There was a time when the naira and the cedi were giving African policymakers something to celebrate.
Nigeria’s currency became the world’s best-performing currency in April 2024 after recovering from its earlier collapse. Ghana’s cedi went even further the following year, gaining more than 40% against the dollar and becoming the world’s best-performing currency in the first half of 2025.
Those rallies mattered because they appeared to show that both countries were finally getting their foreign exchange markets under control. But currency gains can disappear quickly when the supply of dollars changes.
By July of this year, Ghana’s cedi had fallen and was under sustained pressure from corporate demand for dollars. Nigeria’s naira was in a very different position. It held up a bit better, but it too has faced renewed demand for foreign currency.
The difference between the two currencies shows how quickly a rally can change when the supply and demand for dollars shift.
Ghana’s cedi has gone from Africa’s best to its weakest
The cedi’s reversal has been one of Africa’s biggest currency stories this year. By late July, the currency had fallen about 11.6% against the dollar, making it the weakest among the 17 African currencies in the comparison. That was a sharp turn from 2025, when the cedi gained more than 40% and became one of the world’s best-performing currencies.
The immediate problem has been a rise in demand for dollars. Reuters reported that companies were seeking more foreign currency for imports, dividend payments and energy needs, with corporate demand outpacing available supply. That imbalance has kept the cedi under pressure.
Kofi James, an economic analyst, said the cedi’s weakness reflects this change in the market.
“The cedi’s weakness is largely a reflection of renewed dollar demand. Businesses are importing more, energy companies need more foreign currency and the market is still dealing with some unmet demand. That is very different from the conditions that caused the sharp currency crisis a few years ago,” he told Businessfront.
That distinction is important. Ghana is not back in the currency crisis of 2022 and 2023. The current problem is more specific. Businesses need more dollars, while available supply has not always been enough to meet that demand.
The cedi’s decline therefore says less about a sudden collapse in Ghana’s economy than it does about how quickly a currency can lose ground when foreign exchange demand changes.
Last year, the cedi’s strength became a symbol of Ghana’s economic recovery. This year, its weakness is testing how durable that recovery can be when dollar demand rises.
The naira offers a different case
Nigeria offers a different picture. The naira has gained 5.58% against the dollar this year as of July 28. That makes it one of Africa’s strongest currencies in 2026, rather than one of its weakest. But the gain has not made the currency immune to pressure.
It was reported on July 23 that the naira was quoted at N1,368 to the dollar on the official market, compared with N1,383 a week earlier. In street trading, it was around N1,420. The pressure was not enough to erase the naira’s gains for the year. It did, however, show how quickly demand for dollars can affect the market.
The naira’s position is also different because the foreign exchange market has become less distorted since the reforms that began in 2023. The gap between official and street rates is much narrower than it was during the worst period of the crisis.
Abiodun Ezekiel, a financial analyst, said the naira remains sensitive because of Nigeria’s dependence on dollar-priced goods and services.
“The naira remains sensitive to dollar demand because Nigeria still depends heavily on imports. Any sustained increase in demand for foreign currency can quickly put pressure on the exchange rate. The difference now is that the market has more liquidity and fewer distortions than it did during the crisis,” he told Businessfront.
That gives Nigeria a different problem from Ghana.
Recent trading suggests that the Central Bank of Nigeria still has a role in smoothing periods of heavy demand. By August 10, reports say the naira was trading at about N1,362 officially and N1,425 on the street, with traders expecting the currency to remain broadly stable because of central bank dollar sales.
The challenge is making that stability last without the central bank becoming the market’s main source of foreign currency.
Both currencies still depend on the dollar
The Ghana and Nigeria stories may be different, but they point to the same weakness. Neither currency can remain strong without enough dollars entering the economy.
For Ghana, gold has been central to that equation. For Nigeria, oil remains the main source of export earnings, alongside investment inflows and other foreign currency receipts.
That creates a common vulnerability. When export earnings rise and investors bring money into the market, currencies can strengthen quickly. When companies need more dollars or foreign investors take money out, the pressure can return just as quickly.
The difference is in how each market absorbs that pressure.
Ghana is dealing with a renewed squeeze after an exceptional currency rally. Nigeria is trying to protect gains made after a much deeper currency crisis. Neither country can assume that a strong currency will sustain itself.
What will it take to make the currencies improve?
The immediate task for both countries is not to force their currencies higher. It is to keep their foreign exchange markets functioning.
Ghana has a stronger reserve position and continues to benefit from gold exports. If dollar demand eases and those inflows remain strong, the cedi could recover some of its losses. But sustained demand from importers and energy companies would keep the pressure on.
Nigeria has a different advantage. Its foreign exchange market is more transparent than it was before the 2023 reforms, while the central bank has more room to manage periods of pressure.
The real test is whether either country can generate enough foreign exchange from the wider economy to reduce the need for central bank support.
Ezekiel said that is what will ultimately determine whether the recent currency gains can last.
“The real issue is whether these economies can generate enough foreign exchange from productive activity to meet demand. Central banks can provide liquidity when there is a temporary shortage, but they cannot permanently replace export earnings and investment inflows. That is what will determine whether the naira and cedi remain stable,” he said.
That is where the stories of Ghana and Nigeria meet. The cedi’s fall from Africa’s strongest performer to one of its weakest shows how quickly a currency rally can reverse when dollar demand changes. The naira has held up better, but its recent pressure shows that it is not insulated either.
The next test for both currencies is therefore not another spectacular rally. It is whether Ghana and Nigeria can keep earning enough dollars to make currency stability less dependent on commodity prices, investor sentiment and central bank intervention.
