The disadvantages of a weak currency, particularly in Africa, are broad and widespread, affecting all aspects of society. Addressing the basic reasons of currency weakness requires a concerted effort from governments, industry, and international partners. Between 2023 and 2024, African currencies have been susceptible to negative internal and external economic causes.
Fundamentally, a weak currency reduces international investment and economic growth. Investors are apprehensive of depositing their money in countries with unstable currencies, worrying that they would lose value quickly. This lack of investment stifles job creation and economic growth, prolonging the cycle of poverty and underdevelopment.
Furthermore, a weak currency impedes international trade. African exporters are struggling to compete in the global market as their products become more expensive for overseas purchasers. This diminishes export revenues, resulting in trade imbalances and more pressure on the currency.
A weak currency has far-reaching consequences for social and political stability, in addition to economic ones. High inflation and declining purchasing power worsen poverty and inequality, resulting in social unrest and political discontent.
This list uses real-time data from Google Finance and Forbes Currency Converter to reflect each country’s current exchange rate as of February 12th, 2024.
| Rank | Country | Currency/$ | Currency |
|---|---|---|---|
| 1. | São Tomé and Príncipe | 22,281.8/$ | Dobra (STD) |
| 2. | Sierra Leone | 19678.65/$ | Leone (SLL) |
| 3. | Guinea | 8,583.4/$ | Guinean Franc (GNF) |
| 4. | Madagascar | 4528.28/$ | Malagasy Ariary (MGA) |
| 5. | Uganda | 3849.94/$ | Ugandan Shilling (UGX) |
| 6. | Burundi | 2849.21/$ | Burundian Franc (BIF) |
| 7. | Democratic Republic of Congo | 2752.27/$ | Congolese Franc (CDF) |
| 8. | Tanzania | 2540.00/$ | Tanzanian Shilling (TZS) |
| 9. | Malawi | 1680.27/$ | Malawian Kwacha (MWK) |
| 10. | Nigeria | 1500.50/$ | Naira (NGN) |