Top 7 African Countries with the Weakest Currencies in Late 2023

In the dynamic landscape of global economies, the strength of a country’s currency is a crucial indicator of its financial health and stability. Amidst a backdrop of fluctuating markets and diverse economic strategies, several African countries are grappling with the weakest currencies. This situation poses both challenges and opportunities.

The devaluation of a currency can be a complex phenomenon, influenced by a myriad of factors including political instability, economic policies, global market dynamics, and domestic socio-economic conditions. For these African countries, the weakening of their currencies against the US dollar is not just a number game, it reflects deeper economic narratives unique to each nation.

Understanding the nuances of these weakest currencies in Africa is more than an economic exercise. As we move closer to the end of 2023, Let’s look into some African countries grappling with the weakest currency.

Sierra Leonean Leone

The Sierra Leonean Leone (SLL) epitomizes the economic struggles of Sierra Leone. As the third weakest currency globally, 1 USD equals about 20,833 SLL, a stark reflection of its depreciation since its 1964 introduction. Initially replacing the British West African pound, Leone enjoyed a period of strength, even surpassing the US dollar in the 1980s. However, persistent issues like inflation exceeding 40%, significant national debt, slowed economic growth, and the impacts of the Ebola outbreak have led to its decline. The civil war further exacerbated inflation, necessitating currency reforms. Despite introducing a new Leone (SLE), inflation remains high at 37.8%, highlighting ongoing economic challenges.

Ugandan 

The Ugandan Shilling falls into the list of the African countries with the weakest currencies, with an exchange rate of approximately 3,759 UGX to 1 USD. Introduced in 1966, this free-floating currency symbolizes Uganda’s challenging economic journey. Uganda, rich in resources like oil, gold, and coffee, faces hurdles like erratic economic growth, high debt, and political unrest. 

Post the Amin era in Uganda’s history, despite initial economic recovery efforts, Uganda struggled with financial mismanagement, leading to a significant economic downturn. This downturn made Shilling one of the African countries with the weakest currencies. Nevertheless, the nation’s abundant natural resources offer a glimmer of hope for a substantial economic rebound, suggesting potential for the Shilling’s recovery.

Guinea

The Guinean Franc ranked as the eighth weakest currency globally, reflects Guinea’s economic challenges. With an exchange rate of about 8,621 GNF to 1 USD, this free-floating currency was introduced in 1959. Guinea, a former French colony in sub-Saharan Africa, boasts abundant natural resources like gold and diamonds. 

However, it grapples with high inflation and has been destabilized by military unrest and a surge of refugees from neighboring countries like Liberia and Sierra Leone. These factors collectively contribute to Franc’s low valuation, painting a picture of an economy rich in resources yet struggling with significant internal and external pressures.

Burundi

The Burundian Franc is emblematic of Burundi’s economic struggles, situated in a country where agriculture dominates but industrialization remains minimal. Burundi’s economy, primarily dependent on food production, has been severely impacted by civil unrest and overpopulation, leading to a 25% contraction in its subsistence economy. This backdrop has rendered the Burundian Franc one of the weakest currencies in Africa. 

Congolese Franc

The Democratic Republic of the Congo (DRC) has faced an economic downturn since the 1980s, significantly affecting the value of its currency, the Congolese Franc. The devastating impact of the First and Second Congo Wars halted the country’s economic progress, placing the DRC at a low rank on the UN Human Development Index. This stagnation is further compounded by pervasive corruption, which hinders foreign investment and diminishes interest in the Congolese Franc. As a result, the DRC’s currency remains one of the weakest in Africa, reflecting the nation’s struggles with conflict, corruption, and stalled economic development.

Naira

The World Bank has identified the Naira of Nigeria as the weakest currency in Africa for 2023. Having depreciated by almost 40%, the depreciation of the Naira is linked to the Central Bank of Nigeria’s decision to remove trading restrictions, on the official market. This policy change weakened the currency. The World Bank advised Nigeria to cease printing more money and warned against untargeted subsidies and foreign exchange distortions.

Kwanza

The World Bank also identified Angola’s Kwanza as another of the African countries with the weakest currencies for 2023. With a depreciation of almost 40%, the Kwanza’s decline is attributed to Angola’s central bank stopping its defense of the currency. This decision was influenced by low oil prices and increased debt payments