10 African currencies with the weakest exchange rates against the dollar in 2021
For years, Africa’s largest economy by GDP, Nigeria, has been battling to save the value of its currency and maintain relative exchange rate stability.
While this “battle” hasn’t really yielded much results, it may interest you to know that Nigeria’s forex crisis is not the worst on the continent.
In this article, we will be looking at the top ten African countries with the weakest currencies. This is only for information purposes. It is, by no means, intended as a “name and shame” ploy.
Before we proceed with this listicle, here are a few things you need to know about currency valuation and why a currency’s exchange rate against other currencies could either affect you positively or negatively.
Simply put, a currency’s value is determined by its exchange rate against other currencies in the world. Let’s explain this by making a few assumptions. Assuming your monthly salary as a Ugandan doctor in Kampala is Ush2.2 million and you need to pay tuition for a graduate course at Harvard University, how many months’ salaries would you have to convert in order to get the $51, 900 which is the average cost for a master’s at the ivy league school?
It’s obvious that you will need a whole lot of Ugandan shillings for this one.
In its definition of currency valuation, The Economic Times said this: “the exchange rate of a sovereign country’s currency vis-a-vis others’ depicts the monetary-value nexus between their goods and services”.
What this means is that during international trade, which every country engages in by the way, exports by countries with weaker currencies are cheaper to countries with stronger currencies. On the flip side, imports by countries with weaker currencies are typically more expensive.
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Now, while it is the case that some major exporting countries like China may intentionally weaken their currencies in order to boost exports, research by Business Insider Africa showed that the weakness in most African currencies was majorly caused by poor economic fundamentals, among other factors.
Here are 10 African currencies with the weakest exchange rate against the dollar in 2021
That said, let us now focus on the African countries with the weakest exchange rate in 2021. Note that we have chosen the dollar as the benchmark currency because it is basically the most used currency in international trade.
Also note that in order to select the top weakest currencies in Africa, we converted the sum of 1000 in each of these currencies to the dollar.
Fair warning: Exchange rates are volatile. So, the figures may have changed as at the time you are reading this article.
- São Tomé and Príncipe’s dobra: This is currently the weakest and less-valued currency in Africa. Checks by BI Africa, as at the time of publication, shows that when converted to dollars, STD 1000 would give you $0.047
- Burundian franc: Burundi’s sovereign currency is currently the second weakest and less-valued legal tender in Africa. The currency is so weak such that FBu1000 can only give you $0.050.
- Sierra Leonean Leone: This currency, which is used in the West African country of Sierra Leone, is the third weakest in Africa. SLL 1000 converts to $0.094.
- Guinean Franc: The fourth weakest currency in Africa is the Guinean Franc. GFr 1000 would give you just $0.10.
- Malagasy Ariary: Madagascar’s currency ranks 5th on this list. If you convert Ar 1000 1000 to the dollar you will get $0.25.
- Ugandan Shillings: The 6th weakest currency in Africa goes to Uganda. This is because when you convert Ush 1000 to the dollar, you will only get $028.
- Tanzanian Shillings: The 7th weakest currency in Africa converts Tsh 1000 to just $0.43.
- Congo & DR Congo’s Congolese Franc: This currency, which is used in both the Republic of Congo and the Democratic Republic of Congo, is the 8th weakest in Africa. When converted to the dollar, CDF 1000 would give you $0.50.
- Rwandan Franc: Rwanda’s currency ranks number nine on this list. When converted, RWF 1000 equals to $1.
- Malawian kwacha: The tenth weakest currency in Africa goes to Malawi. MWK 1000 is converts to $1.22.
