How are African currencies rated against the US dollar? What’s their worth and which currencies are ranked at the top from Africa? Here, see the top 10 strongest currencies in Africa today:
10). Egyptian Pound
The Egyptian pound (EGP), denoted by the sign E£, is the official currency of the Arab Republic of Egypt and the 10th highest currency in Africa. Initially backed by precious metals, the Central Bank of Egypt started a controlled float in 2001 before switching to a float in 2016.
Prior to the float, one dollar was equivalent to 8.8 Egyptian pounds. After undocking, a dollar was valued at about fifteen Egyptian pounds.
The EGP’s usage as an unofficial currency in locations such as Sudan and the Gaza Strip contributes to its status as one of the highest currencies in Africa.
In reaction to the harmful COVID-19 lockdown measures, interest rates were reduced to assist in stabilising the currency. However, the nation continues to have one of the highest real interest rates in the world, which has aided in the sale of treasuries and the protection of the currency but discouraged borrowing.
The Egyptian pound is also one of the highest currencies in Africa because Egypt has the second-highest nominal gross domestic product on the continent, behind only Nigeria.
9). South African rand
The South African Rand (ZAR) is South Africa’s official currency and the ninth-highest currency in Africa. The rand was launched in February 1961 and, until the end of apartheid, had a relatively steady exchange rate with the US dollar.
Since then, its value has decreased as the South African economy has grown more integrated with the global economy. Several nations in the area, including Lesotho, Namibia, and Swaziland, peg their currencies to the South African Rand, which can only strengthen its position as one of the highest currencies in Africa.
In essence, the ZAR’s value is related to the price of gold, which was South Africa’s primary export in its early years. The rand, however, remains at the mercy of global uncertainty owing to South Africa’s frail economy and unstable political scene.
8). Zambian Kwacha
The Zambian Kwacha (ZMW), which ranks eighth on our list of the highest currencies in Africa, is the official currency of Zambia, issued by the Bank of Zambia, and recognised as legal money for all transactions.
It is not extensively traded by currency speculators since it is susceptible to inflation and has the propensity to be a highly unstable currency, providing little profit to those who are interested in currency trading.
Zambia is the biggest copper producer in Africa, hence, its currency is prone to erraticism based on the fluctuation of commodities prices on the global copper market.
It is a currency that fluctuates in value relative to other currencies, and as soon as the ZMW was created, rampant inflation became a severe issue.
The Zambian Kwacha’s difficult-to-control inflation rate has contributed to the plight of many Zambians but has not stopped it from becoming one of the highest currencies in Africa.
Those that are compensated only in ZMW, however, have limited buying power outside the nation and may not be able to pay for numerous consumer products and services manufactured outside of Zambia.
7). Eritrean Nakfa
The Nakfa (Nfk) is one of the highest currencies in Africa and Eritrea’s official legal tender. It has experienced stability throughout the years as a result of the government’s preference for a fixed exchange rate versus floating the currency.
6). Seychellois Rupee
The Seychellois Rupee (SR) is one of Africa’s highest currencies and is currently the strongest currency in East Africa as a result of the country’s market economy.
Foreign investment as well as the bloom of agriculture, fisheries, and small-scale industrial industries have also instigated an economic recovery. This has contributed to the diversification of Seychelles’ gross domestic product, resulting in the rupee’s rating as the sixth-highest currency in Africa.
The fact that Seychelles has the largest GDP per capita in Africa has also contributed to the SR’s ranking as one of the highest currencies in Africa.
Another factor behind the high value of the Seychellois rupee is that Seychelles is the smallest nation with an autonomous monetary policy.
5). Botswana Pula
The Botswana pula (BWP) is Botswana’s official currency and the sixth-highest currency in Africa. It has been in use since 1976, eleven years after its independence from the United Kingdom.
Despite the 2005 depreciation of the legal tender, the BWP remains the strongest currency in Southern Africa, with a Pula equaling 0.08 dollars.
Pula is synonymous with rain in Setswana, the most widely spoken language in the nation. The absence of precipitation across the majority of the country’s surface implies that its basic definition and phrase are regarded as a gift.
Due to the country’s robust economy and generally stable democracy, the BWP has been able to remain one of the most valuable currencies in Africa. It is also an appealing currency since it is traded on Africa’s biggest stock market, the Johannesburg Stock Exchange.
4). Moroccan dirham
The DIRHAM (MAD), the primary unit of legal tender in Morocco, is the fourth highest currency in Africa. It is a currency that cannot be traded outside the nation and is virtually immune to bank-influenced price swings.
In the Western Sahara area, the Moroccan dirham is the de facto medium of exchange. The MAD remains unregulated, but its export is prohibited by law.
The dirham was implemented on October 17, 1959, under the administration of Abdallah Ibrahim, after the founding of Bank Al-Maghrib and the elimination of the Moroccan franc, which had been in use since 1921. Since its inception, the MAD has been one of Africa’s highest currencies.
3). Ghanaian Cedi
The Ghana Cedi (GHS) is the fourth historical legal currency of the Republic of Ghana, the highest currency in West Africa, and the third highest currency in Africa. The GHS was renewed in 2007 from the GHC following years of inflation-induced depreciation.
According to a Bloomberg research, the GHS was the best-performing currency in the world versus the dollar in 2020. The US agency found that the Ghanaian currency increased by 3.9%, the greatest rise among the more than 140 currencies monitored, making it one of the highest in Africa.
Government expenditure initiatives and employment development have helped maintain the currency’s strength, and the GHS is more valuable as a result of Ghana having the highest GDP per capita in West Africa.
The Akan term ‘cedi’ refers to cowrie shells, which were historically used as money in what is now Ghana. Cowry is not indigenous to West African waters; it originates in the Indian Ocean and was brought to Africa by Arab traders in the 14th century.
2). Libyan Dinar
At 4.88 LYD to the dollar, the Libyan dinar is the second-highest currency in Africa. The LYD replaced the Libyan pound in 1971, when Muammar Gaddafi deposed King Idris in a coup, and was minted at the same value as the Libyan pound.
The Central Bank of Libya is responsible for the manufacture, issue, and control of the currency, which consists of 1,000 dirhams per dinar.
Although it remains one of the highest currencies in Africa, the LYD has progressively depreciated against major currencies like the U.S. dollar, the British pound, and the euro over the years.
The continued slump in value may be traced to various sources, with the decline in oil prices on international markets being the most significant. Since oil sales are Libya’s primary source of foreign currency, the decline in oil prices has had a detrimental effect on the dinar.
1). Tunisian Dinar
The Tunisian Dinar (TND), which was launched in 1958, is the highest currency in Africa, with a dollar conversion rate of 3.13 Dinars. The currency was introduced two years after Tunisia’s independence from France, while the Tunisian franc was in force.
After the depreciation of the franc, the TND was pegged to the USD at a rate of 0.42 dinars to 1 dollar, which remained in place until 1971.
Its historically low rate of inflation has contributed to the TND’s rise to the top of the African currency rankings. From 2000 to 2010, it saw less volatility than Egypt and Morocco, two neighbouring oil-based economies.
The government has made it unlawful to import, export, or convert dinars to another currency. This limitation allows the TND to be included in this list of the highest currencies in Africa.