Hardly a day passes by without a news item on the continuous and rather painful fall in the value of the Cedi.
The Cedi is falling against the Dollar and other major currencies and the result is an increase in the prices of imported goods. This is contributing to the increasing cost of living in Ghana, and making life unbearable for Ghanaians.
We often hear shouts of “it is happening everywhere” so today, I set out to deepen my understanding on how the Cedi has performed relative to other African currencies using the US$ as reference.
My aim was to analyse all African currencies on the online Oanda Currency Converter tool with the view to better appreciating the performance of the Cedi vis a vis other African currencies.
The period for this analysis is 1 Jan 2023 to 31 May 2024 (17 months). Overall, 37 African currencies used in 49 African countries were analysed. These were the African currencies on the Oanda online tool. The data was extracted on 1st June 2024.
The currencies of the Democratic Rep of Congo (DRC), Guinea-Bissau, South Sudan and Zimbabwe were not included in the Oanda Currency tool and hence left out of the analysis.
RESULTS…
The results are presented starting with the best performing currencies (in terms of the extent of devaluation during the period under review) and ending with the worst performing currencies.
The results are presented in categories/groups.
A. Currencies which gained in value…
1). +5.6% = Moroccan Dirham
2). +2.3% = Algerian Dinar
3). +1.3% = Sao Tome Principe Dobra
4). +1.0% = Cape Verde Escudo
5). +1.0% = Comoros Franc
6). +1.0% = West African CFA (8 countries)
7). +1.0% = CFA Franc BEAC (6 countries)
8). +0.4% = Guinea Franc
B. Currencies which maintained a constant value…
9). 0% = Djibouti Franc
10). 0% = Eritrea Nakfa
11). 0% = Mozambique New Metical
C. Currencies which depreciated very slightly and lost less than 1% of their value…
12). -0.5% = Tunisia Dinar
13). -0.6% = Libyan Dinar
D. Currencies which depreciated between 1% and 9.9% (single digit depreciation)…
14). -2.8% = Uganda Shillings
15). -3.2% = Seychelles Rupee
16). -4.7% = Sierra Leone Leone
17). -5.1% = Sudanese Pound
18). -5.4% = Mauritius Rupee
19). -5.8% = Kenya Shillings
20). -6.6% = Botswana Pula
21). -7.3% = Ethiopian Birr
22). -7.5% = Mauritania Ouguiya
23). -9.5% = South African Rand
24). -9.5% = Lesotho Loti
25). -9.5% = Namibian Dollar
26). -9.5% = Swaziland Lilangeni
E. Currencies which depreciated by between 10% and 19.9%…
27). -11.3% = Gambian Dalasi
28). -11.5% = Tanzania Shilling
F. Currencies which depreciated by 20% to 29.9%…
29). -21.7% = Rwandan Franc
30). -25.8% = Liberian Dollar
G. Currencies which depreciated by 30% to 39.9%…
31). -39.7% = Congolese Franc
H. Currencies which depreciated by 40% to 49.9%…
32). -40.0% = Burundi Franc
33). -44.5% = Ghana Cedis
I. Currencies which depreciated by above 50%…
34). -69.4% = Angolan Kwanza
35). -70.4% = Malawi Kwacha
36). -70.5% = Egyptian Pound
37). -205.9% = Nigerian Naira
CONCLUSIONS…
- Over the period under review, the Cedi’s value fell by 44.5%.
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The Cedi was 33rd out of 37 currencies analysed. In other words, the Cedi was one of the 5 poorest performing currencies in Africa.
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In terms of performance, the Cedi belonged to the poorest/worst 20% performing African currencies.
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86.5% of the African currencies analysed are performing better than the Cedi.
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The Cedi performed more than twice as bad as the mean depreciation value (-18.5%) of the African currencies analysed.
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The Cedi performed more than 7 times worse than the median depreciation value (-5.8%) of the African currencies analysed.
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The Cedi performed worse than some currencies from poorer and less endowed African countries.
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The Cedi performed worse than some African countries either in war or experiencing political instability/conflict issues.
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Approx 70% of all the African currencies analysed had only a single digit depreciation (at worst).
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In a nutshell, despite all the Global economic and other challenges, most currencies on the African continent outperformed the Cedi.
TAKE HOME MESSAGE…
Our leaders must have the courage to accept responsibility for their (in)actions, take bold decisions and be disciplined enough to sustain such decisions. Those decisions must start with leadership. The people will be more willing to follow if/when leadership demonstrates a clear and compelling example.
We cannot continue blaming Covid-19 and Ukraine for our woes, most of which are self inflicted. Most of the African currencies are doing just fine. We are not even currently paying our external debts and yet our Cedi is losing value so fast. Our nation is crying out for bold and courageous leadership to turn the tide and lift up the hopes and aspirations of our people.
Ghana 🇬🇭 deserves much better.
Thank you.
NB. The data in Oanda is often more conservative than that at the country level and this holds true for all currencies analysed.
Kofi Amekudzi (June 2024)
