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Insight & Analysis - February 16, 2022

5 African Countries that Print Money Mindlessly

Printing money, in a simplified scenario, will only result in inflation.

Why do some African countries print excess money when printing more money has no effect on economic activity? Instead, it increases the amount of cash in circulation, which causes consumers to demand more goods. But if enterprises have the same amount of goods, they will respond by raising prices.

Printing money, in a simplified scenario, will only result in inflation.

Money variable is modified by the velocity of circulation in the equation that connects money to prices and production. If a central bank issues twice as much money but receivers only spend half as often, the price level should remain unchanged. There will only be an inflationary explosion if people or the government spend the extra money created on top of their normal spending.

Venezuela and Zimbabwe have demonstrated how a government can lose entire control of its currency and cause pricing chaos.

Here are 5 African countries that print money mindlessly.


african country print money

Zimbabwe had the second-highest rate of hyperinflation on record in 2008. In November 2008, the estimated inflation rate was 79,600,000,000%.

That equates to a daily inflation rate of 98.0 percent. Prices would roughly double every day. With an unemployment rate of about 80% and a virtual collapse in normal economic activity, it was also a period of tremendous suffering and destitution. Printing money in reaction to a series of economic shocks resulted in hyperinflation.

In 2021, the Zimbabwean central bank issued a 50-dollar note, which is the biggest denomination since the country’s return to Zimbabwean dollars (ZW$) as the sole currency in 2019. It joins the ranks of other denominations whose hyperinflation has eroded value.


african country print money
Source: Middle East Monitor

Sudan’s inflation has reached one of the highest levels globally, and economists warn that unless the government’s budget deficit and money supply are brought under control, the country risks triggering hyperinflation.

The skyrocketing prices have exacerbated an economic crisis affecting millions of ordinary Sudanese and jeopardised a political transition based on a military-civilian power-sharing agreement.

The government has racked up massive budget deficits by subsidising gasoline prices and printing money to cover the gaps.

According to the official statistics department, this has debased the currency, causing it to weaken against other currencies and driving inflation up to 230 percent on an annual basis in October.

Because of the growing prices, many people are spending their money quickly, especially on long-lasting things that retain their value.

South Sudan

african country print money
Source: Keesing Platform


In 2021, South Sudan launched a new banknote with a bigger denomination to combat the country’s persistent hyperinflation.

According to the bank governor, the initiative to launch the new Pound bill of 1000 aims to moderate rapid inflation and constant currency depreciation, which has undermined the currency’s face value in recent years.

However, this has not helped as staple food prices in 2021 were 60-120 percent higher than in 2020.

In November, fuel and diesel prices jumped by SDG42 to SDG362 per litre and 347 SDG per litre, respectively. This is due to the persistence of political uncertainty and the international community’s economic support remaining on hold. This situation is seen to prevail through early 2022.


African countries print money

In 2021, it was speculated that the Bank of Zambia’s (BoZ) increased lending to the government is akin to printing more money, as seen by the increasing amount of cash in circulation.

According to recent BoZ data, the central bank’s lending to government more than doubled to 7.0 percent of GDP at the end of December 2020, up from 3.1 percent at the end of December 2019, consistent with trends in narrow money (M1) supply. It increased by 46.6 percent year-on-year at the end of December 2020, up from just 4.8 percent at the end of December 2019, consistent with trends in narrow money (M1) supply, which increased by 46.6 percent year-on-year at the end.

Economist Caesar Cheelo noted that the data backed the central bank’s decision to print more money. The printing of money was also about expanding the circulation of the current supply.


African countries print money
Source: Foreign currency and coin exchange

The first of Angola’s new polymer banknotes was released in 2021. Polymer banknotes of 200 kwanza ($0.35) were first circulated on July 30 2021. Then 500, 1,000, and 2,000 banknotes followed, all of which was printed on a new polymer substrate. This new substrate will allow the country to incorporate tougher security.

Despite this, the government is severely indebted and relies on oil exports to China to pay off its debts, putting it at risk of decreasing oil prices. The government has been attempting to diversify the economy and renegotiate debts, but it relies on Beijing for assistance.


READ MORE: 6 African Countries Where Insects are a Staple Food


1 Comment

  1. Dear
    I would like to know the truth about paper money on African continent in hyperinflation rates. How are we going to make playfield equal to other currencies of the world.

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