The Ghanaian cedi and three other currencies have been ranked among the worst-performing in Sub-Saharan Africa (SSA) in 2024, according to the World Bank’s October 2024 Africa Pulse Report.
The report revealed that the cedi has depreciated by approximately 24% against the US dollar, placing it as the fourth weakest currency in the region. Leading the list of the worst performers are South Sudan’s pound, which has lost over 60% of its value, followed by Ethiopia’s birr (51%) and Nigeria’s naira (over 40%).
In contrast, the Kenyan shilling has emerged as the best-performing currency in SSA, appreciating by 21% year-to-date as of August 2024.
The report noted that Ethiopia, Ghana, and Nigeria have seen their currencies weaken significantly due to increasing demand for foreign exchange. By the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were the worst hit. The naira, in particular, experienced a 43% year-to-date depreciation due to surging demand for US dollars in the parallel market, fueled by financial institutions and non-financial users, as well as limited dollar inflows and slow disbursements from the central bank.
While some currencies that weakened in 2023 have stabilized, exchange rate pressures and foreign exchange shortages continue to challenge African policymakers. The report also highlighted that more than one-third of countries in the region are expected to have less than three months of import cover in their international reserves by the end of 2024.
Despite this, the South African rand and currencies pegged to it have strengthened by 3.1% so far this year after facing declines in the previous year.
