The exchange rate is a crucial issue due to its impact on macroeconomic expansion and trade dynamics. It influences decisions made by individuals, corporations, and governments, determining the worth of different currencies. Instabilities in currency values can affect visitors, foreign investors, and governments. Higher currency value makes exports more expensive and imports less expensive. This worsens a nation’s trade balance. Conversely, a lower currency value raises import costs and lowers export costs, increasing a nation’s trade balance. This post is about the top 10 weakest currencies in Africa in 2024.
The US dollar is widely considered the most powerful currency. It is near the top of the 180 traditional fiat currencies recognized as legal tender worldwide. The weakest currencies trade at tiny fractions of a dollar, and some require tens of thousands of units to buy just $1. This list reveals the top 10 weakest currencies in the world. See the strongest currencies in the world here!
The World Bank has ranked the Nigerian naira among the worst-performing currencies in the African continent, with a weakened naira of nearly 40% against the US dollar since June. The naira and Angolan kwanza have experienced a year-to-date depreciation of nearly 40%. The weakening of the naira was triggered by the central bank’s decision to remove trading restrictions on the official market, while the kwanza was defended due to low oil prices and increased debt payments. Despite this ranking, the Nigerian naira is not on the top 10 list of the weakest currencies in the continent.
Other African currencies with significant losses include South Sudan (33%), Burundi (27%), the Democratic Republic of Congo (18%), Kenya (16%), Zambia (12%), Ghana (12%), and Rwanda (11%). Parallel exchange market rates are also contributing to inflationary problems in some African countries.
Weakest Currencies in Africa in 2024
1. Sierra Leonean leone (SLL)
The Sierra Leonean leone, introduced in 1964, is the weakest currency in Africa and the world’s third weakest currency. Key exports include timber, diamonds, gold, and industrial metals. However, its value has been dragged down by over 40% inflation, significant debt, the economic slowdown, and the long-term effects of the Ebola outbreak, affecting its value and trade.
As of the time of writing, 1 US dollar is equivalent to 19,750.00 Sierra Leonean leones.
2. Guinean franc
The Guinean franc, introduced in 1959, is the second weakest currency in Africa and ranks eighth globally. Guinea, a former French colony in sub-Saharan Africa, faces high inflation, military unrest, and a refugee influx. The first Guinean Franc was introduced in 1995, and the 500 note is currently the smallest denomination in circulation. Guinea-Bissau has a population of 2,026,778. It is one of the weakest currencies in Africa, exchanging for around 9,953.00 GNF for 1 USD. The country’s political instability and economic challenges have hindered its growth.
Guinea is one of the African countries with the most inflated currencies; the country’s currency is weak due to the high inflation rate, progressing poverty, and devalued currency
Guinea-Bissau is a country in West Africa; it is the only country with Islam as its predominant religion and Portuguese as its dominant language. Guinea-Bissau also has a coastline in the Atlantic. However, Guinea-Bissau is a much smaller country; it measures 36,125 square kilometers and has a population of 2,026,778.
3. Malagasy Ariary
Madagascar’s currency, the Malagasy Ariary, is the third weakest currency in Africa, replacing the Franc as the official currency in 2005. The island nation, connected to India and East Africa, exports over 25% of its GDP in agricultural, forestry, and fisheries goods.
The currency’s low exchange rate of AR3,735.00 to 1 USD disadvantages the country’s purchasing power. Madagascar is the fourth-largest island in the world. It has a population of 28.8 million and is located off the coast of East Africa.
Despite economic stability, the country remains poor, with 69% of the population living below the poverty line and earning just one dollar a day. The currency’s weakness stems from issues like coups and insecurity, which hinder economic growth.
Madagascar’s diverse plant and animal life, potential for tourism, and other important sectors contribute to its economy.
4. Ugandan Shilling
East African landlocked Uganda is rich in natural resources like gold, oil, and coffee, but it has also seen political upheaval, huge levels of debt, and erratic economic development. Originally introduced in 1966, the Ugandan shilling is now the fourth-weakest currency in Africa, exchanging for around 1 USD = 3665.00 UGX. The nation, which was colonized by the British and attained independence in 1962, is home to almost 45 million people and has a geographical area of 421,034 km2.
Uganda started an economic rehabilitation program following the end of the Amin regime, but mishandled funds and unstable economic conditions caused the country to fall back into crisis in 1984. However, because of the abundance of natural resources, the economy has room to grow, and some economists predict a significant economic recovery.
Uganda has not been very fortunate as regards leadership; it has suffered several coups as well as dictatorships and the attendant brutality that comes with them. As a result, the economy has remained stagnant, and the people have been impoverished.
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5. Burundian Franc
The Burundian franc, an official legal tender in Burundi, is ranked fifth on Africa’s weakest currency list. Burundi is a landlocked country in East Africa, bordered by Rwanda, Tanzania, and the Democratic Republic of the Congo. The country is rich in commodities such as oil, gold, and coffee but has been plagued by unstable economic growth, high debt, and political unrest.
The Burundi Franc currently exchanges for 1 USD equaling USH 3,778.85. The country is bordered by Lake Tanganyika. According to the World Bank, Burundi has a low-income economy, and 80% of its people work in agriculture.
Despite its low value, the Burundi Franc has upside potential due to its significant natural resources. However, the country has suffered several coups and dictatorships, leading to stagnant economic growth and impoverished people.
6. Tanzanian shilling
Tanzania’s economy is primarily driven by tourism, mining, and agriculture, with only 25% of the GDP being made up of the agricultural sector. The Tanzanian shilling, which replaced the East African shilling on 14 June 1966, is highly exchanged for 1 USD. It is another extremely low currency; it exchanges for around TSh2319.26 for 1 US Dollar
The country is located in East Africa and shares borders with Uganda, Kenya, Mozambique, Malawi, Zambia, Rwanda, Burundi, and the Democratic Republic of the Congo. Tanzania has faced instability due to its history of socialism, capitalism, and the 1978 invasion of Idi Amin by the Tanzanian government. These factors have significantly impacted the economy and continue to impact the country today.
7. Congolese Franc (CDF)
The Democratic Republic of the Congo (DRC) uses the Congolese Franc (CDF) as its national currency, replacing the Zaïre. The country’s main economic resource is mineral reserves, with 90% of exports coming from mining. Agriculture, animal husbandry, fisheries, and forestry employ over three-fourths of the workforce, generating over two-fifths of GDP.
The country’s economic development has been hindered by conflicts and corruption, affecting foreign investment and interest in the currency.
The Congolese Franc is among the weakest currencies in Africa and currently exchanges at 1 USD = 2476.00 CDF.
8. Rwanda
Rwanda is a heavily agricultural nation with 70% of its population working in agriculture. The Rwanda Franc was introduced as a legal tender in 1916. The country’s economy relies on small, semi-subsistence farms and exports of tea and coffee. Since its introduction, the Franc has experienced a decline, currently selling at around 1127.05 RF to 1 US Dollar.
Rwanda, with a population of 13.2 million, has a turbulent history with revolts, coups, assassinations, and wars, including the Rwandan genocide. Despite a dictator in power, the country’s economy has not grown, making its franc one of the weakest currencies on the continent.
9. Malawian Kwacha
Malawi’s official currency, the Kwacha, has been in use since 1970. 90% of its citizens reside in rural areas. 40% of the GDP and 88% of export earnings come from agriculture. The Kwacha is one of Africa’s least expensive currencies, currently trading for around K1,025.42 per USD.
However, its current trend is up, suggesting it may continue to strengthen.
The Kwacha replaced other currencies like the UK pound sterling, South African rand, and the Rhodesian dollar, which had previously circulated through Malawi’s economy. The exchange rate of the Kwacha undergoes periodic adjustments, but since 2014, it has floated.
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The Malawian Kwacha is low in value because the economy is poor; and the economy is poor because it has a poor social structure. This country of 20.5 million people living in 118,484 km2 of land, has suffered the ill fate of having despotic rulers who have trampled on citizens’ rights, leading to countless protests and other forms of social unrest. The military have often been used to put down such protests, leading to loss of human lives.
10. Sudanese Pound
The Sudanese Pound is the currency of the Republic of Sudan, issued by the Central Bank of Sudan. The country, which gained independence in 2011, employs 80% of its labor force in agriculture, accounting for a third of its GDP.
However, a significant portion of this produce is subsistence farming, leading to poverty among many people. The currency is a significant part of Sudan’s economy and is among the weakest currencies in Africa.
