Currency depreciation is a pressing issue in many Sub-Saharan African economies. Several currencies have experienced severe devaluation due to factors such as inflation, trade imbalances, declining foreign reserves, and political instability. In this blog, we examine the ten weakest currencies in 2025, their current exchange rates, and the underlying economic forces shaping their decline.
1. Nigerian Naira (NGN)
Exchange Rate (2025): 1,549 NGN/USD
Depreciation Rate (2024-2025): 104.38%
The Nigerian Naira has undergone a substantial devaluation, with its exchange rate deteriorating from approximately 758 NGN per USD in 2023 to about 1,549 NGN per USD in 2024, marking a 104.38% decline. This sharp depreciation is primarily attributed to policy mismanagement, dwindling foreign reserves, and an overreliance on oil exports. Fluctuations in global oil prices have exacerbated the country's economic challenges, leading to severe currency devaluation.
2. Malawian Kwacha (MWK)
Exchange Rate (2025): 2,000 MWK/USD
Depreciation Rate: 39.1%
The Malawian Kwacha has depreciated by approximately 39.1% in 2024. This decline is driven by rising import costs and a shortage of foreign direct investments, leading to foreign exchange shortages that have significantly weakened the Kwacha.
3. Rwandan Franc (RWF)
Exchange Rate (2025): 1,392 RWF/USD
Depreciation Rate: 19.41%
The Rwandan Franc has experienced a depreciation of about 19.41%, with its exchange rate moving from 1,166 RWF per USD in 2023 to approximately 1,392 RWF per USD in 2024. Despite Rwanda's robust economic growth in various sectors, the currency's devaluation is influenced by external debt obligations and increasing import costs.
4. Congolese Franc (CDF)
Exchange Rate (2025): 2,866 CDF/USD
Depreciation Rate: 16.65%
The Congolese Franc has lost about 16.65% of its value against the U.S. dollar, shifting from 2,457 CDF per USD to approximately 2,866 CDF per USD. Factors contributing to this decline include ongoing conflict, economic mismanagement, and disruptions in vital export routes due to civil unrest in the eastern provinces.
5. Angolan Kwanza (AOA)
Exchange Rate (2025): 912 AOA/USD
Depreciation Rate: 10.68%
The Angolan Kwanza has depreciated by approximately 10.68%, falling from 824 AOA per USD to around 912 AOA per USD. As an oil-dependent economy, Angola's currency struggles are closely tied to fluctuating oil prices, which directly impact national revenue and foreign exchange reserves.
6. Sierra Leonean Leone (SLL)
Exchange Rate (2025): 23,000 SLL/USD
Depreciation Rate: 8.95%
The Sierra Leonean Leone has experienced an 8.95% depreciation. The country's political uncertainties and limited export diversification have hampered economic resilience, leading to a lack of investor confidence and a pressing need for fiscal reforms.
7. Malagasy Ariary (MGA)
Exchange Rate (2025): 4,685 MGA/USD
Depreciation Rate: 5.77%
The Malagasy Ariary has seen a depreciation of approximately 5.77%, moving from 4,430 MGA per USD to about 4,685 MGA per USD. Economic challenges such as trade deficits and climate-related impacts on agriculture have hindered Madagascar's ability to maintain a stable currency.
8. Burundian Franc (BIF)
Exchange Rate (2025): 3,150 BIF/USD
Depreciation Rate: 5.63%
The Burundian Franc has depreciated by about 5.63% against the U.S. dollar. This decline is largely due to inadequate foreign reserves and ongoing socio-economic challenges within the country.
9. Comorian Franc (KMF)
Exchange Rate (2025): 466 KMF/USD
Depreciation Rate: 4.75%
The Comorian Franc has experienced a 4.75% decline, from 445 KMF per USD to approximately 466 KMF per USD. This slight depreciation reflects the economic vulnerabilities faced by small island nations, including dependence on foreign aid and remittances.
10. Ugandan Shilling (UGX)
Exchange Rate (2025): 3,686 UGX/USD
Depreciation Rate: 2.17%
The Ugandan Shilling has shown relative stability with only a 2.17% depreciation, moving from 3,608 UGX per USD to about 3,686 UGX per USD. This minimal decline underscores the importance of prudent fiscal management and economic diversification. Uganda's efforts to maintain a balanced economy have allowed the Shilling to avoid the steep declines observed in other African currencies.
Key Factors Contributing to Currency Weakness in Sub-Saharan Africa
Several interrelated factors contribute to the depreciation of currencies in Sub-Saharan Africa:
Economic Instability: Political unrest, corruption, and conflict reduce investor confidence, leading to capital flight and currency devaluation.
High Inflation: Rising domestic prices erode purchasing power, weakening the currency's value.
Export Dependency: Reliance on a narrow range of exports, such as oil or minerals, makes economies vulnerable to global price fluctuations, adversely affecting currency stability.
Trade Imbalances: Importing more than exporting leads to a higher demand for foreign currencies, devaluing local currencies.
External Debt: High levels of foreign-denominated debt strain financial resources, as servicing these debts requires substantial foreign currency reserves.
Policy Mismanagement: Inconsistent or unsound economic policies can undermine market confidence, leading to currency depreciation.
Addressing these challenges requires comprehensive economic reforms, including diversification of exports, prudent fiscal management, political stability, and the development of robust financial institutions. Such measures can enhance investor confidence and contribute to the stabilization of local currencies in Sub-Saharan Africa.
By Donald Masimbi