Ghana’s economy is projected to benefit from higher international reserves and favorable conditions in its major export sectors, especially gold, which should help counterbalance the pressures on the cedi.
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