Why Is the Naira Weaker Than the Ghanaian Cedi and Benin’s CFA Despite Lagos’ Massive Economy?
Lagos, Nigeria – May 2025: A wave of public concern is sweeping across Nigeria as economic observers, business leaders, and everyday citizens question why the Nigerian Naira remains weaker than both the Ghanaian Cedi and the CFA franc of the Benin Republic, despite Lagos boasting an economy larger than those of both neighboring countries.
The debate was reignited after Joe Igbokwe, a prominent Lagos APC chieftain, posed a thought-provoking question on Facebook:
“If indeed Ghanaian Cedis and Benin Republic, Cotonou CFA currencies are stronger than our Naira then something is wrong somewhere. Lagos economy is bigger than that of Ghana and Benin Republic. We need to search our conscience.”
According to current exchange rates, the Ghanaian Cedi (GHS) and the West African CFA franc (XOF), used by Benin Republic, both trade at values far higher than the Nigerian Naira (NGN). For instance, one Ghanaian Cedi exchanges for over 100 Naira, while one CFA franc is worth about 1.5 Naira. This stands in stark contrast to Lagos’ economy, which, with a GDP exceeding $100 billion, dwarfs the economies of both Ghana and the Benin Republic.
Nigerians React: Beyond Exchange Rates
The conversation on Igbokwe’s post drew a flurry of insightful comments that highlight the deeper, systemic issues at play.
Abiodun Mabayomije Adenuga commented:
“Three currencies, one sad tale; whether it’s the Naira, the Cedi, or the CFA franc, none is backed by solid economic muscle. It’s like comparing six to half a dozen, different names, same weak foundation. But Nigeria’s case is worsened by a booming population hooked on imports like an addiction.
Until we build a nation powered by skilled and knowledgeable minds, our story won’t change. We must boldly demand and pursue a shift from consuming to producing. The government must rise to the task: make quality education not a privilege, but a right for every citizen, no matter their background. That’s how nations rise.”
Deji Philip Adel added nuance to the conversation, stressing the importance of real purchasing power:
“The strength of a currency is in its local purchasing power, not in the rate of its foreign exchange.
N100,000 naira exchanges for 800 redenominated cedis in Ghana. Note the term ‘redenominated.’ N100k will buy 9 bags of 50kg portland cement in Nigeria. 800 GHS will buy 7 bags of 50kg Portland cement in Ghana.”
Emmanuel Chimenem Gilead wrote:
“Not true. It can’t be compared. The purchasing powers are not same at all.”
Abdullahi T Musa criticised the political leadership:
“You can’t be running and be scratching your scrotum at the same time sir. You can’t be serving the same govt that devalued Naira and be complaining about Naira value as if you are not aware!”
Abdul-Aziz Bala Muhammad echoed this sentiment,
“Where were you when Tinubu devalued our Naira in 2023?”
Root Causes and Possible Solutions
Economists and financial experts agree that while economic output is a key indicator of strength, currency value is determined by a complex mix of factors, including inflation, trade imbalances, monetary policy, political stability, and investor confidence.
Analysts point to persistent inflation, high government borrowing, pressure on foreign reserves, and instability in Nigeria’s foreign exchange markets as major factors driving down the Naira’s value. By comparison, the CFA franc is backed by the French Treasury and enjoys more stable monetary management, while Ghana’s Cedi has undergone reforms aimed at controlling inflation and boosting investor confidence.
Some experts and commentators are calling for urgent fiscal reforms, improved public sector accountability, and measures to restore investor and citizen trust in the Naira. Others urge the Central Bank of Nigeria (CBN) to take stronger action to stabilise the currency and address market distortions.
A Call for National Reflection
As Nigerians grapple with the effects of currency depreciation—including rising costs of imports, reduced purchasing power, and economic uncertainty—many are calling for a national conversation about the health of the Naira.
The debate continues as citizens, policymakers, and economic stakeholders look for solutions to restore the Naira’s strength and secure Nigeria’s position as Africa’s economic powerhouse.
