World Bank report – Cedi now the poorest performing currency in Africa
The Ghana cedi has lost 60% of its value against the US dollar since the beginning of the year, according to the World Bank. This makes it the worst currency in Africa.
This was contained in the World Bank Africa Pulse Report October 2022 Volume.
The worst-performing currencies in the region since the beginning of the year, according to the report, are those of Ghana (down 60%), South Sudan (down 50.8%), Sudan (down 28.6%), Malawi (down 25.4%), and CFA Franc (down 13.3%).
The report said that even though inflation in the region was going up before Russia’s invasion, it was because of things like the decline of currencies against the dollar and the rise in commodity prices.
It said that inflationary pressures had to be tamed or else they could cause social unrest, make conflicts worse, and lead to political instability “.
The report noted that “inflation in the region was trending upward before Russia invaded Ukraine amid supply chain disruptions caused by restrictions to avoid escalation of COVID-19 cases, and the economic fallout from the pandemic”.
“Also, food and oil prices went up because of a rise in global demand, and oil prices went up because OPEC and other countries agreed to cut production.
“These effects were amplified by the war in Ukraine. Inflationary pressures in the region are mostly caused by the prices of food and fuel, as well as the falling value of local currencies “.
“Inflation was also helped a lot by the fact that food and fuel prices kept going up. Since the beginning of the year, food prices have gone up a lot in Kenya (21 basis points), Uganda (20 basis points), and Zambia (14 basis points) (figure 1.23). In turn, inflation erodes the purchasing power of poor people, increases poverty, amplifies food insecurity, and widens inequality”.