The Akans have a saying that the ‘the cane used to beat Takyi is the same cane to be used to beat Baah’. It is simply a call for fairness and objectivity. The mouth that chastises fairly must commend fairly. I have worked as a salesman, an operations head, a business development executive, a lead financial analyst, a finance engineer, a trade specialist, a group General Manager, a CEO, an advisor to Ministers across both sides of the political aisle, a lobbyist, a technology process designer and a multisector entrepreneur. But voluntary policy activism has been the most fulfilling part of my work and public life. Yet it is the most expensive. I get politically punished for it many a time and it is easily a thankless one. Sometimes the beneficiaries of the cause you fight for, easily turn their backs on you and you wonder why on earth you even doing this. They rally back when it all turns well. You see how mankind dey?
What is most amazing is how the public easily feel entitled to your advocacy and call you out when they feel you should be a leading one cause or the other. I understand their agitation. We have a voice because we have their ears. But it isn’t that simple. For some like us who have businesses to run and staff to guide and fend for, advocacy is not our mainstay. Public advocacy does not pay the bills. It is voluntary. It is a calling that must be balanced to sustain self and, in my case, a few hundred looking up to my leadership in business to realise their economic aspirations. Consequently, I CANNOT fight everything.
I therefore commend my fellow policy advocates who continue to hold our governments to account and shape the path of policy. This role is truly a calling. But that calling must be executed in humility, service, fairness and honesty. We are human. We make mistakes. And in true service to the public, we must admit and correct things when we err. We must commend what is right, condemn what is wrong and proffer what may be appropriate in honesty and without fear or favour. We also need to be aware, at all times, that our ideas may not be the best all the time.
Recently, Bright Simons on Newsfile and Point of View reported that his modelling showed that the bulk (55%) of the Cedi’s appreciation in 2025 was attributable to debt relief and IMF (see Fig 1). Upon further interrogation, he explained IMF to mean the IMF programme of which the debt restructuring is part. I intimated to him that from fundamental financial and economic principles, that could not be. I hoped that my brother would have taken some time to review his model and adjust it appropriately but somehow, he hasn’t. In any case I have requested that he make the ‘Model’ available to all for evaluation. It has been a week, and I am still waiting.
This piece is to correct the error of that narrative, educate the public and acknowledge what has been done right and/or wrong. It is unfair to assume that good things must always have a ‘foreign face’ to it. We have brains too (although sometimes, if not many, we act as though we don’t).
While the IMF engagement and debt relief clearly contributed to macroeconomic stabilisation, this article argues that they cannot plausibly account for the magnitude or timing of the 2025 appreciation of the cedi once standard asset-pricing logic and econometric reasoning are applied.
1.0 The Theories
The Efficient Market Hypothesis (EMH), first formalised by Eugene Fama in 1970, teaches us that financial markets rapidly and fully incorporate all publicly available information into asset prices. This basically says that financial markets, like the foreign exchange market, quickly take in all public information, such as government policies, IMF plans, and economic news to establish or forecast the exchange rate (FX rate). This means that the current exchange rate already reflects everything people know about money and the economy. So, for the exchange rate to change in a big way, there has to be new and unexpected news, not things that were already known.
For example, if you have dollars you wish to convert next month to pay fees and the Bank of Ghana comes to announce that it will be selling about two (2) billion USD dollars more than the markets need next month, what will be your natural reaction? The average person will realise, that the rate will likely fall so he/she will sell their dollars for cedis today at a relatively higher rate. But as many people react in the same fashion, the rate will fall quickly in a few days, and well before the BoG releases those dollars onto the market. What may reverse this new low rate will be news that may not have been expected. For example, if IMF issues a statement to stop BoG from selling that $2bn. ‘Wahala go gas’ and the Cedi’s gains will reverse. Abi?
According to economist Rudiger Dornbusch, exchange rates act like prices of assets, meaning they change today based on what people expect will happen with the economy and monetary policies tomorrow. In simple terms, the value of a currency is always looking ahead. It reflects what people think will happen in the future, not what has already happened.
In his well-known “Overshooting Model,” Dornbusch (1976) explains that exchange rates can sometimes react very quickly and strongly to sudden events or surprises. This happens because financial markets can adjust much faster than the real economy or government policies. So, exchange rates don’t just follow what governments do, they react most sharply to unexpected news, like changes in interest rates, sudden moves of money into or out of the country or shifts in how strong the U.S. dollar is globally.
Recent research from the IMF also supports this view. An IMF working paper by Bakker (2024) explains that changes in exchange rates come from two main sources: things we can predict (such as well-known government policies or expected economic trends) and things that are surprises (like unexpected news or unexpected changes in the world economy). This helps explain why exchange rates sometimes seem to move randomly but also sometimes follow patterns we can understand.
Putting it all together: The ideas from the IMF, Eugene Fama, and Dornbusch show us that the value of a currency is set by what people already know (like government plans or economic forecasts) but can change suddenly if something unexpected happens. In other words, currency values move for two main reasons:
- Changes that everyone expects (because of known policies or economic data)
- Surprises (like new government announcements, sudden changes in global markets, or unexpected economic reports)
This way of understanding currency movements is basic to how central banks and economists think about and explain what happens in foreign exchange markets.
2.0 Why IMF Cannot be the Reason?
When we apply Fama’s (1970) EMH and Dornbusch’s (1976) overshooting framework to Ghana’s FX market, it becomes clear that the IMF cannot be credited for the cedi’s sharp appreciation in 2025. All the IMF’s policies, conditions, and projections about Ghana’s economy were publicly available well before 2025 began. This means the market had factored their expected effects into the exchange rate. Both the IMF and independent analysts like Fitch Solutions forecasted a Cedi depreciation to the US dollar, with the IMF’s projection for 2025 at an average of about 15.95 cedis (cued from the IMF supervised budget for 2025) with Fitch’s forecast hovering around 15.5. This consensus was clear: The Cedi will depreciate, not appreciate. This is FACT not FICTION or personal MODELLING.
The cedi defied expectations and delivered the surprise of a remarkable appreciation of 29%. When a currency is much stronger than experts predicted, there has to be a clear reason. As we learnt from Fama’s (1970) EMH and Dornbusch’s (1976) Overshooting Model, the only way this can happen is if something new or unexpected takes place after those forecasts are made. In Ghana’s case, both the IMF’s support and the country’s debt restructuring were already announced and widely known before 2025. That means neither of these things can explain why the cedi suddenly did so well. They simply aren’t new or surprising enough to have caused it.
2.1 The IMF Forecast Error
For emphasis’s sake, let us revisit the IMF’s own forecast. At the end of 2024, the cedi stood at approximately GHS14.7 per U.S. dollar. Using full information on Ghana’s IMF programme (initiated in 2023) and the status of debt restructuring (completed by late 2024) among others, the IMF projected an average exchange rate of about 15.95 for the 2025 fiscal year.
Forecasts are hardly exact, so it is reasonable to allow for a margin of error of about plus or minus 5%. This brings the forecasted cedi to land anywhere between 15.15 and 16.75. However, in this case, the IMF’s central message remained clear: continued depreciation, not appreciation.
The cedi surprised everyone and remarkably appreciated against its major trading currencies, appreciating by 29% against the US dollar. It went from 14.7 to 10.45 to the dollar and averaged 12.53 for the year. That’s about 15% stronger than at the end of 2024, and more than 21% stronger than the IMF’s prediction. This was way outside any reasonable margin of error. Cuing from Fama (1970) and Dornbusch’s (1976), there was a surprise factor, something big and unexpected that happened which the IMF did not see coming in its forecast. Obviously, IMF cannot be the surprise!
Did the IMF not understand its own programme? Did the market not know about the IMF’s work and the debt restructuring? The answer is yes; they did. There was nothing new from the IMF in 2025 that the market did not already know. So, it does not make sense to say the IMF caused the cedi to so sharply appreciate. Borrowing the words of Yonny Kulendi (JSC), the 55% attribution to IMF for the Cedi appreciation is YaaMUTU!’ ‘MOOTINGLY MOOT’ and ‘DEADEDLY DEAD’!
At most, IMF support and debt relief can explain why the cedi did not depreciate further. They cannot logically explain a large forecast-defying appreciation even after allowing for reasonable uncertainty.
2.2 Did IMF News Cause the Cedi’s Exchange Rate to Change? (An Event-Study Approach)
To understand if the IMF’s actions directly affected the cedi’s value, economists use a simple method called an “event study.” This means checking if the exchange rate moved up or down right after big news about the IMF’s programme or payments were announced.
The logic is straightforward: If the IMF’s decisions really drove the cedi’s appreciation, we should see the currency get
stronger immediately after each IMF announcement.
In July 2025, we have two clear examples to test this idea:
- July 2, 2025: News outlets said the IMF would send about USD370 million to Ghana after a programme The exchange rate (interbank rate) was 10.32 cedis per US dollar on July 2 and stayed at 10.32 on July 3. There was no change.
- July 7, 2025: Bloomberg and others reported after U.S. market hours that the IMF had disbursed about USD367 million. The rate was 10.35 cedis per dollar before the news, and it remained 10.35 after. Again, there was no
These examples show that when IMF news came out, the cedi’s value didn’t move at all. If the IMF’s actions were the main reason the cedi got stronger, we would expect to see the exchange rate respond to these announcements. But the data say otherwise.
In summary, the evidence from these simple “event studies” suggests that IMF news did not cause the cedi’s sharp appreciation in 2025. Any claims that the IMF was the main driver of the currency’s strength don’t fit with what actually happened in the market.
2.3 The IMF’s Hand in the Recovery Story
Even as the narrative around the 2025 appreciation is being corrected, it is important to recognise the IMF’s constructive role in Ghana’s broader recovery. The truth is that when Ghana stood at the edge in 2022; when inflation raged, reserves thinned, and confidence evaporated, the IMF provided a handrail in the storm. Their programme provided a stabilising framework at a time when confidence was shattered, and policy credibility was in question. It helped restore order to the fiscal environment, supported the rebuilding of reserves, and offered a transparent roadmap that reassured both domestic and international stakeholders.
These contributions were essential in preventing a deeper crisis and in creating the macroeconomic stability within which Ghana’s own policy innovations could take root. It was not glamorous work, it was hard and painful, but it was necessary work. The IMF helped us stop the bleeding so that our own reforms could begin to heal the body.
It is in this wider recovery story that the crucial value of the IMF’s impact must be placed. Undoubtedly, the IMF and debt relief have been crucial to our stabilisation. But stabilisation is not propulsion. A handrail keeps you from falling; it does not lift you up the staircase. By the time 2025 arrived, every IMF condition, every debt‑relief milestone, every policy anchor was already public knowledge, it had been priced in, analysed, debated, and absorbed by the market. Nothing in the IMF programme was new enough, surprising enough, or forceful enough to generate the sharp, forecast‑defying appreciation we witnessed. That appreciation came from effective internal leadership, fresh discipline, new coordination, unexpected inflows, and a global gold wind that blew in our favour.
The IMF helped us stand, yes. But the run of 2025 was powered by Ghana’s own legs.
3.0 What Shocks accounted for the Appreciated Cedi?
Increased Fiscal Discipline.
1.8 primary surplus vs IMF 1.5%.
-1.8% overall balance vs IMF’s
-2.7%
Tighter than projected Monetary Policy Management
Stronger FX regulation enforcement and monitoring
Gold prices
44% increase in prices
Higher than expected official gold exports (GoldBod)
Official ASM Gold exports exceeded projections by 51%.
4.0 Conclusion
- The IMF forecast suggested that the Cedi would depreciate in 2025, not The significant appreciation actually observed was therefore a major and notable forecasting error. Both basic asset-pricing principles and event studies show that the appreciation cannot be credited to anticipated IMF programmes or debt restructuring.
- While IMF support has stabilized the broader economic setting and lowered risks, the timing, scale, and sustained nature of the Cedi’s appreciation in 2025 must be credited to new policies and actions taken during 2025, rather than to previously expected/known factors.
- The positive shocks that account for the cedi’s appreciation are broadly down to endogenous and exogenous
factors.
- Endogenous: Effective management and innovation by the Ministry of Finance, Bank of Ghana and the GoldBod have been key. The cooperation and coordination of both fiscal and monetary policy is the best we have seen in decades. We must commend them.
- Exogenous: A rally in gold prices, paired with increased official gold exports enabled by GoldBod, created opportunities (dollar inflows) for effective market interventions by the Bank of
We should commend our leaders as quickly and openly for their successes as we criticize them for their shortcomings. Just over a year ago, many of us (business executives, owners, analysts and politicians) used to say that the next Finance minister and Governor had a herculean and impossible task ahead. They have faced it; they have fought it and today we have stability we didn’t envision. Let’s give credit to whom credit is due. Our people have shown they have brains too. As the 1st Dep. Governor, Dr. Zakari, often questions, “if our mothers took us to school and we cannot use our knowledge to help and transform society, then of what good was schooling?” With what we have seen, the schooling is working.
The Ministry of Finance and the Bank of Ghana led by H.E. the President have done well. I commend them. Having said that, these successes remain less structural and hence the question, how would we sustain the progress made? The BoG Governor, Dr. Asiamah, rightly put it when he said, “let us not mistake improvement for permanency. A currency remains strong only when the real economy beneath it is productive, only when the economy beneath it is competitive and only when the economy beneath it is disciplined”.
PS: We are not masters of everything. When we do not know, we should ask. When we get it wrong, we should admit and amend. This engenders trust with the people. Defending pride instead of truth, dissipates trust. We are not always the brightest in the room!
GeePapa
Senyo K. Hosi
Entrepreneur, Finance & Economic Policy Analyst
11th Jan 2026
References
- https://brightsimons.com/2025/12/is-talk-of-losses-by-goldbod-just-abstract-drivel/
- https://www.imf.org/en/news/articles/2025/07/07/pr-25242-ghana-imf-completes-the-4th-review-under-the-ecf-arrange
- THE 2025 BUDGET STATEMENT AND ECONOMIC POLICY OF GOVERNMENT (Government of Ghana)
- https://www.reuters.com/world/africa/imf-approves-367-million-disbursement-ghana-after-fourth-review-2025-07-07/
- https://www.bloomberg.com/news/articles/2025-07-07/ghana-unlocks-367-million-disbursement-from-imf-after-review?embedded-checkout=true
- https://africa.businessinsider.com/local/markets/imf-to-disburse-dollar370m-to-ghana-after-fourth-programme-review/lbkfe55
- https://www.bog.gov.gh/treasury-and-the-markets/historical-interbank-fx-rates/
- Dornbusch, Rudiger (1976). “Expectations and Exchange Rate ” Journal of Political Economy, 84(6), 1161–1176.
- Bakker, Bas (2024). Reconciling Random Walks and Predictability: A Dual-Component Model of Exchange Rate Dynamics. IMF Working Paper 2024/252. Reconciling Random Walks and Predictability: A Dual- Component Model of Exchange Rate Dynamics
- Yoldas, Emre (2024). Monetary Policy and Exchange Rates During the Global Federal Reserve FEDS Notes.
