MARKET NEWS

by Oyeleke Joanna

Currency strength is a crucial indicator of a country’s economic stability and purchasing power. In West Africa, several neighboring nations have currencies currently stronger than Nigeria’s naira. 

This article explores these countries, examining the factors contributing to their currency strength.

1. Ghanaian Cedi (GHS)

Ghana’s diversified economy and reliance on various exports, including cocoa, gold, and oil, have helped support the Cedi’s value. Although the cedi has experienced depreciation, it has generally held more value than the highly volatile naira.

The Ghanaian cedi has historically been more valuable than the naira, partly due to Ghana’s relatively stable economic policies and higher GDP per capita than Nigeria’s. Despite recent challenges with inflation, Ghana’s government has implemented various measures to strengthen the cedi, such as fiscal consolidation and tighter monetary policy. 1 Ghanaian Cedi currently exchanges around 102 . 5 in Nigerian Naira.

2. Cape Verdean Escudo (CVE)

Like the CFA franc, the Cape Verdean escudo is pegged to the euro, ensuring stability. Cape Verde’s economic reliance on tourism and remittances, along with sound monetary policy, has helped the escudo maintain a stronger value than the naira.

Cape Verde’s pegged exchange rate system provides a buffer against devaluation, particularly compared to Nigeria’s floating rate. As a result, despite the country’s tiny economy, the escudo remains a more stable currency. Currently, 1 Cape Verdean Escudo is equivalent to 16.64 Nigerian Naira.

3. Senegal and Other West African Economic and Monetary Union (WAEMU) Countries 

The CFA franc is used by eight West African countries, including Senegal, Côte d’Ivoire, Burkina Faso, Guinea-Bissau, Mali, Niger, Togo and Benin. Its value is pegged to the euro at a fixed rate, which helps provide stability and prevents severe fluctuations. This pegging arrangement backed by the French treasury has made the CFA franc more stable than the Nigerian naira, which operates under a floating exchange rate system. At the moment, 1 Nigerian Naira is equivalent to 0.3679 Central African CFA Franc.

4. Gambian Dalasi (GMD)

Despite Gambia’s small economy, the Gambian Dalasi is generally stronger than the naira. The Dalasi benefits from the country’s lower inflation and sound fiscal policy. Gambia’s reliance on tourism and agricultural exports supports its currency value, though it is still susceptible to fluctuations. However, with 1 Gambian Dalasi at the moment, you’ll get around  23. 52 Nigerian Naira.

The Nigerian naira has faced significant devaluation in recent years due to inflation, currency supply constraints, and other economic challenges. In contrast, these other West African nations have been able to maintain stronger currencies due to factors like pegging to the euro, as seen with the CFA franc, or lower rates of inflation.