14th October 2024 5:16:28 PM
2 mins readThe 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.
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The report highlights that the cedi has depreciated approximately 24% against the US dollar, making it the fourth weakest currency in the region.
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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%).
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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.
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“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.
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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”.
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In contrast, the report said some currencies that weakened in 2023 have stabilised or strengthened this year.
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“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”.
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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.
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“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”.
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