David Ofosu-Dorte Warns of Potential Dollar Dumping Amid Cedi Appreciation
Executive Chairman of AB & David Law, David Ofosu-Dorte, has issued a cautionary note about the possible consequences of Ghana’s rapidly appreciating cedi, warning that it could trigger large-scale dollar dumping by financial institutions, which may destabilize the country’s financial markets.
Speaking during an analysis segment on Tuesday, May 27, 2025, Mr. Ofosu-Dorte explained that while the strengthening of the cedi against the US dollar is a positive development, it must be managed carefully to avoid unintended market disruptions.
I have a certain fear – if the dollar goes below a certain point, it may lead to a dumping of the dollar by financial institutions who hold large dollar reserves. We need to identify a stabilisation point to prevent market disruption,” he warned.
The Ghanaian cedi has appreciated by 22% since January 2024, making it one of the best-performing African currencies in recent months. This recovery has been driven by a combination of government fiscal measures, improved investor confidence, and reduced demand for foreign currency.
Despite this progress, Ghana’s inflation rate remains high at 23%, reflecting a mismatch between exchange rate gains and actual commodity prices on the market.
Reports from commercial banks indicate that dollar demand has dropped by 40% since March, with many financial institutions now holding strong dollar reserves. While importers are cautiously optimistic, they are still maintaining their dollar positions, waiting to see how the market settles.
Economists have urged caution, advising gradual dollar conversion rather than panic selling. Abrupt movements in currency trading, they warn, could easily erode recent gains and unsettle the local economy.
Beyond immediate market trends, Mr. Ofosu-Dorte called for long-term structural reforms to support Ghana’s economic transformation. Commenting on former President John Dramani Mahama’s eight-point reset agenda, which was presented at a summit the previous day, he noted a lack of specifics on how the agenda would address Ghana’s dependence on imports.
“We always talk about the fundamental changes we need in our economy. Our dependence on imports remains problematic. While boosting exports and manufacturing may reduce import dependency, I didn’t hear specific details on how this will be achieved,” he said.
He highlighted three critical areas that need attention: mindset change, policy consistency, and a clear stabilisation framework.
Mr. Ofosu-Dorte also addressed the psychological and behavioural patterns in Ghana’s economic culture, especially how businesses and consumers react to currency movements.
“When the dollar rises, we immediately adjust prices upward, but when it falls, we resist downward adjustments. This is an attitudinal issue in how we buy and sell,” he noted.
While advocating for policy-driven discipline rather than enforced controls, he emphasized the importance of having stable economic strategies that do not rely on IMF bailouts every seven years.
“The Governor mentioned the need for stability, which is good. But we need clear parameters to prevent volatile market reactions,” he concluded.
As Ghana navigates its current economic recovery, stakeholders are increasingly calling for a balanced approach—one that ensures short-term stability while laying the foundation for long-term economic resilience.