Africa, an amazingly diverse continent, is home to a multitude of cultures and economic structures. While some African countries are experiencing rapid economic growth and prosperity, others continue to struggle with challenges that make their currencies significantly weaker than their global counterparts.

This FXOpen article explores the intricacies of the African financial landscape to identify the factors contributing to the weaker currencies on the continent. You’ll learn about the lowest currencies in Africa and the reasons for their poor performance.

Top 10 Weakest Currencies in Africa

From political instability and corruption to economic dependence on limited resources, the causes of currency weakness are as diverse as the countries themselves. This article aims to shed light on each country’s unique economic context and explore the socio-political factors that shape their financial future.

Here is an African currencies list sorted from least weak to weakest. The US dollar is used as a benchmark for currency valuation, so each currency is compared to the USD.

*The rates are effective on the 3rd of November, 2023.

10. Angolan Kwanza (AOA)

Exchange rate: 1 AOA = 0.0012 USD

The Angolan economy has faced multiple challenges, including the need for economic diversification, improving infrastructure, and addressing social and economic inequality. Oil production and exports have historically been the primary drivers of the country's revenue and economic growth. In recent years, Angola has been making efforts to diversify its economy away from its heavy reliance on oil. The government has implemented initiatives to develop other sectors, such as agriculture, manufacturing, and tourism.

9. Malawian Kwacha (MWK)

Exchange rate: 1 MWK = 0.00088 USD

Malawian kwacha is the national currency of Malawi, which is a landlocked country in southeastern Africa. Malawi’s currency is not strong, but compared to the other currencies in this list, it is the strongest. Malawi’s economy depends on agriculture, which employs more than 80% of the population. Low agricultural productivity and limited commercialisation lead to stagnant income growth for most Malawians. The country struggles with limited diversification and is vulnerable to external shocks like weather events.

8. Rwandan Franc (RWF)

Exchange rate: 1 RWF = 0.00080 USD

Rwanda has made some progress in recent years, but its currency, the Rwandan franc, continues to face challenges. Rwanda is working to diversify its economy but faces obstacles such as its landlocked geography and dependence on agriculture. The country relies heavily on imports, which makes it vulnerable to fluctuations in the global market. The depreciation of the Rwandan franc fuels inflationary pressures as import prices surge. Rwanda struggles with persistent shortages of foreign exchange, which also limit economic growth.

7. Tanzania Shilling (TZS)

Exchange rate: 1 TZS = 0.00040 USD

Economic development in Tanzania is uneven, with challenges such as corruption, inadequate infrastructure, and limited industrialisation. Tanzania is dependent on imports, which contributes to the country’s weak economy and currency. Despite the recent robust expansion in exports, primarily fueled by the resurgence of tourism, the increased growth in imports driven by domestic demand, coupled with escalating international commodity prices, led to a broadening of the current account deficit (CAD).

6. Congolese Franc (CDF)

Exchange rate: 1 CDF = 0.00038 USD

The Congolese franc is used in the Democratic Republic of Congo (DRC). Similarly to Tanzania and Rwanda, the DRC is heavily dependent on imports. The country is rich in natural resources but struggles with corruption and conflicts, which restrict economic development. Political instability plays a significant role in the country’s economic issues. The currency’s exchange rate is also influenced by foreign exchange reserves, which remain low.

5. Burundian Franc (BIF)

Exchange rate: 1 BIF = 0.00035 USD

Burundi’s economy is dealing with numerous challenges. The country is not economically diversified; its economy is based mainly on agriculture. The export base of Burundi is limited and concentrated in a few key commodities, such as coffee and tea. The country relies significantly on foreign aid. The BIF currency rate is impacted by recurring political instability. These crises have a detrimental impact on economic stability and erode confidence in the BIF.

4. Ugandan Shilling (UGX)

Exchange rate: 1 UGX = 0.00026 USD

Uganda’s economy confronts many economic challenges, including a heavy reliance on agriculture, limited industrialisation, and inadequate infrastructure. The dependency on agriculture makes the country especially vulnerable to fluctuations in commodity prices and weather conditions. Uganda generally runs a negative trade balance, importing more than it exports. This puts pressure on the exchange rate of the Ugandan shilling.

3. Malagasy Ariary (MGA)

Exchange rate: 1 MGA = 0.00022 USD

The Malagasy ariary is the currency of Madagascar. It is a weak currency due to a number of factors, including import dependency and high inflation. Madagascar’s economy is in crisis, and the national currency continues to depreciate at an alarming rate. The country experiences political instability and frequent changes in leadership. Economic growth is hampered by limited foreign investment, a weak business climate, and infrastructure development problems.

2. Guinean Franc (GNF)

Exchange rate: 1 GNF = 0.00011 USD

Guinea, like some other countries in the region, experiences economic difficulties. Guinea has large reserves of natural resources, including bauxite, but faces challenges in fully capitalising on them. Political instability and authoritarianism hinder economic development. Guinea’s economy is susceptible to external shocks like fluctuations in global commodity prices, particularly in the mining sector. In addition, security concerns, including border disputes and regional tensions, disrupt economic activities and lower investor confidence.

1. Sierra Leonean Leone (SLL)

Exchange rate: 1 SLL = 0.00004 USD

The Sierra Leonean leone heads the list of West African countries and their currencies with the cheapest values. The leone has been negatively affected by high inflation, economic weaknesses, and substantial debt burdens. Since 1 July 2022, the currency has been abbreviated as the SLE due to the redenomination of the old leone (SLL) at an exchange rate of 1,000 SLL to 1 SLE, the current rate of 1 SLE to USD is 0.0439.

Final Thoughts

When examining Africa’s weakest currencies, it’s evident that the vulnerability of these countries is driven by a multitude of complex factors. Whether it is political instability, economic challenges, aid dependency, or external shocks, the fragility of these currencies shows the need for sustainable solutions. Africa is a continent with vast resources and untapped potential, and as countries work to address their challenges, there is room for optimism.

In the meantime, traders prefer to focus on major currencies. If you are a forex trader, you can open an FXOpen account and enjoy tight spreads and low commissions, as well as advanced analysis tools on the free TickTrader trading platform.

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