When we speak of currency what comes in your mind first? Economy right? True enough, the value of a country’s currency against some of the most powerful currencies (dollar for example), is used to gauge the economic status of a country. You might be wondering between the Naira and the Cedi, which has more value? Let us dig into the economic status of the two countries to know this.
Not all countries do not depend on currency to rate their economy. Japan for example, has an exchange rate of 1$ to 111 Yen (as of Jan 22, 2018), but has one of the most stable economies in the world. With people having an average per capita income of 3000$ per month, it is only justifiable that their economy be great.
Naira and Cedis - which is more valuable?
This question is not uncommon among citizens of both countries (Nigeria and Ghana). According to the most recent conversion rates released on 22 January 2018, the conversion of Cedis to Naira stands at 1GHS=79.22615NGN. The conversion rate however of the Naira to Cedis is just about 1NGN=0.013GHS. Considering the nominal values, then by far is the Cedi above the Naira. However this is not entirely true.
The Ghanaian government back in 2007 raised the economic value of the Cedi against the dollar. The Cedi rose from 9.2 to 2.35 against the dollar in a year. This resulted in an inflation of about 155%.The government considered the economy in terms of currency rather than a stronger factor of the Gross Domestic Product (GDP) of the country. This also raised the availability of black market currency.
Experts advice that the government put the currency open that it may build itself. The Naira’s fall however is for the government to blame itself. After the value of crude oil dropped, the government tried to hold the value of the Naira against the dollar but failed severally.
This instead led to a steady decline in the revenues of the citizens and created a double market for the currency. The black market that was born to exchange the Naira has scared away investors again contributing immensely to economy drop. This shows clearly that the Naira and Cedis values depend wholly on government policies.
Let us get back to our million-dollar question. Between the Naira and Cedis which is higher?
It is obvious as seen above that the Cedi has more weight on the international market than the Naira. Take a look at the rates below;
1GHS=24.27 Japanese Yen
This however has no implications on the economy. The Japanese economy is far much stronger than the Ghanaians. So is the Nigerian.
According to Dr. John Gatsi of the University of Cape Coast, the Cedi is stronger because Ghana has no limit on importation of basic items (food and pharmaceuticals). He also adds that the Nigerian economy is still stronger. Why? Because the living standards in Nigeria are still higher. Gatsi also says that inflation in Ghana still stays higher than that of Nigeria.