External reserves play a crucial role in a country’s economic stability. These reserves are assets held by central banks in foreign currencies, used to back liabilities, manage monetary policy, and stabilize the currency exchange rate.
In Africa, several countries maintain significant external reserves to mitigate economic shocks, support imports, and maintain financial credibility on the international stage.
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Despite the challenging global environment, high commodity prices, particularly crude oil, positively impacted export receipts and balance of payments, continued capital inflows further boosted the continent’s reserve position which was driven by greenfield projects, support from multilateral and regional development finance institutions and bilateral partners, and improved tourist arrivals and remittances.
According to Afrexim bank African Trade report for 2024 Here are the top 10 countries in Africa with the highest external reserves
1. Libya – $80.7 Billion
Libya tops the list with an impressive $80.7 billion in external reserves. The country’s wealth of oil resources has contributed significantly to this stockpile. Despite political instability and internal conflict in recent years, Libya has managed to maintain a relatively high reserve due to its large-scale oil production and export. The Central Bank of Libya has utilized these reserves to stabilize its economy, especially during periods of volatility in global oil prices.
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2. Algeria – $70.3 Billion
Algeria, another North African country rich in natural resources, particularly oil and gas, holds the second-largest reserve in Africa with $70.3 billion.
3. South Africa – $57.6 Billion
South Africa, the most industrialized country on the continent, and the largest economy in Africa maintains a strong external reserve of $57.6 billion. The reserves are primarily held in gold and foreign exchange, reflecting the country’s diversified economy.
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4. Morocco – $34.8 Billion
Morocco’s $34.8 billion in external reserves is bolstered by its diverse economy, which includes agriculture, mining, and a growing manufacturing sector. Additionally, Morocco has become one of the leaders in renewable energy, particularly solar power, which has added to its economic stability.
5. Nigeria – $27.4 Billion
Nigeria, a major oil producer in the continent, has $27.4 billion in external reserves. These reserves are crucial for stabilizing the Nigerian naira, managing its substantial import bill, and offsetting external shocks from fluctuating global oil prices. However, despite its large reserves, Nigeria has faced challenges in maintaining stable exchange rates and curbing inflation due to its dependency on oil revenues.
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6. Egypt – $25.5 Billion
Egypt holds $25.5 billion in external reserves. Tourism and a growing manufacturing sector have contributed to this reserve. which have helped boost investor confidence and external reserves.
7. Angola – $14.0 Billion
Angola, another oil-producing nation, has $14.0 billion in reserves. The country’s reserves provide a buffer for its economy, which is heavily dependent on crude oil exports.
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8. Tunisia – $8.8 Billion
Tunisia’s external reserves stand at $8.8 billion, a reflection of its diversified economy, which includes tourism, agriculture, and manufacturing. Despite economic and political challenges since the Arab Spring, Tunisia has managed to maintain stable reserves
9. Kenya – $8.6 Billion
Kenya, East Africa’s largest economy, has $8.6 billion in reserves. The reserves are bolstered by a growing tourism sector and the export of agricultural products. Kenya has used its reserves to stabilize the Kenyan shilling and manage external debt, which has been increasing in recent years.
10. Mauritius – $5.9 Billion
Mauritius, a small island nation, rounds out the list with $5.9 billion in reserves. The country’s economy is highly diversified, with sectors such as tourism, textiles, financial services, and offshore business activities contributing significantly. Mauritius’ prudent financial policies have allowed it to maintain stable reserves, which are essential for maintaining investor confidence.
