Adnan Adams Mohammed
After losing approximately 24 percent of its value against the US dollar, the Ghana Cedi is currently the fourth weakest or worst performing currency in Sub-Saharan Africa (SSA).
This is according to the World Bank’s October 2024 Africa Pulse Report launched last week. Ghana is ahead of Nigeria, Ethiopia and South Sudan with worst performing currency in 2024.
South Sudan’s pound recorded over 60% loss, Ethiopia’s birr (51%), and Nigeria’s naira (over 40%). In contrast, the Kenyan shilling has emerged as the best-performing currency in Africa, showing a year-to-date appreciation of about 21% as of August 2024.
“Ethiopia, Ghana, and Nigeria are among the worst-performing in Africa this year, with their currencies continuing to weaken under mounting pressure for foreign exchange,” the report stated.
It further explained that by the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound had experienced significant depreciation.
The Nigerian naira, in particular, lost around 43% of its value due to the central bank’s heightened demand for US dollars in the parallel market, limited dollar inflows, and slow disbursement of foreign exchange to currency exchange bureaus.
On the other hand, some currencies that weakened in 2023 have seen a recovery or stabilisation.
The Kenyan shilling’s 21% appreciation stands out, while the South African rand and currencies pegged to it have strengthened by 3.1% this year, after significant losses in the previous year.
Despite these improvements, the report warns that exchange rate pressures and foreign exchange shortages remain major concerns for African policymakers.
More than a third of the 30 countries and two currency unions (the Economic and Monetary Community of Central Africa and WAEMU) surveyed are expected to have less than three months’ worth of import cover in international reserves by the end of 2024.
