THE MACROECONOMIC EFFECTS OF CURRENCY REDENOMINATION: A COMPARATIVE ANALYSIS OF GHANA, TURKEY, ZAMBIA, AND ZIMBABWE

This study examines the macroeconomic impact of currency redenomination in Ghana, Turkey, Zambia, and Zimbabwe using World Bank data analyzed using Welch's ANOVA and mixed-effects regression models. The study quantifies the impact of reforms on GDP growth, FDI inflows, inflation control, and exchange rate stability using standardized 10-year windows before and after redenomination. Jamovi software was used to analyze the data. The results reveal that currency rebasing can have a positive impact on economic performance, but its success is highly dependent on the broader economic context and complementary reforms. Ghana, Turkey, and Zimbabwe experienced improvements in GDP growth, FDI, and inflation control, especially when currency reforms were accompanied by strong fiscal policies, inflation targeting, and public communication efforts. In contrast, Zambia's mixed results underscore that currency rebasing alone cannot yield significant benefits without addressing underlying structural issues. The study highlights the importance of a comprehensive reform agenda that includes institutional, fiscal, and monetary policy changes to maximize the effectiveness of currency rebasing. This study contributes to the literature by showing that while currency reforms may appear symbolic, their psychological and signaling effects can translate into real macroeconomic improvements, provided they are embedded in a sound economic strategy.

Keywords: Currency redenomination, GDP growth, Foreign Direct Investment, inflation control, exchange rate stability