They maintained that most businesses or traders were still selling old stock that they had acquired at higher exchange rates, which would most likely delay any immediate price adjustments in response to currency movements.

The players, including the Association of Ghana Industries (AGI) and Ghana National Chamber of Commerce and Industry (GNCCI), two groups that represent a large segment of manufacturers and traders in the country, explained that prices of goods in the Ghanaian market were driven by multiple factors, including transportation costs, import duties and overhead expenses, with the exchange rate being just one of several influencers.

Those who spoke on behalf of the trade associations are the Chief Executive Officer (CEO) of Association of Ghana Industries (AGI), Seth Twum-Akwaboah, and the CEO of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye.

The Dean of the University of Cape Coast School of Business, Professor John Gatsi, corroborated the position of the market, stating that a meaningful reduction in prices would only occur if the cedi’s appreciation was sustained over a longer period, to give businesses the confidence to revise their pricing structures accordingly.

The Ghana cedi extended its upward momentum against major trading currencies into the third week of May, showing significant appreciation since March this year.

Data from the Bank of Ghana (BoG) showed that the cedi strengthened from GH¢15.53 to GH¢13.09 per dollar on the buying rate between March 12 and May 12, 2025, while the selling rate improved from GH¢15.55 to GH¢13.10.

Similar gains were recorded against the pound sterling, with the buying price rising from GH¢20.09 to GH¢17.42 and the euro from GH¢16.96 to GH¢14.74 over the same period.

Analysts, including Databank Research, attribute the cedi’s continued resilience to strong central bank support and improved sovereign credit ratings, projecting further stability. Bloomberg has also named the cedi the world’s best-performing currency this month, reinforcing optimism within the country’s financial sector.

The Ghana Union of Traders’ Associations (GUTA) has also appealed to “the trading community to adjust prices of goods and services to share the significant gains made by the appreciation of the cedi against the major trading currencies and bring some relief to the consuming public”.

Explaining the factors anchoring the cedi’s strength, Prof. Gatsi said the recent appreciation of the cedi was because the handlers of the economy had put their house in order and were confronting the economic challenges with measures that were potent and yielding results.

The economist and finance lecturer explained that the management of the cedi from the perspective of the accumulation of currency under the Ghana Gold Board (GoldBod) gold purchase agreement was also yielding good results in support of the currency.

“We also know that globally, the currency of the US is not performing well against global currencies as a result of the trade war, and that is giving some respite to the currency, but you can only take advantage of that when you have good measures in place,” Prof. Gatsi explained.

“We can see that the currencies of countries around us are not performing as ours is doing, because they have not taken steps to take advantage of the weakened dollar. 
Of course, our expectation is for us to get to a point where the cedi will stabilise at a rate where everybody will appreciate,” he said.

Prof. Gatsi said the decision of businesses to maintain their current prices was a rational economic behaviour, given that they procured or shipped in their goods at a higher exchange rate and would incur losses if prices were reduced prematurely.

“It is unlikely that rational importers will lower prices until they replenish their stock at the new, lower exchange rate, thereby absorbing the cost savings.

“So, it is all about sustaining the gains the cedi has made. Maybe when sustained, there will be a new run of imports into the country or there will be a new run of production costs that will be lower, and all these things will reflect in prices going forward,” the professor of finance said.

For his part, Mr Twum-Akwaboah of the AGI said the recent appreciation of the cedi was a positive development because it would impact on the confidence in the economy.

“For us, it is a welcome development. Anytime the cedi depreciates, we complain because it affects the cost of production since we import a lot of our raw materials.

“When the local currency depreciates, we need so much cedis for the same amount of dollars and, therefore, the cedi appreciating shows a level of stability and it is a positive development,” he said.

Mr Twum-Akwaboah pointed out that some of the measures being implemented by the government had contributed to the cedi’s appreciation.

“These include interventions by the Bank of Ghana and the government's commitment to prudent fiscal management, all of which are supporting macroeconomic stability. This contribution is significant and should be duly recognised,” the CEO of AGI said.

However, Mr Twum-Akwaboah stated that pricing was influenced by multiple factors and that the exchange rate was only one part of the equation.

He said the impact of the cedi’s strength varied, depending on each company’s production setup.

For firms less reliant on imports, exchange rate fluctuations have a minimal effect on their pricing decisions, meaning a rise or fall in the cedi may not significantly alter their prices.

“There are also those who are import-dependent and, therefore, because they import the bulk of raw materials, the exchange rate impact on their pricing is huge,” Mr Twum-Akwaboah stated.

“In that case, if there is a significant reduction in that exchange rate cost, and that is by way of appreciation of the cedi, then eventually it should impact the pricing.

The question now is the timing, one will have to be a bit cautious,” he added.

For Mr Badu-Aboagye of the GNCCI, the trends were vital for business planning, sourcing inputs and attracting investment.

“For us, it is very good news. For the past four years, we have been complaining about the rapid depreciation of the currency and the fact that it was really affecting our operations.

“A lot of our businesses have lost their capital but due to this phenomenon, they are importing again. One challenge we had in the past was the volatility, which does not help in planning,” the CEO of GNCCI said.

Mr Badu-Aboagye, however, stated that the primary concern of businesses remained the sustainability of the local currency’s stability.

“Businesses need a stable currency to make informed decisions, plan investments and project costs effectively. Short-term improvements, though welcome, are not sufficient for long-term growth and resilience,” he added.

Mr Badu-Aboagye, however, stated that traders who imported goods solely for resale might quickly lower prices in response to exchange rate gains.

However, he said those holding inventory purchased at the old exchange rate may not immediately reduce prices, as they had already invested in those goods.

“It is unfair to expect traders who bought stock at a higher rate, potentially over a year ago, to absorb the loss by lowering prices.

Manufacturers, on the other hand, consider multiple factors beyond exchange rates when determining prices, such as utility costs, which also impact their pricing decisions,” he said.

The President of GUTA, Joseph Obeng, in a statement issued over the weekend, said the steady appreciation of the cedi since January had boosted business confidence and offered relief to the economy.

GUTA commended BoG for its effective foreign exchange management, acknowledged the government's fiscal discipline as a key contributor to the progress and called on both ends to sustain efforts, as continued stability could drive full economic recovery, enhance business competitiveness and help reduce the cost of living.