By: Dauda Iddrisu || 7th November,2025
In recent months, the Ghanaian cedi has experienced notable gains against key foreign currencies, including the US dollar, British Pound, and Euro. Although this appreciation is frequently interpreted as a positive indicator of economic stability and recovery, it has also generated unease among Ghanaians living overseas. For many in the diaspora, the strengthening of the cedi brings both financial and economic consequences that are rarely acknowledged in mainstream discourse.
1. Downward Trend in Remittances
For many Ghanaian families, remittances are a vital support system. The Bank of Ghana reports that money sent home by the diaspora adds billions of dollars to the economy annually – approximately, US$4.8 billion and US$6.65 billion in 2023 and 2024 respectively. Yet, as the cedi gains value, the amount received in local currency terms decreases.
Consider a scenario where the exchange rate moves from GH¢17 to GH¢12 per US dollar. A $1,000 transfer that once yielded GH¢17,000 now brings in only GH¢12,000 – a decline of GH¢5,000. This reduction erodes the real value of remittances, limiting their ability to cover key expenses like rent, tuition, and healthcare. As a result, many in the diaspora perceive that exchange rate volatility is undermining the financial support they strive to provide.
2. Declining Returns on Investments in Ghana
Many Ghanaians living overseas invest in real estate, treasury bills, or local businesses as a way of maintaining ties to home and preparing for eventual return. A stronger cedi, however, can reduce the value of these investments when measured in foreign currency terms.
If the appreciation is temporary and the cedi later weakens, investors who hold assets in Ghanaian cedis stand to lose. This exchange rate uncertainty makes some cautious about investing more money in Ghana, especially if they suspect that the appreciation is not backed by strong economic fundamentals.
3. Budgeting and Planning Challenges
Ghanaians living abroad often manage their finances with precision, balancing the expenses of life overseas alongside responsibilities to family and investments in Ghana. When the cedi appreciates suddenly, these financial arrangements are thrown off balance. Those who send money regularly may discover that their usual remittances no longer cover their relatives’ needs, forcing them to increase transfers in foreign currency. This adjustment can create extra pressure on their personal budgets.
4. Sustainability-related Concerns
For many abroad, the question is not just that the cedi is appreciating — but the reasons behind it. If the rise is driven by temporary government interventions, short-term capital inflows, or external borrowing, it may not last. This raises fears that once those factors fade, the currency could depreciate sharply again. Such volatility undermines confidence and creates hesitation among those who might otherwise invest or remit regularly.
5. Reduced Incentive to Send Money Home
When the cedi is strong, the exchange rate becomes less favorable to those converting foreign currency into Ghanaian cedis. As a result, some members of the diaspora choose to delay remittances, waiting for a better rate before transferring funds. This behavior, multiplied across thousands of people, can actually reduce the flow of foreign exchange into Ghana — a development that, ironically, can weaken the very currency they were worried about.
Conclusion
While the appreciation of the cedi may be celebrated domestically as a sign of economic strength, it presents a different story for Ghanaians abroad. For the diaspora, a stronger cedi means reduced remittance value, lower investment returns, and greater financial uncertainty. Their worries highlight an important truth: exchange rate movements have complex effects, benefiting some while disadvantaging others.
For those holding the steer, the challenge lies in ensuring that the cedi’s stability is driven by real economic growth, not short-term measures — and that the concerns of Ghanaians abroad, whose contributions are vital to the nation’s economy, are not overlooked in the pursuit of a stronger currency.
The writer holds Bachelor of Arts in Economics and a Master of Commerce in Banking and Finance and is currently an Economics Tutor in Wa Senior High School
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