Accra, Ghana – Joe Jackson, Chief Executive Officer of Dalex Finance, asserted at the University of Professional Studies, Accra, that Ghana’s persistent currency volatility stems primarily from structural leakages within its vital extractive sector, rather than a decline in export performance. This assertion, made during the 2026 Dean of Business School Lecture Series, challenges prevailing economic diagnoses and suggests current policy responses are misdirected.
Jackson highlighted the dramatic fluctuations of the Ghanaian cedi, noting its depreciation of nearly 71 per cent between 2016 and 2024, followed by a significant appreciation of approximately 40 per cent from 2024 to 2025. He characterized these movements as indicative of “dangerous volatility” rooted in “unresolved structural weaknesses” within the economy.
Contrary to the common belief that currency weakness results from poor export figures, Jackson pointed to Ghana’s recent history of recording trade surpluses. This suggests that the problem lies not in earning foreign exchange, but in retaining it.
“The hard truth is that Ghana earns foreign exchange, but does not retain it,” Jackson stated, explaining that substantial inflows from gold, oil, and cocoa exports are depleted through various channels. These include significant outflows for service imports, profit repatriation by foreign companies, external debt servicing, and capital flight.
Jackson provided a stark illustration from 2024, where Ghana achieved a trade surplus of about US$5.1 billion. However, the country subsequently lost close to US$8 billion due to these leakages. “In simple terms, we earn the dollars and then we send them back out,” he emphasized.
The gold sector exemplifies this challenge. Despite exporting approximately US$11.9 billion worth of gold, less than half of this value remained within Ghana. Jackson contrasted this with countries like South Africa and Botswana, which, despite lower export volumes, manage to retain a larger share of their resource wealth through enhanced domestic participation and value addition initiatives.
While acknowledging the potential of the newly introduced Ghana Gold Board, Jackson noted it as a partial solution. The board aims to centralize gold purchases, align local prices with international benchmarks, and formalize artisanal mining. Early indications suggest this initiative could boost export value by 75 per cent and more than double the contribution from artisanal mining.
However, Jackson cautioned that the Gold Board addresses only a segment of the problem. “The major leakages service imports, profit repatriation and debt servicing remain largely untouched,” he warned. These persistent outflows continue to drain foreign exchange reserves.
Adding to the currency instability, Jackson pointed to high domestic inflation. Inflation, which peaked around 54 per cent in 2022, has remained significantly higher than in Ghana’s major trading partners throughout 2024. This persistent inflation erodes the cedi’s purchasing power, makes imports more attractive, necessitates higher interest rates, and discourages individuals and businesses from holding the local currency long-term.
Achieving sustainable exchange rate stability, according to Jackson, requires a dual approach of external and internal economic discipline. Externally, he called for targeted policies to increase value retention from the extractive sector. This would involve fostering deeper local participation, strengthening domestic supply chains, and promoting value addition within the country.
Domestically, Jackson stressed the critical need for stringent fiscal discipline and prudent monetary policy to effectively curb inflation. He urged policymakers to shift their focus from merely increasing export volumes to prioritizing the retention of earned foreign exchange. Jackson concluded that the persistent volatility of the cedi is a clear symptom of underlying weaknesses in economic discipline.
Looking ahead, the effectiveness of new initiatives like the Ghana Gold Board in stemming outflows will be crucial. Furthermore, sustained commitment to fiscal consolidation and monetary policy aimed at taming inflation will be key indicators to watch for signs of improved currency stability in Ghana.
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