The Akate and Nkansah families lived close to each other as neighbours for a long time. Both families have some distinct characters that set them aside separately. However, the Nkansah family became influential over the Akates, with the Akates building a major part of their lives on the influence of the Nkansah family. The Akate had to be rescued because they had been standing up to their knees in water yet were thirsty. That is the case of Ghana and the rest of the world: Ghana trading in dollars while the Ghanaian Cedi is overlooked. Dr. Casiel Ato Forson, the Minister of Finance, revealed the rescue mission as envisaged by president Mahama during the 2025 mid-year budget review. He said that according to the president;
“no contract awarded by the government, irrespective of the source of funding, should be denominated in foreign currency.”
Dr. Casiel Ato Forson
Why is President Mahama’s Government doing this?
The economy has been hard for Ghana as a country over the years:
- The value of the Ghanaian Cedi keeps dropping (this is called depreciation).
- Ghana’s 2022 debt of around 83% due to COVID-19 and borrowing for projects dropped to 43.8% by mid-2025. This came as the result of government spending less, debt restructuring, and the assistance given by IMF in recovering the economy.
- In 2022, Ghana borrowed an IMF loan of 3 billion dollars due to the crippling of the Cedi as a result of the excess use of dollar among other factors, making the repayment of debts became more difficult. Today, President Mahama does not want contracts to be paid in dollars but in Cedis, not because the IMF insists that he do so, but as a way not to be caught again in the same crisis.
A worn-out currency exposes the country to the following:
- Expensive imported goods. Since Ghana spends over $10 billion annually to import goods with fuel and food taking majority of the amount, buying with a weak Cedi will demand the use of more Cedis to buy the same amount of goods.
- Expensive living conditions in the country because food and transport systems get affected too.
Upon returning in 2025, several priorities were presented by President Mahama and among them was Cedi stabilization. To do this, he must cut down the amount spent by the government, minimize wastage, and increase the number of taxpayers for more revenue. The Cedis in the center of government contracts is a strategic move.
What exactly is the “Cedi Only” policy?
The “Cedi Only” policy means that with immediate effect, the Ghanaian Cedi (GHS) would be the only currency used for all government project payments. All contracts awarded by the government, including those funded by foreign organizations or development partners, are subject to this instruction. When paying debts associated with government projects, no other form of currency will be accepted.
The policy emphasizes on:
- Payment of all the government projects must only be through using no other currency other than Cedi.
- Even projects that are to be paid for by foreigners should go by this rule.
Why is this important?
The shift to a Cedi-only payment system is intended to strengthen the national currency, improve economic stability, and eliminate volatility in exchange rates. This approach strengthens fiscal sovereignty by removing reliance on foreign currencies for domestic projects, while also reducing susceptibility to fluctuations in currencies, which can increase project costs and disrupt deadlines.
The policy is intended to:
- Cut down the use of foreign currency: Government will not have to change huge amounts of Cedis into dollars to pay for contracts. With this, Ghana’s foreign reserves are cushioned, putting the Cedi in a firm position to develop investors’ trust, improve debt settlement, and harness trade and economic growth.
- Enhance trust in local currency: The government has to have trust in the local currency and once it does so, others can trust it to store and make investments. Therefore, contracts, especially big ones, must be priced in Cedis.
- Encourage Transparency and Reduce Corruption to its lowest: The government aims to make every payment for their government services without using cash and entirely shift to the utilization of digital payments by 2028. If everything is digital and in Cedis, it becomes easier to track money inflow and outflow to mitigate misappropriation and waste.
The “Cedi Only” Policy in Economic context
The Cedi has a record of poor performances at the global level:
- In the year 2022, Ghana was unable to pay back monies borrowed from foreigners (Eurobond) partly because the Cedi was weightless on the market.
- Arezki in 2022 shows that the public debt-to-GDP ratio of the country ranged between 83 percent and 93 percent depending on the measurement source and time. The threshold’s fall from 61.8% to 43.8% as disclosed by Dr. Ato Forson signals a critical improvement. Nonetheless, the improvement is evident, but the state of the economy is still weak.
- However, Ghana still depends heavily on gold, cocoa, and oil exports, whose prices keep changing on the world market.
Conclusion
In conclusion, President Mahama led government will seriously demand that all activities of government contracts be done in Cedis only so that the stability of the Ghana currency can be preserved and strengthen Ghana’s economic independence and long-term faith. This will ensure that the Cedi will retain its value both in the domestic market and in the international market. However, this policy should be assessed by the results it produces.
Article by
Nii Lamptey Klokpah
He holds a degree in Political Studies from the Kwame Nkrumah University of Science and Technology. With a deep interest in innovation, technology, agriculture, and philosophy, he is driven in a firm belief that Africa’s future must be shaped by its own people through inclusive, forward-thinking approach.
