Cedi Records Modest 4% YTD Depreciation
The cedi has depreciated by approximately 4% against the US dollar in the first four months of 2025, marking one of its best performances in recent years, the World Bank has disclosed in its April 2025 Africa’s Pulse report.
This represents a significant improvement over the currency’s performance in 2024, during which it lost over 17% of its value to the American greenback, largely due to external debt pressures, inflationary challenges, and global economic uncertainty.
The report attributes the cedi’s relatively stable performance this year to less restrictive financial conditions and the early benefits of foreign exchange market reforms introduced by the government and the Bank of Ghana.
Across the continent, the best-performing currency so far in 2025 has been the CFA Franc, used predominantly by Francophone West African countries. The CFA Franc has appreciated by about 2% against the US dollar, buoyed by strong external buffers and stable monetary conditions.
In contrast, the South Sudanese pound, Ethiopian birr, and Nigerian naira were highlighted as the weakest-performing African currencies in 2024, having lost over 40% of their value due to macroeconomic instability, elevated external debt service obligations, and dwindling export revenues.
The World Bank noted that several African currencies have begun to stabilise or strengthen in 2025 as reforms take hold and market confidence gradually returns. One standout example is the Kenyan shilling, which appreciated by 20% throughout 2024 and has since maintained relative stability this year.
However, the South African rand and other currencies pegged to it have seen only mild fluctuations, maintaining levels close to those recorded at the end of 2023.
Overall, the World Bank cautioned that countries grappling with foreign exchange shortages due to high external debt service burdens and weak export performance remain at risk of continued currency pressures, urging policymakers to prioritise prudent macroeconomic management and structural reforms.
