When Strong Cedi Becomes a Threat to Trade: Local Businesses Now Uncompetitive Under AfCFTA

In an ironic twist, the strengthened Ghana cedi is fast becoming a stumbling block for local businesses trying to compete across Africa, particularly under the African Continental Free Trade Agreement (AfCFTA).

This is the observation of the Financial Advisory Partner and Africa Infrastructure Lead at Deloitte Ghana, Yaw Appiah Lartey.

Speaking at the UPSA Law School–ABSA Quarterly Banking Roundtable, Yaw Appiah Lartey, revealed that a strong cedi might be great for imports, but it’s bad for exports and worse for regional competitiveness.

The finance expert shared his personal experience to buttress his case. “Last two weeks I was in Nigeria, I bought a Kaftan and when I converted it was just about 150 Ghana cedis. Do you buy a Kaftan here for 150 Ghana cedis? and you ask yourself, what’s the reason? The reason is that your currency has strengthened, and so when you convert the Ghana cedi to the Naira, you get a lot of Naira.”

When a Strong Currency Becomes a Competitive Weakness

Strong currencies are often celebrated for their ability to reduce import costs and stabilize inflation.

But Yaw Lartey reveals that in a continental trade zone like AfCFTA, where price competitiveness is king, the cedi’s appreciation is pricing Ghanaian businesses out of the market.

A Ghanaian clothing manufacturer, for instance, may now find it harder to sell in Nigeria or Côte d’Ivoire, not because the product quality is inferior, but because the same product now costs more in local currency terms.

If Ghanaian goods are more expensive, and the already high taxes are added, Yaw Lartey says Ghanaian businesses cannot expect to compete with a Nigerian or Ivorian business selling in the same space.

Ghana’s AfCFTA Advantage at Risk?

AfCFTA has been touted as Africa’s boldest economic integration experiment, promising zero tariffs and open borders for over 50 countries. Ghana, as host of the AfCFTA Secretariat, is supposed to be leading the charge.

But instead of leveraging this advantage to expand exports, Ghana’s appreciated cedi may be unintentionally closing the price gap in favor of other African nations, leaving Ghanaian businesses stuck between a strong currency and shrinking regional demand.

He was, however, quick to add that not everyone loses. Businesses with costs denominated in dollars, such as importers, multinationals, or firms repaying foreign loans, benefit from the stronger cedi, as they now need fewer Ghana cedis to meet those obligations.

But for local producers trying to break into continental markets or compete on price, the appreciation spells disaster. It turns their competitive advantage into a currency handicap, undermining the very goals of intra-African trade.

 Rethinking Currency Policy

Yaw Lartey is therefore calling on the Bank of Ghana to ensure the stability of the currency instead of focusing on appreciation.

He says currency strength is not always economic strength, especially in a regional market. For Ghana to reap the full benefits of AfCFTA, policymakers may need to shift focus from appreciation to strategic stability, one that balances inflation control with export competitiveness.

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