Ghana’s cedi endured repeated double-digit depreciations. Zimbabwe continued to wrestle with the aftershocks of hyperinflation.
By early 2026, however, the macro picture looks calmer. Nigeria’s inflation has slowed sharply to 15.10 per cent, while the naira has regained some ground, trading in the mid-N1,300 range with a much narrower gap between official and parallel markets.
Ghana’s cedi rebounded sharply in 2025, gaining more than 40 per cent against the US dollar and emerging as the continent’s best-performing currency. The local unit strengthened to around 10–11 cedis per dollar, recovering from its earlier slump.
But stabilisation in the data has not fully reversed behaviour on the ground.
Across Lagos, Accra, Nairobi and Harare, rents, property sales, school fees and professional services are still benchmarked in US dollars, either directly or through exchange rates quietly set by sellers. Salaries, however, remain largely denominated in local currency.
The result is that Africa’s middle class continues to absorb exchange-rate risk in real time, even as headline indicators improve.
Dollar pricing has outlived the worst of the crisis
In Nigeria, premium real estate in major cities like Abuja and Lagos is still routinely listed in dollars.
Landlords argue that hard-currency pricing protects them from renewed volatility. Even when tenants in some cases pay in naira, the amount is frequently pegged to the prevailing parallel-market rate on the day of payment.
Tunde Fasakin, a marketing professional based in Abuja, recently searched for a short-let apartment in Lagos. A two-week stay was priced at $18,000.
He earns in naira.“Our incomes don’t rise with the exchange rate,” he says. “But everything priced in dollars does.”
For property owners, dollar pricing preserves value. For salaried workers, it transfers currency risk directly onto household budgets. Even with inflation moderating, the memory of sharp depreciation lingers in contracts and pricing strategies.
Ghana’s recovery, but dollar thinking remains
Like in some other African countries, the Nigerian and Ghanaian authorities have repeatedly warned against pricing in foreign currency, arguing it weakens the local currency and undermines monetary sovereignty.
As the cedi strengthened through 2025, overt dollar pricing declined in some sectors. Yet the underlying reference mindset has proved harder to shift.
Roselena Ahiable, a researcher in Accra, said businesses in Ghana once quoted transactions in US dollars, a practice that was rampant before.
She noted that her organisation had previously paid for services, such as hotel stays, in dollars.
Today, payments can be made in cedis even when costs are quoted in dollars.
“People still quote in dollars,” she explained. “They just convert it to cedis themselves. A $300,000 property becomes three or four million cedis, depending on the seller’s rate.”
The currency displayed may be local. The benchmark often is not.
Zimbabwe shows how deep it can go
Zimbabwe represents the extreme end of the spectrum. Years of hyperinflation eroded confidence in successive local currencies, embedding the US dollar in daily transactions from groceries to rent.
Even with the introduction of the new ZiG currency aimed at restoring monetary credibility, the dollar remains dominant in practice.
Zimbabwe’s experience simply shows that once confidence collapses, reversing dollarisation is far harder than preventing it.
Kenya and the regional pattern
In Kenya, dollar pricing is most visible in tourism, where safaris, park fees and high-end hotels serving international travellers are routinely quoted in hard currency.
The Kenyan shilling has stabilised compared with its weakest period, but sectors exposed to foreign demand still lean on dollar benchmarks.
Tanzania has formally restricted most domestic foreign-currency transactions, while Zambia has imposed fines and potential jail terms for pricing in dollars.
Yet across the region, the same pattern holds: when local currencies weaken or volatility leaves scars, economic actors seek stability elsewhere.
Often, that means the dollar.
The biggest beneficiaries of dollar pricing are exporters and businesses that earn foreign exchange. The biggest losers are salaried workers paid in naira, cedis or shillings.
When rent or tuition is tied to a dollar benchmark, any depreciation passes through immediately.
A currency slide translates into a higher effective cost of living without a corresponding rise in wages. Even in a more stable environment, the risk of future swings is built into pricing behaviour.
Middle-class households respond cautiously. Many try to hold savings in foreign-currency accounts where possible, trim discretionary spending, delay property purchases or defer long-term investments.
Those without access to hard-currency buffers absorb exchange risk directly, widening inequality between households connected to foreign exchange and those dependent entirely on local wages.
Dollarisation becomes not just a monetary phenomenon, but a distributional one.
Why central banks still struggle
Central banks across Africa are confronting more than exchange-rate volatility. They are confronting a credibility test.
“When citizens begin considering, transacting and pricing goods and services in foreign currency rather than their own, it reflects deep concerns about inflation, exchange-rate volatility and the future purchasing power of local money,” says Paul Alaje, a Nigerian economist.
That shift is not symbolic. It accelerates currency substitution, or dollarisation and weakens monetary policy transmission.
When households mentally benchmark value in dollars, interest-rate adjustments in local currency lose influence. The central bank’s ability to regulate liquidity and anchor inflation expectations diminishes.
The effects compound over time. Transaction costs rise. Inequality deepens between those who earn in foreign exchange and those who do not. Asset valuations become distorted.
Economic stability grows increasingly dependent on external currency inflows rather than domestic productivity. Reversing that behaviour requires more than administrative enforcement.
It requires sustained macroeconomic credibility inflation consistently within target ranges, a predictable exchange-rate framework, adequate foreign reserve buffers and disciplined coordination with fiscal authorities to reduce deficit monetisation and strengthen domestic production.
Stabilising inflation data is the first milestone. Restoring belief in the currency is the harder task.
Dollar pricing will recede only when households and businesses are convinced their national currency can reliably function as a store of value, a unit of account and a medium of exchange.
Until then, even in a calmer macro environment, the dollar will remain embedded in contracts, savings decisions and high-value transactions.
