The strongest currencies in Africa may not always be the ones that are well-known.
We examine a number of variables, such as inflation rate, GDP per capita, and life expectancy, to ascertain which currencies are reliable in order to guarantee that people residing in each nation can have a reasonable level of freedom and stability.
There are many different currencies used throughout Africa. Some of these currencies have historical significance and have been used by sub-Saharan Africans for generations.
Others have gained popularity recently, making them very closely followed by investors and traders alike.
However, there are ten currencies that stand out above all others as the strongest currencies in Africa.
- Tunisian Dinar (1$ = 3.04 TND)
- Libyan Dinar ($1 = 4.78 LYD)
- Ghanaian Cedis (1$ = 7.87 CEDIS)
- Moroccan Dirham ($1 = 9.92 Dirham)
- Botswana Pula ($1 = 12.07 PULA)
- Seychelles Rupee ($1 = 13.03 SCR)
- South African Rand ($1 = 15.53 ZAR)
- Namibian Dollars ($1 = 15.56 NAD)
- Swazi Lilangeni ($1 = 15.61 SZL)
- Zambian Kwacha ($1 = 17.37 kw)
1. Tunisian Dinar (1$ = 3.04 TND)
Currency Code: TND
Exchange Rate in the Current Market: $1 = 2.86 TND
Inflation Rate in: 5.6%
GDP per capita in: $10,590 USD
The most valuable currency in Africa is the Tunisian dinar. After being established as an accounting unit in 1958, the dinar was first used in 1960. It supplanted the franc at a rate of 1 dinar = 1000 francs.
This currency is comparable to 3.04 Tunisian dinars when converted to dollars.
2. Libyan Dinar
Currency Code: LYD
Exchange Rate in the Current Market: $1 = 4.59 LYD
Inflation Rate: 7.47%,
GDP per capita: 11,100 USD
After Libya gained its independence from Italy in 1951, they introduced the Libyan Dinar to the country.
Following Italy’s unification of North Africa through treaties with France, Britain, and Spain, who invaded Tunisia, the nation was ruled by France and Britain.
One of the strongest currencies in Africa and the second most steady against foreign inflation rates is the Libyan dinar.
Comparatively to other nations, it has a comparatively low volatility index. They presently fix the Libyan Dinar’s exchange rate to the US dollar at $0.22.
However, it decreased from approximately $0.46 in 2011 when Gaddafi was overthrown and killed by rebels supported by NATO forces because he had been printing money, which had sharply increased inflation rates between 2010 and 2011.
Also read: Top 10 Largest Countries in East Africa
3. Ghanaian Cedis (1$ = 7.87 CEDIS)
Currency Code: GHC
Exchange Rate in the Current Market: $1 = 6.12 GHC
Inflation Rate: 9.89%
GDP per Capita: $7,210 USD
The Ghanaian Cedi, which ranks third for being the most stable against overseas inflation rates, is one of the strongest currencies in Africa.
In comparison to other major currencies, one Ghanaian Cedi (GHS) currently trades for roughly $0.16, making it an economical choice that is also a widely accepted form of payment throughout all of Africa.
Since 2011, the Cedi has increased dramatically. According to Ghana’s finance minister Kwesi Botchwey, “the cedi’s strength against the dollar has been a crucial component in the country’s current account performance and foreign exchange reserves accumulation, which have increased to $43 billion.”
Until recently, the Cedi and Nigeria’s Naira were the only two African currencies that did not exhibit an appreciation tendency when compared to the US Dollar.
4. Moroccan Dirham
Currency Code: MAD
Exchange Rate in the Current Market: $1 = 9.18 MAD
Inflation Rate: 1.4%
GDP per capita: $8,030 USD
Since King Mohammed VI took office in 2011 and enacted free-market policies that aided in the expansion of economic stability, the Moroccan dirham has experienced exponential development.
One of the world’s largest phosphate reserves is held by the Moroccan government, which is also very active in the mining sector. Morocco exports the majority of its supply to China.
The nation comes in second place for being a major exporter of phosphates, uranium ore, and automobile components.
5. Botswana Pula
Currency Code: BWP
Exchange Rate in the Current Market: $1 = 11.57 BWP.
Inflation Rate: 6.67%
GDP per Capita: 18,110 USD
The word “pula,” which is Khoisan for “to disperse seeds” or “rain shower,” came to be used in Botswana and signifies “rain.”
One of the most stable currencies in Africa, Botswana ranks sixth for least volatility when compared to inflation rates outside.
The pula’s shallow volatility index indicates that, on average, there is little to no fluctuation in its market exchange rate when compared to the currencies of other nations.
As a result, managing and planning for foreign exchange risk is rather simple. But since 2010, when Botswana’s diamond exports rose by about 20%, it has experienced exponential development.
Currently, the nation produces over half of the world’s diamonds and makes about $900 million a year.
The government of Botswana is likewise comparatively well-funded, and its $53 billion GDP ranks among the largest in Africa.
6. Seychellois Rupee
Currency Code: SCR
Exchange Rate in the Current Market: $1 = 13.43 SCR USD
Inflation Rate: 9.96%
GDP per Capita: $26,120
The British colonial authority launched the Rupee in 1903, and we have been using it ever since.
The Rupee was tied to the US dollar at a set rate of $: 0.023 SCR, however since 2017, when Seychelles held its first general election in five years and switched from the groups (SCR) to the rupee, it has experienced exponential growth (SCR).
Because of the nation’s tropical environment, rich fishing grounds, and stunning beaches, fishing and tourism have increasingly replaced other sources of income for many Seychellois.
The nation’s economy has been robust during the past few years as a result of significant investments made in the tourist, oil refining, and mining sectors.
This has assisted in keeping inflation low and economic growth steady.
7. South African Rand
Currency Code: ZAR
Exchange Rate in the Current Market: $1= 15.60 ZAR
Inflation Rate: 3.27%
GDP per Capita: $12,440 USD
The Rand has been in use since 1961 and was formerly known as the Pound. Several other currencies, including those of South Africa, North Rhodesia, and Transvaal Rhodesia, were supplanted by it.
Due to its economic strength and diversity, South Africa is less susceptible to global shocks than other African nations.
Additionally, the South African Reserve Bank has been focusing on inflation targeting, which has assisted in keeping the currency’s value stable and reducing volatility.
The Rand is a great contender for one of the best currencies that no one is aware of since it is simple to swap both locally and internationally inside South Africa.
8. Eritrean Nakfa
Currency Code: ERN
Exchange Rate in the Current Market: $1 = 15.00 ERN
Inflation Rate: 8%
GDP per capita: 13,200 USD
Since the nakfa replaced the birr in 1997, it has been used under the name lire.
The Nakfa ranks eighth for least volatility to international inflation rates, making it one of the most stable currencies on this list.
Recent political developments have, however, produced instability in the market for this currency.
The Nakfa is an excellent candidate for an undiscovered investment vehicle because it is one of the most liquid fund assets in Africa, is accepted everywhere for international payments, and Eritrean individuals are permitted to hold multiple currencies.
9. Egyptian Pound
Currency Code: EGP
Exchange Rate in the Current Market: $1 = 15.69 EGP
Inflation Rate: 20.85%
GDP per Capita: 13,080 USD
The Pound was once known as the Lira. They have been using it since 1834, when it took the place of a number of other coins, including the Maria Theresa thaler, Indian rupee, and Egyptian piastre.
Since the political unrest that rocked Egypt’s economy in recent years, the country has had a strong economic recovery, with inflation falling from more than 30% to less than 10%.
A steady economy has also been maintained thanks to the Central Bank of Egypt’s efforts to reduce public debt and improve its foreign reserves.
10. Zambian Kwacha
Currency Code: ZMK
Exchange Rate in the Current Market: $1 = 17.59 ZMK
Inflation Rate: 16.35%
GDP per Capita: 11,500 USD
The tenth most stable currency according to our rankings is the kwacha.
The kwacha, which replaced the Zambian Pound, Rhodesian Dollar, and South African Rand in 1964, is the currency that Zambia, formerly known as Northern Rhodesia, has been using.
Zambia had a $20 billion GDP, which was very high. With an average life expectancy of 60 years old, it was regarded as the least developed nation in Africa, placing it last on this list for the human development index (HDI).