When Currencies Move Fast: What Ghana’s Cedi Appreciation Teaches Us About Managing Foreign Exchange Risk

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Ghana's 25% appreciation of the Cedi against major currencies like the US Dollar and British Pound in May 2025 caught global attention. 

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If you’re a business trading internationally, rapid currency movement—whether up or down—can be a hidden threat if you’re unprepared.

The Ghana Cedi Appreciation

The cedi's surge is impressive, but it also creates real headaches for businesses with international contracts, such as with foreign suppliers.

Imagine: 

• As is currently the case for some Ghanaian businesses - You have a USD- denominated supplier agreement, under which you made a payment when the exchange rate was 15 GHS to 1 USD. Now the exchange rate is 11 GHS to 1 USD, and local customers are insisting on paying a lower local rate for goods, even though you purchased the asset for more in the local currency. 
  

• Or imagine the reverse currency situation, you agree to pay your supplier 100 USD per item when the exchange rate is 11 GHS to 1USD, but at the time you make payment the exchange rate has now changed to 15 GHS to 1USD.

  
  

In both scenarios, suddenly, your margins are squeezed—and your forecasts are off.  Legal Challenges with Currency Fluctuation

If you’re buying and selling in different markets or in different currencies – a number of challenges can arise from rapid currency movement:

• Fixed-Price Contracts Without Currency Adjustment Clauses

  Businesses can be left exposed when exchange rates move, especially if pricing or payment terms are rigid.
  

• Payment Delays or Disputes

  Buyers may delay payments when the exchange rate changes are not in their favour or try to renegotiate mid-contract.
  

• Regulatory or Tax Implications

  Gains or losses from currency shifts can trigger unexpected accounting or tax issues across jurisdictions.
  

How to Protect Your Business from Currency Fluctuations

Managing exchange rate volatility isn’t just something your finance team should worry about — it’s a commercial and operational priority that directly affects how your contracts perform in real life. If your business trades in or with markets that experience rapid currency fluctuations — such as Ghana and the Cedi — the financial impact can be immediate and high.

A contract drafted without considering currency movements can wipe out your margins overnight, turn profitable agreements into losses, and strain relationships with partners or suppliers. Yet many businesses continue signing contracts that leave them fully exposed.

This is why proactively negotiating contracts with currency variation protections is essential, including for founders, CFOs and commercial teams working across or with counterparties in Africa.

To protect your revenue and maintain stability so you don't lose revenue overnight, consider strengthening your contracts in the following areas:

·         Consider having currency adjustment clauses in your contracts

·         Choose the right currency in your contracts

·         Plan for currency risk in expansion or when buying or selling in different markets

·         Agree on how you will handle payment disputes

Currency Adjustment Clauses to Safeguard Your Revenue

A well-drafted currency adjustment clause can prevent unexpected losses when the exchange rate shifts. These clauses can:

• Automatically adjust pricing based on agreed reference rates

• Share currency movement risk between buyer and seller

• Trigger renegotiation if volatility exceeds a certain percentage

• Protect your margins while keeping your pricing fair and transparent

Without these protections, even a small fluctuation can significantly reduce the value of your contract — especially for long-term agreements, subscription models, or recurring supply contracts.

Choosing the Right Contract Currency From the Start

Selecting the right currency for contract payments is a strategic choice that can significantly reduce risk. Consider questions such as:

• If you are restricted from doing so in your country, should you price in a stable currency (USD, EUR, GBP) rather than a volatile one?

• Will your customers or suppliers push back if the contract is not denominated in their local currency?

• Is your business prepared to absorb FX losses if the local currency depreciates?

• If you are permitted to do so in your country, should you offer dual-currency pricing?
  

Your currency choice affects not just financial stability — it impacts competitiveness, pricing strategy and customer perception.

Factor Currency Risk Into Expansion, Imports, Exports, and Cross-Border Deals

If you're buying, selling, manufacturing or expanding into new markets, currency risk should form part of your expansion strategy and operational planning.

Make sure your contracts reflect:

• Where the ultimate delivery or supply will take place

• How fluctuating import costs will be handled

• Whether FX risk sits with your company or your partner

• How long payment terms are (longer terms = greater FX exposure)

• Whether your business requires a buffer for projected volatility

Managing this well ensures that growth into new regions—especially high-volatility markets—remains profitable and predictable.

Pre-Agree How Payment Delays, Shortfalls or FX Disputes Will Be Resolved

One of the most overlooked areas in cross-border transactions is payment dispute handling. When exchange rates fluctuate, disputes often arise around:

• Short payments due to unexpected FX conversions

• Delayed transfers caused by banking restrictions

• Which exchange rate should apply for settlement

• Who bears the cost of unexpected differences

Your contract should clearly define:

• The reference rate to use

• How underpayments will be topped up

• What happens if the receiving bank applies a different FX rate

• Whether late payments trigger new rate calculations

Clear dispute mechanisms save time, preserve relationships and prevent operational disruptions.

The Bigger Picture: Currency Risk Is a Legal, Commercial and Operational Issue

Exchange rate volatility impacts:

• Profit margins

• Pricing strategy

• Supplier relationships

• Cash flow

• Budgeting and forecasting

• Customer loyalty

• Long-term competitiveness

It’s not enough to react to market shifts — your contracts should be strong enough to withstand them.

Many businesses only address FX risk after they’ve experienced a loss. The companies that scale sustainably are those that embed currency strategy into their contracts before volatility hits.

Now is the perfect moment to review your agreements and ensure your contract terms protect you when the markets don't.

For deeper insight into how Count & Sol can enhance your contracts to reduce the impact of currency fluctuations, , book a consultation today.