African currencies are showing signs of stabilisation, with Nigeria’s inflation slowing and Ghana’s cedi rebounding strongly. As reported by Reuters, however, in major cities like Lagos, Accra, Nairobi, and Harare, rents, property sales, school fees, and professional services remain priced in US dollars, while salaries are paid in local currency.
Nigeria and Ghana: Stabilisation but Behaviour Lingers
Nigeria’s inflation has eased to 15.1%, with the naira trading around mid-N1,300 per dollar. Ghana’s cedi gained over 40% against the dollar in 2025, recovering from repeated double-digit depreciation. Despite these improvements, households still face dollar-denominated pricing in real estate, education, and professional services.
Tunde Fasakin, a marketing professional in Abuja, noted that “our incomes don’t rise with the exchange rate, but everything priced in dollars does,” highlighting the continuing exchange-rate risk borne by ordinary workers.
Zimbabwe and Kenya: Deep-Rooted Dollarisation
Zimbabwe’s experience illustrates how dollarisation can become entrenched after hyperinflation erodes trust in local currency. Even with the introduction of a new ZiG currency, the US dollar dominates daily transactions. In Kenya, tourism and high-end services often quote prices in dollars, despite the shilling stabilising in recent years.
Economic and Social Implications
Dollar pricing benefits businesses earning foreign exchange but transfers risk to salaried workers. A slide in local currency directly increases the cost of living without raising wages. Middle-class households often seek foreign-currency accounts or delay investments to hedge against volatility, further entrenching inequality.
Economists warn that persistent dollarisation undermines monetary policy. Paul Alaje, a Nigerian economist, says, “When citizens transact and price goods in foreign currency rather than their own, it reflects deep concerns about inflation, exchange-rate volatility, and the future purchasing power of local money.”
Restoring confidence requires more than administrative measures: predictable exchange rates, consistent inflation control, strong foreign reserves, fiscal discipline, and domestic production growth. Stabilising inflation is only the first step; rebuilding belief in local currency remains the harder task.
