Ghanaian Cedi Ranks Second Among Top 15 Worst-Performing Sub-Saharan African Currencies – Economics

In the first 17 days of the new year alone, the Ghanaian currency reportedly depreciated by 12.7%, making it the second-worst among the 15 major currencies in sub-Saharan Africa. While one US dollar buys 13.10 units of the cedi in the parallel market, one greenback buys around 10.36 units of the local currency, according to the latest data from the Bank of Ghana.

The short-lived resurgence of the cedi

After ending 2022 as one of the world's worst-performing currencies, the Ghanaian currency is already one of two of the top 15 sub-Saharan African currencies to have depreciated by double digits within the first 17 days of the new year, a Test report has said. The Egyptian pound, which depreciated by 16.5% over the same period, is the only currency among the top 15 in sub-Saharan Africa that has depreciated faster than the cedi.

Although the Ghana Cedi's year-to-date decline of 12.7% is still smaller than that of all of 2022 (38.86%), the recent devaluation suggests that the currency's resurgence that began in late 2022 has subsided.

As reported from Bitcoin.com News In mid-December 2022, the Cedi recovered from around GHS14:1 to below 9:1 in just four days. The currency's revival was fueled by reports that the Ghanaian government had secured a $3 billion loan from the International Monetary Fund (IMF). Ghana needs the loan to stabilize its economy.

In addition to the IMF loan package, Ghana, one of Africa's leading gold producers, hopes to ease pressure on the cedi through the recently launched loan package Gold for oil plan.

Bank of Ghana exchange rates pic.twitter.com/AGI7GfW5M3

— Bank of Ghana (@thebankofghana) January 20, 2023

However, the cedi's plunge to about GHS13.10:1 dollar in the parallel foreign exchange market suggests that neither the IMF loan nor the barter system can halt the currency's fall. Meanwhile, at the time of writing, the Bank of Ghana Data showed that one US dollar bought GHS10.36 in the official foreign exchange market.

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Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer from Zimbabwe. He has written extensively about the economic struggles of some African countries, as well as how digital currencies can provide an escape route for Africans.

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