BoG Governor: Cedi Appreciation Causes 50% Drop in Remittances
Diaspora halts money transfers amid strengthening local currency
- Remittances drop nearly 50% amid cedi appreciation
- Ghanaians abroad pause money transfers for local projects
- BoG plans diaspora outreach to address misconceptions
Governor of the Bank of Ghana, Dr. Johnson Asiama, has revealed that the sharp appreciation of the cedi has unexpectedly led to a nearly 50% drop in remittance inflows from Ghanaians abroad.
Speaking at the launch of the Bank of Ghana Chair in Finance and Economics at the University of Ghana, Dr. Asiama explained that many members of the Ghanaian diaspora have paused sending money home for personal projects, interpreting the cedi’s surge as a reason to wait.
“The cedi’s appreciation has been misunderstood by many Ghanaians abroad. People who used to send money for building and other projects have stopped, leading to a significant decline in remittances,” he noted.
The local currency has gained over 40% against the US dollar, 31% against the British pound, and 24% against the euro in recent months, driven by stronger macroeconomic indicators, declining inflation, and solid foreign reserves.
While celebrating the currency’s performance as a sign of confidence in Ghana’s economic direction, Dr. Asiama warned of the unintended behavioral effects. He suggested that a targeted outreach campaign be launched in major diaspora hubs to clarify the implications of the strong cedi and encourage continued remittance support.
He added that declining inflation should also result in lower building material costs, such as cement, thereby maintaining balance for local project costs.
