Kwadwo Poku Warns: Lower Exchange Rate Is Collapsing Ghana’s Manufacturing Base

Kwadwo Poku, a member of the New Patriotic Party (NPP) communications team, has warned that the lower exchange rate is collapsing Ghana’s manufacturing base. According to Poku, Ghanaian exporters are losing significant amounts of money because of the lower exchange rate, and this situation is contributing to the collapse of manufacturing companies in the country. His argument, which has sparked debate about exchange rate policy and its impact on the real economy, challenges the conventional view that a stronger cedi is uniformly beneficial.

Poku explained that as the Bank of Ghana continues to lower the exchange rate, businesses that export goods to other countries lose money when they sell their products abroad and repatriate the proceeds in US dollars. This is because the value of the dollar, when converted into Ghanaian cedis, decreases. In other words, exporters earn revenue in foreign currency but receive fewer cedis when they convert those earnings back home. For manufacturers who depend on export markets, this erosion of cedi-denominated revenue can squeeze profit margins and undermine viability.

The argument highlights a tension in exchange rate policy that is often overlooked in public debate. A lower exchange rate—meaning a stronger cedi—can be beneficial for importers and consumers, as it reduces the cost of imported goods and helps control inflation. However, it can be detrimental for exporters, who become less competitive internationally and receive less in local currency for their foreign earnings. Poku’s contention is that the balance has tipped too far against exporters, with serious consequences for Ghana’s manufacturing sector.

The claim that manufacturing companies are collapsing as a result is a serious one. Ghana’s manufacturing sector has long struggled with challenges including high production costs, unreliable power supply, and competition from imports. If exchange rate policy is adding to these pressures, it could accelerate deindustrialization and job losses. Poku’s warning is therefore a call for policymakers to consider the needs of exporters and manufacturers when setting exchange rate policy, rather than focusing solely on inflation control and import affordability.

The debate raised by Kwadwo Poku is unlikely to be resolved quickly. Exchange rate policy involves difficult trade-offs, and different stakeholders will have different priorities. What is clear is that the concerns of exporters and manufacturers deserve serious attention. If the lower exchange rate is indeed contributing to the collapse of Ghana’s manufacturing base, then policymakers must weigh that cost against the benefits of a stronger cedi. Kwadwo Poku has raised an important issue; the challenge is to find a policy balance that supports both macroeconomic stability and a thriving manufacturing sector.