Africa Policy Lens Partly Attributes Cedi Appreciation to Akufo-Addo’s DDEP
The Africa Policy Lens (APL) has partly attributed the cedi’s appreciation to the infamous Domestic Debt Exchange Programme (DDEP) by former President Nana Addo Dankwa Akufo-Addo.
Acknowledging the effective measures by the current government which plays the maximum role in the gains, it explained that the restructuring reduced near-term debt service obligations and created fiscal space to support stabilization efforts in 2025.
“APL also recognizes the residual impact of earlier policy actions, particularly the painful but ultimately successful debt restructuring initiated in 2023–2024,” it communicated in a publication on May 28, 2025.
It also cited the gold reserve accumulation strategy, launched by the previous administration as the groundwork for the central bank’s recent gold-backed forex liquidity operations.
It further pointed to global macroeconomic shifts—especially the weakening of the US dollar due to trade tensions and the emerging global tariff war—as contributing to the cedi’s strength, as other currencies gain ground against the dollar.
Meanwhile, it acknowledged the current government’s expenditure freezes, arrears audits, and strategic forex interventions as playing a significant role in restoring market confidence.
“These combined domestic and global forces have converged to support the cedi’s rise, though their sustainability remains a pressing question.”
It cited S&P Global Ratings’ prediction that the cedi will relapse in the second half of 2025 due to structural imbalances, persistent inflation, and fiscal constraints.
In this regard, the APL called on the government to double down on structural reforms by diversifying the export base to boost non-traditional forex earnings, accelerating fiscal reforms to raise revenue and rationalize spending, and completing the ongoing debt restructuring to firmly anchor debt sustainability.
“Strengthening institutions and policy credibility – for example, through adhering to zero central bank financing of the deficit and enhancing transparency in reserve management – will also help entrench confidence in the cedi beyond the short term.”
According to the CSO, the Cedi should be able to stand on its own without continuous life support from the central bank.
It said this could be achieved through a self-sustaining balance of trade, investment, and sound monetary governance.
Read the Full Publication Here: Africa Polciy Lens | GOLD, AUSTERITY, AND INTERVENTION: WHAT’S FUELING THE CEDI’S RISE – AND WILL IT LAST?
Source: Hajara Fuseini – Opemsuo 104.7
