As Ghana’s cedi started to depreciate late last year, many people in the country were surprised. That its slide continued in the first five months of 2012 – it lost 15% of its value against the dollar, making it one of the worst-performing currencies in Africa – added to the puzzlement. After all, the economy was one of the fastest growing in the world, with a gross domestic product (GDP) that grew by 14% in 2011 and is expected to rise by a still-hefty 8% this year. Inflation was in single digits, while exports were rising quickly thanks to the start of oil production in the country in late 2010.
“It’s worrying,” says Keli Gadzekpo, chief executive of Databank, a local investment bank. “You’d think that with the oil component added to our export base, it would create the opposite effect and that the cedi would have been stronger.”
