The Ghanaian cedi’s powerful rebound in 2025 has injected fresh energy into the country’s fragile economy. After struggling through years of currency volatility and inflation shocks, many consumers today are finally seeing some relief. The cedi, which depreciated by nearly 4% early this year, has flipped course, appreciating by over 24% against the US dollar as of May.
The recovery is being driven by a mix of global and local forces: a weaker dollar on international markets, rising gold reserves at the Bank of Ghana, and tighter fiscal and monetary management at home. But as Ghanaians welcome cheaper prices on imported goods, a quiet storm is gathering beneath the surface, one that threatens the country’s long-term food security and industrial future.
At the heart of this dilemma lies a delicate trade-off: how to protect domestic producers while delivering price relief to struggling households.
Cheaper Imports, Cheaper Inputs
For consumers, the stronger cedi has been a blessing. Prices of imported staples like rice, wheat, cooking oil, sugar, and flour, all heavily consumed across the country, have softened. In a year where food inflation, while declining, still sits above 22%, any relief is welcome.
For the agriculture sector, too, the gains offer opportunity. Ghana remains heavily dependent on imported inputs to power its farms. In 2024, the country imported over GHS 38 billion worth of machinery and electrical equipment, accounting for about 15% of total imports. Items like bulldozers, herbicides, and plant-growth regulators made up significant portions of these imports.
A stronger cedi means cheaper access to fertilizers, seeds, agrochemicals, and equipment, essential tools for farmers seeking to boost production. The poultry industry, in particular, feels this directly. With limited local hatchery capacity, most day-old chicks are imported. Feed ingredients like soybean meal, maize additives, and premixes are also tied to international prices. As the cedi holds firm, production costs for local poultry farmers drop.
The Hidden Danger: Undermining Local Producers
But as imports get cheaper, Ghana’s domestic producers are walking a thin line. The same currency strength that lowers their costs also makes foreign finished products more affordable for consumers. Without proper safeguards, local industries risk being priced out of their own market.
The poultry sector offers a clear example. Even as farmers benefit from cheaper inputs, the flood of imported frozen chicken, made even cheaper by the strong cedi, threatens to squeeze local producers who struggle to compete at scale.
Rice farmers face a similar challenge. While consumers enjoy cheaper imported rice, local producers, often smaller, less mechanized, and facing higher production costs, find it increasingly difficult to match imported prices.
This balancing act was emphasized in a recent report by the IMANI Center for Policy and Education titled Criticality Analysis of Key Economic Issues.
As the report puts it: “There must be a right balance: consumers want relief, but producers need protection.”
Walking the Tightrope
The cedi’s appreciation has created a valuable but fragile window of opportunity. On one hand, cheaper imports are helping to cool inflation and bring welcome relief to consumers battered by years of rising prices. On the other, Ghana’s growing dependence on external supply chains leaves local producers increasingly exposed.
Policymakers now face a delicate balancing act. If they rely too heavily on cheap imports to stabilize prices, domestic industries may weaken further, threatening long-term food security and self-reliance. Yet, if protectionist barriers are raised too aggressively, consumers could once again bear the burden of rising costs.
The real test lies in using this moment of currency strength to build resilience at home, investing in local processing, modernizing logistics, strengthening farmer cooperatives, and adopting smart trade policies that shield against unfair competition while fostering competitiveness.
