Several African currencies experienced sharp devaluations against the US dollar in 2024, reflecting economic challenges such as inflation, trade imbalances, and dwindling foreign reserves. These issues have intensified pressure on exchange rates, impacting economic stability and purchasing power in the affected nations.
Nigeria’s Naira and Malawi’s Kwacha recorded significant depreciations, with the Naira falling by 104.38% and the Kwacha by 66.82%. Other currencies across the continent also faced worsening exchange rates, driven by high inflation, persistent trade imbalances, political instability, and increasing debt levels.
The depreciation of local currencies has contributed to rising inflation by increasing the cost of imported goods and services, straining consumers and economies. Countries have struggled to stabilize their currencies, with limited success due to underlying structural challenges.
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Statista data as of August 1, 2023, provided insights into the performance of African currencies against the US dollar. Sierra Leone’s Leone had the highest exchange rate, with one dollar equalling 21,021.7 leones, marking it as the weakest currency on the continent.
Other currencies included the Guinea Franc, trading at 8,521 to the dollar, and the Malagasy Ariary at 4,430. Nigeria’s Naira was at 758.9 per dollar, the Angolan Kwanza at 824, Sudan’s Pound at 599, and the Liberian Dollar at 185. The Libyan Dinar, Ghanaian Cedi, and Egyptian Pound traded at 4.77, 11, and 30.85 per dollar, respectively, highlighting the variation in currency strength across Africa.
The US dollar’s global role as a reserve currency and its stability in international trade continue to shape exchange rates. While some African countries have managed to strengthen their currencies by addressing inflationary pressures, others face ongoing challenges that hinder sustainable improvements.
Read also: Here’re African countries worst hit by currency devaluation
The economic impact of these devaluations underscores the importance of addressing the structural issues driving currency depreciation across the continent.
1. Nigeria – Naira
In 2023, the Nigerian Naira was trading at 758 to the US dollar. By the end of 2024, it had reached 1,549.18, representing a dramatic 104.38% depreciation. This steep decline shows Nigeria’s ongoing economic difficulties, including inflation and a lack of foreign exchange reserves.
2. Malawi – Kwacha
The Malawian Kwacha experienced a sharp drop from 1,043 per dollar in 2023 to 1,739.98 by the end of 2024. The 66.82% fall underscores the challenges faced by Malawi’s economy, such as high inflation and a reliance on imports, which put additional pressure on the currency.
3. Rwanda – Franc
The Rwandan Franc fell from 1,166 per dollar in 2023 to 1,392.32 in 2024. This 19.41% decrease points to rising inflation, a widening trade deficit, and the global economic climate, which has impacted Rwanda’s foreign exchange rates.
Read also: Naira among worst performing currencies in Sub-Saharan Africa— World Bank
4. Congo – Franc
The Congolese Franc saw a drop from 2,457 in 2023 to 2,866.15 in 2024, a 16.65% fall. The decline reflects the Congolese economy’s struggle with internal challenges and external shocks, leading to a weakening of the currency.
5. Angola – Kwanza
The Angolan Kwanza saw a smaller decrease, moving from 824 to 912 per US dollar. This 10.68% depreciation reflects Angola’s efforts to stabilise its economy, although external factors like oil prices and inflation continue to challenge the national currency.
6. Sierra Leone – Leone
The Sierra Leonean Leone moved from 21,021 to 22,902 per dollar in 2024, marking an 8.95% decline. This increase reflects economic hardships, including high inflation rates and the country’s vulnerability to global financial shifts.
Read also: Beyond Naira: Foreign currencies shaping Nigerian businesses
7. Madagascar – Ariary
The Malagasy Ariary depreciated from 4,430 to 4,685.45 against the US dollar, a 5.77% decline. Madagascar continues to face structural challenges, such as high poverty levels and limited economic diversification, which contribute to the weakening of its currency.
8. Burundi – Franc
Burundi’s Franc depreciated from 2,809 to 2,967.11, a 5.63% fall. The country’s persistent economic difficulties, including inflation and political instability, are evident in the continued devaluation of its currency.
9. Comoros – Franc
The Comorian Franc fell from 445 to 466.12 per dollar, reflecting a 4.75% depreciation. Comoros, a small island nation, faces numerous economic challenges, including reliance on imports and a fragile economy.
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10. Uganda – Shilling
The Ugandan Shilling experienced a slight fall from 3,608 in 2023 to 3,686.17 in 2024, showing a 2.17% decrease. While not as drastic as other currencies, the Shilling’s minor decline is indicative of the pressure Uganda faces due to rising inflation and its dependence on imports.
11. Guinea – Franc
The Guinean Franc saw a small depreciation from 8,521 to 8,672.54 per dollar. The 1.78% decline highlights the country’s economic struggles, which include political instability and a reliance on mining exports.
12. Somalia – Shilling
The Somali Shilling had a marginal decrease from 565 to 573.47 against the US dollar, a 1.50% depreciation. Despite the slight decline, Somalia’s fragile economy, coupled with political instability and high inflation, continues to affect its currency.
Read also: Why Nigeria’s currency rebounded and what it means for the economy
13. Sudan – Pounds
The Sudanese Pound experienced the smallest drop of 0.42%, from 599 to 601.5 per dollar. While the decline is minimal, it reflects the ongoing economic challenges faced by Sudan, including political instability and international sanctions.
14. Liberia – Dollars
The Liberian Dollar saw a slight appreciation, moving from 185 to 183.63 per US dollar, a -0.74% change. Although the currency appreciated slightly, Liberia still faces challenges, such as inflation and reliance on foreign aid.
15. Tanzania – Shilling
The Tanzanian Shilling experienced a 1.18% appreciation, moving from 2,454 to 2,425 against the US dollar. Despite this modest improvement, Tanzania’s economy continues to struggle with inflation and a trade imbalance, which affects its currency.
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