It has been the craving of many individuals to know about the nature of their countries currencies, what are the weakest currencies in Africa currently. This has been a hot topic of discussion on many lips stimulated by several events in individual countries (particularly African nations) such as inflation, the high cost of living and most importantly the stock exchange market. It is necessary to have a clue on how your local currency rates outside the shore of your country. Thus, in this article, we will be discussing on the Top 10 cheapest currencies in Africa, and it’s noteworthy to understand that most Currencies in the world are often measured against the American Dollar. Reason has to be that the American Dollar has vast global use where a large percentage of nations accept US Dollars for payments.
Top 10 Weakest Currencies In Africa 2019
|Rank No.||Lowest African Currencies||Value To $1|
|1.||Sao Tome And Principe Dobra||21050.5996 STD|
|2.||Guinean Franc||9,195.00 GNF|
|3.||Sierra Leone Leon||8,600.00 SLL|
|4.||Ugandan Shilling||3,711.15 UGX|
|5.||Malagasy Ariary||3,610.00 MGA|
|6.||Tanzania Shilling||2,308.20 TZS|
|7.||Burundian Franc||1,820.00 BIF|
|8.||Congolese Franc||1,630.00 CDF|
|9.||Rwandan Franc||885.00 RWF|
|10.||Malawian Kwacha||728.00 MWK|
Short details on each country on the list
Top 10 Weakest Currencies In Africa 2019
- 1. Sao Tome And Principe Dobra (STD)
This country has the lowest and poorest currency in the shore of Africa. This country can be found on the Western equatorial coast of Central Africa. Interestingly, there was no human nor any found living in this country as early as the 15th century until it was discovered by the Portuguese explorers who was the one that took their time to inhabit this area and served as the trade center of Africa then. They major in the cultivation of Cocoa and other agricultural produces
This country remains one of the countries in the whole of Africa that has the most stable democracy.
- 2. Guinea Franc:
The currency of Guinea is the Guinean franc (code: GNF). The Guinea Franc is subdivided into 100 centimes, but no centime denominations were ever issued. The Republic of Guinea is an extremely poor country having an approximate population of 12.9 million people as of 2016. Guinea has the world’s largest reserves of bauxite (mining) as well as the largest high-grade iron ore reserves, gold and diamonds included. Bauxite mining and alumina production is the major workforce in the country that provides 80% of the nation’s foreign exchange.
- 3. Sierra Leone Leon
This count is also called Salone in an informal way, this country shared boundaries with many other Africa countries like of Guinea, and with the Atlantic Ocean. It is characterized by the tropical climate which has different environment ranging from Rainforest to Savanna.
- 4. Ugandan Shilling
Following high inflation, a new shilling (UGX) was introduced in 1987 worth 100 old shillings. The shilling is used for all transactions in Uganda. Yet it has a low exchange rate against the dollar.
Most of the nation’s budget and project such as the funding of energy-related, roadway, and other public-works infrastructure projects is mostly financed externally through applying for low-interest loans. This occurs due to the huge debt servicing for these loans incurred by the nation is expected to rise. The strong commitment to economic freedom making Guinea a rapidly developing country in the early 90s has noticeably reduced. Poor governance and expensive business licensing requirements have trampled the development of the private sector.
- 5. Malagasy Ariary
This country can be located in the Southeast of Africa. It was not long ago this country was established, it was established in the year 1958 which has the name Democratic Republic of Madagascar in late 1975. The result of been the poorest and lowest country cannot be farfetched from the fact that this country is a newly created country and still a developing country. Before the formation of this country, there has existed so many chase and fierce protest that lead o creation of this country. So this Currency is one of the Lowest Currency and Poorest in the whole of Africa countries.
- 6. Tanzanian Shilling:
The shilingi (sign: TSH; code: TZS) is the Tanzanian currency and it is subdivided into 100 senti (cents in English). The Tanzanian shilling was introduced to replace the East African shilling on 14 June 1966. Tanzanian government are ambitious to develop and attract foreign investment through creating a better business environment by having access to get finance and also create enabling infrastructures, sadly, this drive has been hindered by an ancient structural issue which includes widespread corruption in its government, poor management of public finance, as well as underdeveloped legal framework. The Tanzanian Franc purchasing power is quite low and not encouraging.
- 7. Burundi Franc:
The official currency of Burundi is the Burundi Franc. Due to its weak economy, with 53% of citizens living below the poverty line. The nation heavily relies on humanitarian aid from other nations.
Due to its weak economy, 53% of her population are living below the poverty rate. The nation depends heavily on humanitarian aid from other nations. Burundi economy is rated the 157th freest in the world (as of 2018). On research, we found out that the government has no development policy and unavailability of resources to help them counter pervasive poverty. Thereby, it employs the strategy of using subsidies and higher public-sector salaries to make the people submissive thereby strengthening loyalty to the government.
- 8. Congolese Franc
This county can be amphoteric in nature, the larger part of this country was formally called Zaire which her capita name is Kinshasa and sometimes called Congo-Kinshasa and other smaller part is known as Brazzaville which has its capital name as Brazzaville also. This is another country in Africa that has various endemic features and different demographic experience you can enjoy as a tourist. This county as a whole was known as the kingdom of Congo before she gains her Republic in the year 1971.
- 9. Rwanda Franc:
The franc became the Rwandan currency in 1916. The currency of Belgian Congo was used in Rwanda until 1960 when the Rwanda and Burundi franc was introduced. Rwanda began to issue its own francs in 1964.
To an extent, the economic development achievements deserve to applaud, yet, there still exists an unsustainable and self-defeating policy of import substitution and expansionary fiscal policy. In addition to the reason why it appears on the list includes continuing institutional weaknesses which has hindered the growth of the nation’s economy. Not forgetting the poor judicial system which lacks transparency and independence; more so, foreign investment is hindered by ongoing political instability.
- 10. Malawi Kwacha:
The kwacha is the currency of Malawi introduced in 1971, replacing the Malawian pound. The Kwacha is divided into 100 tambalas. It replaced other types of currency, namely the South African rand, the UK pound sterling, and the Rhodesian dollar, that was previously used in the Malawian economy.
Malawi rated the 148th economy(as of 2018). Going back in time, history as you call it, the economic performance of the landlocked nation located in East Africa has been constrained by macroeconomic instability, political inconsistency, poor infrastructure, rampant corruption, limited connectivity to the region and the world, and poor health, high population growth and education outcomes that hinders labor productivity. Therefore, all these constraints have heavily led to the currency of this nation not having a high purchasing power.
Factor Contributing To Devaluation Of A Currency
Ideally, a currency does not just lose its value in a bleak of an eye, devaluation occurs as a result of some factors which play paramount roles in either giving much value to a currency or going as far as shrinking it dead and make the value of the currency become useless in the international market.
- Interest Rate
The interest rate is atop and is one of the militating factors that cause a devaluation of the currency. The interest rate a certain country assigned in or on a specific investment capital tends to pulls more investors to the investment arena of such nation. If a country maintained a very encouraging interest rate, assuredly there will be more investors even those from outside the wall of the particular country which brought about international participation and this will invariably affect the value of the nation’s currency. Therefore, saying, in essence, is that the higher the interest rate the higher the value of a nation’s currency.
- Country Debts / Government Inherited Debt
Undoubtedly, this is one of the threat and reason why currency is devalued. Any nation especially most Africa countries are found of getting a loan from the international community. Sadly, some of these leaders are so corrupt that they willfully don’t want to pay back the loan within the agreed time and this act invariably pushes the debt to a new government, thus, most of the government spent time attending to a debt of over 10 years back.
- Political Instability
This is the predominant issue in most Africa countries. There is inconsistency in the system of government, lack of continuity and ability of any new government to promote what a new administration has started.
This is an issue happening in African nations. High inflation is fast factors that devalue a nation’s currency quickly and as well as crushes the economy of any nation like a killer jet. Whenever there is inflation in any country, the currency values depreciate, also a total number of goods available for exportation drops, the production process is also affected as well as the distribution chain is drastically affected, this has a resultant effect in currency value of any nation.
Like inflation, recession is also a super buster effect that occur due toa country financial error, if some rules are misapplied or new development in the business environment, when there are issues with the financial body of a particular nation, it results in a lag and downtime in the economic system of such a nation and this plays a major factor in the evaluation of a currency.
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Conclusion on the Top Ten Weakest Currencies in Africa 2019
I hope you enjoyed reading through this piece as we have been able to take you on a ride to the countries of Africa having the Weakest Currencies. It is important that we have to do justice to this topic. It is hoped that after reading the article enlightens you and gear you up to action if your country is found on the list. More so, the earlier these countries rise up to fix things the better it’d be because there is fierce competition out there
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