The World Bank’s October 2024 Africa Pulse Report has revealed that the cedi and three other currencies are the worst-performing in Sub-Saharan Africa (SSA) in 2024.
According to the report, the cedi has lost about 24% of its value against the US dollar, making it the fourth weakest currency in SSA.
The three other currencies are South Sudan’s pound (over 60% depreciation), Ethiopia’s birr (51%), and Nigeria’s naira (over 40%).
“Ethiopia, Ghana, and Nigeria are among the worst-performing countries in Africa this year, and their currencies continue weakening while demand for foreign exchange remains pressing,” the report stated.
It added, “By the end of 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.”
The report attributed the weakening of the naira to surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users. This, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank, exacerbated the naira’s depreciation.
Conversely, the Kenyan shilling is the best-performing currency in Africa this year, with a year-to-date gain of about 21% as of August 2024.
“The Kenyan shilling is the best-performing currency in Sub-Saharan Africa this year, appreciating by 21% year-to-date by the end of August 2024. The South African rand and currencies pegged to it have strengthened by 3.1% so far this year, after losing value last year.”
The report also noted that some currencies that weakened in 2023 have stabilized and gained strength in 2024.
“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 the end of 2024,” the report added.
SSD/KA
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