The Economist Intelligence Unit (EIU) of the United Kingdom predicts a 22% devaluation of the cedi against the US dollar in 2023.
According to its Africa Outlook 2023 Report, this will place the local currency as the third worst-performing currency on the African continent.
The EIU anticipates the currency decline to persist, albeit to a lesser extent, into 2023.
“Most African currencies have lost substantial value against the US dollar during 2022 and we expect exchange-rate weakness to continue into 2023, albeit to a lesser degree,” the report said.
According to the report, in 2023, the currencies of the troubled nations of Sudan and Zimbabwe will rank among the weakest in the world, while those of Ghana, Malawi, Sierra Leone, Ethiopia, and Egypt—all of which will experience high rates of inflation—will see their currencies decline by more than 10% in value relative to the US dollar.
Cedi will decline by roughly 22% in 2023, according to EIU
It went on to say that African powerhouses Kenya, Nigeria, South Africa, Angola, and Algeria would not be free from the currency weakening and will continue to see their currencies fall against the US dollar in 2023.
In contrast, the Zambian kwacha will continue to be Africa’s best-performing currency in 2023, appreciating in value by roughly 8% against the US dollar.
Following it are the CFAs of Burkina Faso and Cameroon, both of which are anticipated to strengthen against the US dollar.
So far in 2022, the Ghana cedi has lost slightly more than 27% of its value. In the retail market or the forex bureau, it is now trading at 11.25 to one US dollar.
With one of its poorest performances in the first 11 months of 2022, it rebounded significantly in value following the announcement of the Staff-Level agreement between the International Monetary Fund and the government at the beginning of this month.