Cedi the third strongest currency in Africa, says Dep. Fin. Minister
Deputy Finance Minister, Dr. John Kumah, has debunked claims that the Ghana cedi is the weakest currency in Africa.
According to him, such a claim is mere propaganda meant to undermine the government’s fiscal measures in halting the free fall of the cedi against the dollar.
He stated that the cedi is currently the third strongest currency in Africa; however, he conceded that the rate of depreciation the cedi is experiencing might be the worst on the continent.
Speaking on the PM Express Business Edition, Dr. John Kumah noted that currencies across the world are experiencing depreciations and thus, critics of the government’s fiscal policies cannot blame the poor performing cedi on fiscal mismanagement.
He said, “And look, I’ve heard all the propaganda, they said Ghana cedi is the worst in Africa and all kinds of things. Look, don’t believe those propaganda. I just returned from Tunisia on a programme, and Tunisia has the second strongest currency in Africa.
“Ghana is third actually according to any global ranking of currencies. I am talking about the strength of currencies in Africa. The Libyan Dinar, followed by Tunisian Dinar and then Ghana cedi is the third strongest currency in Africa. But maybe they were talking about the rate of depreciation.
“I just saw what is happening in Nigeria and they are equally complaining that their Naira is not just four hundred and something to the dollar, but sometimes it’s even 700 depending on where … sometimes they can’t even find the dollar. So this is a global situation.”
He added, “So it is not just a Ghana situation, it is something that is happening globally and people should not begin to think that it’s as a result of some bad policy or whatever.”
He stated that government has put in place some measures it believes would stabilize the cedi against the dollar and shore up the economy.
“But the good news is that…like we announced government is intervening with this foreign exchange auctions which occasionally Bank of Ghana does to intervene in the market to bring calm and stability to the foreign exchange front.
“And then we have also introduced this gold buying to shore up our reserves in gold. And not just that we are also expecting the Cocoa syndicated loans by the end of the month or early next month which will equally come in to shore up our economy,” he said.
Cedi ranks 5th worst-performing currency in Africa
Meanwhile, Ghana’s cedi, according to Professor Steve Hanke’s, CurrencyWatchlist, is the 5th worst-performing currency on the African Continent.
Globally, the cedi is the 13th worst-performing currency.
According to the Professor of Applied Economics and Director of the Troubled Currencies Project in the United States, the Ghanaian cedi has depreciated by 42.57% against the dollar since January 2020.
Official data from Ghana’s Central Bank puts the YTD depreciation rate of the cedi against the dollar at 35% for this year – 2022.
Professor Hanke’s currency watchlist, constitutes a group of currencies that have depreciated by at least 20% against the dollar since January 2020.
He explains that the currencies of the countries on his list have suffered massive devaluations against the US dollar since January 2020.
According to the latest ranking by Hanke’s Currency Watchlist, the Zimbabwean dollar has been rated the worst-performing currency in Africa against the United States dollar. The Zimbabwean dollar has depreciated against the USD by 97.33% since Jan. 2020.
Coming in second place is Sudan. The Sudanese pound has depreciated against the USD by 84.95% since Jan 2020. According to Hanke, the only way to save Sudan’s pound and its economy is to install a currency board.
South Sudan ranks third on the list after the nation’s currency depreciated against the USD by 50.79% since Jan 2020. According to Hanke, South Sudan’s economic death spiral never ends.
Nigeria ranks 4th on the list of worst-performing currencies in Africa and 11th globally as the currency’s value has depreciated against the USD by 48.87% since Jan 2020.
Malawi ranks 6th place in Hanke’s #CurrencyWatchlist. The kwacha has depreciated against the USD by 39.54% since Jan 2020, by measure, and is yet another central bank junk currency, said Hanke in a Twitter post.
Sierra Leone takes 7th place in Hanke’s #CurrencyWatchlist. The Sierra Leone has depreciated against the USD by 31.23% since Jan 1, 2020. According to Hanke, the country’s currency redenomination has done nothing to end its economic death spiral.
Below is Hanke’s currency watchlist:
