The Ghana cedi, along with three other currencies, ranks among the poorest performers in Sub-Saharan Africa (SSA) for 2024, according to the World Bank’s October 2024 Africa Pulse Report.
The report highlights that the cedi has depreciated approximately 24% against the US dollar, making it the fourth weakest currency in the region.
The most poorly performing currencies in SSA this year include South Sudan’s pound (over 60% decline), Ethiopia’s birr (51%), and Nigeria’s naira (over 40%).
In contrast, the Kenyan shilling has emerged as the top-performing currency in Africa, boasting a year-to-date increase of around 21% as of August 2024.
“Ethiopia, Ghana, and Nigeria are among the worst performing in Africa this year, and their currencies continue weakening while demand for foreign exchange remains pressing”, the report said.
It added “By end-August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region. The Nigerian naira continued losing value, with a year-to-date depreciation of about 43% as of the end of August. Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira”.
In contrast, the report said some currencies that weakened in 2023 have stabilised or strengthened this year.
“The Kenyan shilling is the best-performing currency in Sub-Saharan Africa this year: it appreciated by 21 per cent year-to-date by end-August 2024. The South African rand and currencies pegged to it have strengthened by 3.1% so far this year, after losing value in the past year”.
While many currencies are stabilizing, the October 2024 Africa Pulse Report highlighted that African policymakers still face challenges with exchange rate pressures and foreign currency shortages.
“From a sample of 30 countries and two currency unions (the Economic and Monetary Community of Central Africa and WAEMU), more than one-third of the countries in the region are set to have less than three months of imports in international reserves by end-2024”.