he cedi’s rebound and the hedging instinct: Why gold, not dollars, is the patriot’s safe havent

By  Ishmael Yamson

In late 2025, Ghana’s macroeconomic indicators are flashing green in a way we haven’t seen for years. Inflation has cooled to 5.4% as of December, and the Cedi has staged a remarkable recovery, appreciating significantly against the US Dollar in the first half of the year. For a nation that stared into the abyss of hyperinflation just two years ago, this stabilization is nothing short of a triumph.

However, in the quiet corners of Accra’s boardrooms and trading floors, a different conversation is taking place. It is a conversation born of trauma. After decades of cyclical depreciation, the Ghanaian investor psyche is deeply scarred. History has taught us that periods of Cedi stability are often fleeting, followed by sharp corrections. Consequently, the current strength of the Cedi is being viewed by some not as a victory, but as a “selling opportunity.”

The logic—flawed but understandable—is that the Cedi is currently “expensive,” and the Dollar is “cheap.” Commentators and private investors alike are whispering that now is the time to hedge against medium-term depreciation risks by converting Cedi liquidity into US Dollars.

While there is a kernel of rational hedging strategy in this view, I argue that succumbing to this temptation is a strategic error for the investor and a systemic risk for the economy. There is a superior alternative sitting in the vaults of the Bank of Ghana (BoG), waiting to be properly utilized: The Ghana Gold Coin (GGC).

The Psychology of the “Dollar Trap”

To understand why the Gold Coin is the solution, we must first dissect the problem. The demand for US Dollars in Ghana has rarely been solely about trade financing. A significant portion of dollar demand is speculative and precautionary. It is wealth preservation disguised as currency trading.

When the middle and upper classes lose faith in the Cedi as a store of value, they dollarize. They stuff Franklin notes under mattresses or move funds into offshore accounts. This creates a self-fulfilling prophecy: the fear of depreciation drives demand for dollars, which in turn causes the very depreciation they fear.

In 2023, this behaviour led to what I have termed the “Panic Penalty.” Investors who fled to the dollar at the peak of the crisis (rates ~15.00) locked in capital losses of nearly 26% when the Cedi appreciated in 2025. Yet, despite this recent lesson, the “muscle memory” of depreciation is strong. As the Cedi strengthens, the impulse to “buy the dip” in Dollars is re-emerging.

If unchecked, this behaviour could undo the hard-won gains of the Ghana reset and the IMF programme. It creates artificial pressure on the exchange rate that has nothing to do with economic fundamentals and everything to do with fear.

Beyond the Binary: The Spectrum of Wealth Creation

Before we position gold as the sole remedy, it is crucial to correct a false dichotomy often presented by commentators: that the Ghanaian investor’s choice is strictly between holding Cedis (cash) or buying Dollars. In reality, the local financial market offers a robust spectrum of wealth-preservation tools that far outperform idle cash and support the national economy.

The Ghana Stock Exchange (GSE), for instance, has consistently offered avenues for capital appreciation. Equities in banking, telecommunications, and manufacturing allow investors to own a slice of productive economic activity. Similarly, fixed-income securities, mutual funds, and real estate offer yields and asset growth that often outpace inflation. These options are vital because they retain capital within the economy, funding business growth, housing, and infrastructure.

However, the specific “itch” that dollar-hoarding seeks to scratch is not just growth—it is pure currency hedging. The dollar buyer is specifically looking for an asset that holds value independent of local commercial risk or interest rates.

This is where the Ghana Gold Coin (GGC) distinguishes itself. While equities and bonds build the economy, the Gold Coin offers a unique strategic opportunity for the Central Bank to manage the currency itself.

The Golden Alternative: A Hedge Without the Harm

This is where the Bank of Ghana’s Gold Coin initiative, launched in late 2024, moves from being a novelty to a critical instrument of monetary policy.

The GGC is minted from responsibly mined Ghanaian gold, refined to 99.99% purity. It is available in three denominations—1 ounce, 1/2 ounce, and 1/4 ounce—making it accessible to a range of investors. But its true value lies in its purchase mechanism.

The GGC is purchased with Ghana Cedis.

This distinction is profound. When an investor buys US Dollars as a hedge, they are effectively betting against the Cedi. They are selling local currency to buy a foreign asset, exerting downward pressure on the Cedi’s value.

However, when an investor buys a Ghana Gold Coin:

1. Liquidity Mop-Up: They transfer Cedis to the commercial bank, which transfers them to the Bank of Ghana. This removes excess liquidity from the economy, reducing inflationary pressure (Money Supply M2).
2. No Pressure on Reserves: Unlike a dollar purchase, this transaction does not deplete the nation’s Net International Reserves (NIR). The central bank does not need to sell dollars to satisfy the investor; it simply hands over a physical asset it already controls.
3. Global Store of Value: The investor receives an asset (Gold) that is priced globally in dollars. If the Cedi depreciates, the value of the gold coin in Cedi terms rises. It provides the exact same hedge against depreciation as holding physical dollars, but without the economic sabotage associated with dollarization.

The “Gold Standard” for Personal Wealth

For the investor, the Gold Coin offers a unique proposition that the Dollar cannot match.

1. Inflation Proofing: While the US Dollar is a strong currency, it is still a fiat currency subject to its own inflationary pressures (US inflation). Gold, historically, preserves purchasing power over centuries. In an era of global geopolitical instability, gold is the ultimate safe haven.
2. Eliminating Counterparty Risk: Holding physical gold coins eliminates bank failure risk. Unlike a foreign currency account which is a liability of the bank, the coin is a bearer asset. For the upper-middle class demographic focused on wealth preservation (as identified in our “Fractured Fortunes” analysis), this tangible security is attractive.
3. The Patriot’s Hedge: There is a moral dimension here. Investing in the GGC allows a Ghanaian to hedge their wealth without betting against their country. It is a way to say, “I am prudent about my finances, but I am also invested in the stability of our national currency.”

The Security Paradox: Moving Gold from the Mattress to the Ledger

While the economic case is clear, we must address the practical realities of owning physical gold. For the average household, physical possession introduces a new layer of risk: Security.

Just as “mattress banking” with cash invites burglary, storing high-value gold coins at home creates a physical safety threat. A single ounce coin, though small, represents significant wealth. For many, the cost of installing a secure home safe or paying for private vaulting erodes the utility of the hedge.

This brings us to the optimal solution: Custodial Ownership.

The future of this programme should not rely on citizens carrying bags of gold coins out of banking halls. Instead, the gold should remain exactly where it is safest—in the fortified vaults of the Bank of Ghana or accredited commercial banks. The investor should purchase the title to the gold, not the physical hassle of securing it. This model of “allocated storage” allows households to own the asset without incurring the physical risk, mirroring the safety of a savings account but with the inflation-proofing of bullion

Democratising Gold: The Case for a Digital Stablecoin

However, we must address a critical structural flaw: The Barrier to Entry.

Currently, the smallest denomination of the GGC is the 1/4 ounce coin. At current global gold prices, this single coin costs upwards of GHS 10,000. While this price point is accessible to High Net-Worth Individuals (HNWIs) and corporate treasurers, it effectively excludes the vast majority of the Ghanaian population. The market woman in Makola, the nurse, and the SME owner—the very people most vulnerable to inflation—are priced out of this “Patriot’s Hedge.”

To achieve mass adoption and truly break the cycle of dollarisation, the Bank of Ghana must evolve the GGC from a physical asset into a digital one. We need a Ghana Gold Stablecoin.

By tokenising the gold held in its vaults, the BoG can allow for fractional ownership. Instead of needing thousands of Cedis to buy a coin, a citizen could purchase GHS 100 worth of digital gold via their mobile money wallet.

Why a Stablecoin Changes the Game:

• Micro-Transactions: A digital ledger allows for divisibility down to GHS 0.01. This transforms gold from a static store of value into a dynamic medium of exchange. A cocoa farmer could save GHS 50 a week in gold, protecting his harvest income from inflation without ever seeing a vault.
• Deepening Inclusion: This effectively democratises the hedge. It allows the unbanked and underbanked to participate in the gold economy, moving them away from risky informal savings schemes.
• Liquidity & Velocity: A gold stablecoin could be traded 24/7, peer-to-peer. It could be used to settle debts or pay suppliers, creating a parallel, inflation-resistant rail for commerce that stays entirely within the domestic financial ecosystem.

The Missed Opportunity: Marketing the Coin

Despite these clear advantages, the uptake of the Gold Coin has been steady but not transformative. The temptation to buy dollars persists. Why? Because the Dollar is familiar, liquid, and easy to understand. Gold feels esoteric to the average saver.

The Bank of Ghana has a tremendous opportunity—perhaps a duty—to aggressively market the GGC to the segment of the population currently eyeing the dollar market. The central bank needs to shift its messaging from “Gold as a Collectible” to “Gold as the Superior Hedge.”

Strategic Recommendations for the BoG:

• Ease of Access: Currently, the process involves commercial banks opening gold accounts. This friction must be reduced. The purchase process should be as seamless as buying a Treasury Bill on a banking app.
• Liquidity Guarantee: The BoG must heavily publicize its buy-back guarantee. Investors hoard dollars because they know they can sell them at any forex bureau in minutes. The GGC needs a similar perceived liquidity. The public needs to know that they can walk into a bank and liquidate their coin for cash instantly at the day’s spot rate.
• Targeted Education: A campaign specifically targeting the middle and upper class—explaining the “Panic Penalty” of dollar holding versus the stability of gold holding—is essential. Show the math. Show how gold has performed against the Cedi over a 10-year horizon compared to the Dollar.

Conclusion: Breaking the Cycle

The appreciation of the Cedi in 2025 is a fragile flower. It can be crushed by the heavy boots of speculation if we allow the old habits of dollar hoarding to return.

The commentators are right to worry about the “temptation” to hedge. But they are wrong to assume the Dollar is the only answer. We have the resources within our own borders to secure our wealth.

By effectively marketing the Ghana Gold Coin, the Bank of Ghana can achieve a dual victory: providing citizens with a world-class store of value while simultaneously sterilizing liquidity and protecting the currency. It is time for Ghanaian investors to stop looking to Washington for safety and start looking to the ground beneath their feet. Gold is the answer.

About the Author

Ishmael Yamson is a seasoned strategic leader with over three decades of experience spanning finance, technology, and media. As President & CEO of Ishmael Yamson & Associates and CEO of Nosmay Holdings, he uniquely bridges the gap between macroeconomic strategy and digital transformation, advising organizations on navigating volatile markets and optimizing operational efficiency, effective change management and governance.

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