The 3 Worst-Performing African Currencies You Should Know

A recent report shows that five of the ten worst-performing currencies in the world are from Africa. These currencies are struggling due to a shortage of dollars, rising prices, and unstable commodity markets.

The three worst African currencies in the report are the Zambian kwacha, the Angolan kwanza, and the Nigerian naira.

Countries like Nigeria and Angola, which depend heavily on oil, are especially affected when oil prices drop.

Experts also mentioned poor management of currencies and economic imbalances as reasons for these countries’ weak economic performance.

Zambia

The Zambian kwacha hit its lowest point in June, trading at 26.4698 per dollar, according to Bloomberg. The report blames this on low national reserves caused by financial instability and droughts, which have increased the need for food imports and external loans.

In response, the International Monetary Fund (IMF) increased financial aid to Zambia from $1.3 billion to $1.7 billion to help cope with the drought, which has led to crop failures and power shortages.

However, Zambia’s economy is still struggling, especially with paying off foreign debts, keeping the kwacha weak.

Angola

Angola’s kwanza has seen its worst drop in 25 years, losing 12% of its value this year and trading at 950 per dollar. This decline is tied to Angola’s heavy reliance on oil, which provides over 60% of its budget. As global oil prices fall, the country’s reserves of hard currency shrink, worsening economic problems.

Nigeria

Despite efforts to improve the naira and revive the economy, Nigeria is still facing liquidity issues and a shortage of dollars. The naira currently trades at 1,580 per dollar, and there is uncertainty about how it will perform by the end of the year.

While falling oil prices have worsened Nigeria’s situation, the report points out that slow government reforms and unpredictable monetary policies are the main reasons for the naira’s undervalued state.

In summary, the report highlights how reliance on oil and poor financial management are causing several African currencies to struggle on the global stage.