The appreciation of the local currency, which has strengthened by over 40% against the US dollar, 31% against the British pound, and 24% against the Euro, is attributed to improvements in macroeconomic stability, falling inflation, and growing external reserves.
Dr. Asiama, speaking at the launch of the Bank of Ghana Chair in Finance and Economics at the University of Ghana, explained that while the cedi’s appreciation shows growing investor confidence, it is also leading to behavioral changes among the diaspora.
Many Ghanaians living abroad, who previously sent money for local projects, have now paused these remittances.
“The appreciation of the cedi so far, Ghanaians are interpreting this differently, and it is part of the problem,” Dr. Asiama said.
“People who used to send remittances for projects have suddenly stopped.”
This change in behavior has had a notable impact on the economy, as the once steady flow of remittances has slowed.
Despite the challenges, the Bank of Ghana is actively exploring ways to address the issue.
Dr. Asiama suggested that a roadshow in countries with large Ghanaian populations may help educate the diaspora on the benefits of continuing their remittance contributions.
He emphasized that even with the currency’s appreciation, the cost of local projects, such as building materials, should remain relatively stable due to falling inflation.