Opposition Critic Challenges Government’s Exchange Rate Intervention Strategy

Dennis Miracles Aboagye, Communications Director for the Dr Mahamudu Bawumia campaign, has levelled criticism at the government’s approach to exchange rate management, arguing that the cedi’s recent strength reflects artificial manipulation that benefits certain businesses whilst leaving consumers disadvantaged. His comments add a political dimension to an ongoing economic debate about the balance between currency intervention and market flexibility.

Aboagye contends that the government is manipulating the dollar rather than allowing market forces to determine exchange rates. He argues that only businesses are benefiting from what he terms “artificial manipulation” whilst consumers bear the brunt, explaining that businesses avoid reducing prices because they fear the exchange rate will reverse suddenly and destroy their capital.

The specific technical criticism centres on exchange rate volatility masquerading as stability. Aboagye highlighted that the dollar moved from 14.5 cedis to 10 cedis within three months, then reversed back to 13 cedis within five weeks, requiring another $1 billion central bank injection to move the rate back to 10 cedis. He argues this pattern demonstrates intervention-driven movement rather than sustainable stability, and contends that predictability matters more to businesses and households than artificially suppressed rates.

The challenge Aboagye identifies reflects an existing economic tension. When exchange rates appear artificially controlled, businesses rationally resist passing import cost savings to consumers, anticipating rate reversals that would compress their profit margins. This phenomenon, commonly observed in emerging markets experiencing intervention-heavy policies, can limit the consumer benefits that would normally flow from lower import costs.

The government’s official position emphasises the necessity of exchange rate management to support macroeconomic stabilisation. The Bank of Ghana has consistently articulated that its intervention strategy balances market forces with measured central bank action, citing the need to maintain reserves, control inflation, and manage Ghana’s external vulnerabilities as a commodity-exporting economy.

The cedi’s performance provides context for both perspectives. Aboagye acknowledged in May 2025 that the government of the day bears responsibility for the cedi’s performance, including its recent appreciation, a statement that partially undercuts his current criticism whilst indicating shifting assessments of administration responsibility.

The cedi has appreciated substantially in 2025, becoming one of the world’s best-performing currencies with a 21 percent year-to-date gain as of October 2025. This performance reflects multiple factors including gold export inflows through Goldbod, international commodity prices favouring Ghana’s primary exports, and tighter monetary policy sustaining demand for cedis amongst international investors.

However, the exchange rate stability achieved has come alongside documented forex market fragmentation. Multiple exchange rate tiers have emerged, with documented discrepancies reaching 35 percent between interbank rates and forex bureau rates, creating confusion and inefficiency in the forex market. This fragmentation complicates business planning and disadvantages smaller enterprises lacking access to privileged interbank rates.

Aboagye’s broader critique reflects opposition party positioning ahead of Ghana’s 2024 election aftermath and ongoing National Patriotic Party flagbearer dynamics. His criticism follows a pattern where exchange rate performance has become a proxy for assessing broader economic competence, with different political actors interpreting the same data through divergent lenses.

The World Bank and International Monetary Fund have urged Ghana toward more transparent, rules-based exchange rate frameworks rather than discretionary intervention. Both institutions have acknowledged that while exchange rate management can support near-term stability, excessive intervention risks undermining longer-term market confidence and economic flexibility.

The practical consumer experience remains contested. Businesses in import-dependent sectors like furniture, electronics, and automotive goods have reduced prices following cedi appreciation, signalling that some pass-through does occur. However, transportation, food, and healthcare costs have not declined proportionally, reflecting factors including specific policy choices like fuel levies, supply chain constraints, and structural inflation that operate independently of exchange rates.

The political dimension of this debate centres on whether exchange rate stability achieved through active intervention represents genuine macroeconomic progress or temporary benefit that will eventually unwind. Aboagye’s framing suggests the latter, arguing that artificial interventions cannot sustain indefinitely and that when corrections occur, they will expose underlying weaknesses in productive capacity and real economic fundamentals.

Read His Full Post Below

When you achieve stability, I will apologise. For now, we don’t even know what to plan with… the dollar moves from 14.5 in 3 months to 10cedis and then within 5 weeks it moves back from 10cedis to 13 cedis then you inject another $1billion to move it back from 13 to 10 cedis……

— Dennis Edward Aboagye (@DennisMiracles) October 19, 2025