By Prince Ahenkorah
Predictions of the cedi’s demise are once again animating market chatter, but the latest forecast from Databank Research offers a more measured, if cautious, prognosis for Ghana’s currency in 2026. In its newly released Economic Outlook, the Accra-based financial services group projects a controlled depreciation, with the cedi forecast to settle at GH¢12.85 to the US dollar by year-end a modest 7.2 per cent slide, barring any systemic shocks.
This projection is far from a clean bill of health. Databank’s analysts point to familiar domestic pressure points that will continue to test the Bank of Ghana’s (BoG) mettle. The perennial demand from bulk importers, the hard currency requirements for energy sector payments, and the looming overhang of external debt service obligations, including Eurobond repayments, are all expected to weigh heavily on the local unit.
However, the counterweight to these pressures, according to the report, lies in the government’s flagship resource-backed initiative. The forecast is predicated on the steady performance of the GOLDBOD programme, anticipating consistent monthly inflows of approximately GH¢750 million.
This quasi-fiscal mechanism, coupled with ongoing efforts to sanitise the small-scale mining sector, is seen as the critical buffer. The logic is straightforward: sustained gold purchases by the central bank provide a reliable anchor for foreign exchange reserves, enabling the BoG to manage market expectations and smooth out the volatility that has historically plagued the cedi.
The report also casts an eye beyond the domestic horizon, identifying a confluence of factors that could bolster sentiment. Continued engagement with the International Monetary Fund and the World Bank is deemed essential for maintaining the investor confidence that underpins currency stability.
More intriguingly, Databank ventures into the geopolitics of finance. It notes a strategic pivot by some global central banks led by China away from the US dollar and towards gold, a trend accelerated by uncertainty over American monetary policy.
This de-dollarisation undercurrent feeds into a more speculative, yet potentially transformative, scenario: the ongoing discussions within international financial bodies to reclassify gold from a Tier 1 asset to a High-Quality Liquid Asset (HQLA).
Should this reclassification gain traction, its implications for Ghana could be profound. Granting gold HQLA status would allow it to be used as eligible collateral in repo financing, fundamentally enhancing its monetary role.
For a gold-producing nation like Ghana, this could mean its reserves pack a greater punch, reducing the systemic dominance of the dollar and indirectly providing a structural buttress for the cedi.
The report is careful to temper this optimism. It acknowledges that such a structural shift remains a “low-probability scenario” in the short term, given the complex deliberations within the BRICS bloc and lingering concerns over gold’s price volatility, custody, and the inherent trust required in repo markets.
For now, the cedi’s fate rests on the more prosaic yet equally challenging task of sustaining gold inflows and navigating the perennial demands of an import-dependent economy.