According to the World Bank’s October 2024 Africa Pulse Report, the Ghanaian cedi is one of the worst-performing currencies in Sub-Saharan Africa (SSA) this year, having lost about 24% of its value to the US dollar. This places the cedi as the fourth weakest currency in the region, following South Sudan’s pound, which dropped by over 60%, Ethiopia’s birr by 51%, and Nigeria’s naira by more than 40%.
In contrast, the Kenyan shilling is Africa’s best-performing currency in 2024, appreciating by about 21% as of August 2024. The report attributes the weakening of currencies like the cedi, birr, and naira to ongoing demand for foreign exchange and limited dollar inflows. The naira’s depreciation, in particular, has been driven by surging demand for US dollars in the parallel market.
However, some currencies that weakened in 2023 have stabilised or strengthened. The South African rand and currencies pegged to it have gained 3.1% this year, while the Kenyan shilling’s strong performance stands out. Despite these positive signs, exchange rate pressures and foreign exchange shortages remain a significant concern for policymakers across Africa.
The report also warns that over a third of countries in the region, including those in currency unions like the Economic and Monetary Community of Central Africa and WAEMU, may face critical shortages in international reserves by the end of 2024, with less than three months of import cover expected.