- Exchange rate basically means the value of a currency when converted to another during trade.
- Our analysts painstakingly compared the currencies used in all fifty four African countries and arrived at the top ten most valuable ones among them.
- Countries in Northern Africa dominate this list… for now.
Last month, we wrote about the ten African currencies with the weakest exchange rates against the dollar. And based on our readers’ response to the article, we figured it’d be best to write a follow-up. So, here we are with another piece on the top ten African countries with the strongest currencies in 2021.
Our analysts painstakingly compared the currencies used across all fifty-four countries in Africa. This was done by converting the sum of 1000 in each of these currencies to the dollar. Now, before we go ahead and reveal the top ten strongest currencies in Africa at the moment, let’s first have a little discussion about currency valuation and exchange rates, shall we?
What you should know about exchange rates
The first thing you should know about currencies is that their values are hardly constant. This is partly due to the unexpected movements in exchange rates which can either be favourable or not.
According to Investopedia, “exchange rates have a substantial influence on companies’ operations and profitability. Exchange rate volatility affects not just multinationals and large corporations, but it also affects small and medium-sized enterprises, including those who only operate in their home country. While understanding and managing exchange rate risk is a subject of obvious importance to business owners, investors should also be familiar with it because of the huge impact it can have on their holdings.”
As you may well know, the exchange rate basically means the value of a currency when converted to another during trade. The dollar, for example, is currently the most universally accepted benchmark currency because of its wide usage during international trade. Therefore, the top ten strongest currencies in Africa are basically currencies with the highest values when converted to the dollar, or any other universally accepted currency for that matter.
Top ten African currencies with the highest exchange rates against the dollar
- Tunisian dinar: This is currently the strongest and most valuable currency in Africa. As at the time of publication, checks by BI Africa shows that TND1000 converts to $353.05.
- Libyan dinar: Libya currently has the second strongest and most valuable currency on the continent, second only to Tunisia. When converted to the dollar, LYD1000 will give you $219.20.
- Ghanaian cedi: This West African country’s currency has the third highest exchange rate against the dollar in Africa. When we converted GHS1000, we got $164.74. That said, it’s important to note that Ghana had, in 2007, re-denominated its currency such that ten thousand Cedis became equivalent to one Ghana Cedi. The country’s Central Bank explained that the re-denomination became necessary for the sake of statistical convenience.
- Moroccan dirham: Morocco has the fourth strongest currency in Africa, for now. Checks by BI Africa showed that when converted to the dollar, DH1000 becomes $110.46.
- Botswanan pula: Botswana in Southern Africa has the fifth strongest currency on the continent. BWP1000 converts to $88.22. However, this may have changed slightly by the time you convert yours due to exchange rate volatility.
- Seychellois rupee: This tiny island country which is located in the Somali Sea, has one of the strongest currencies in Africa. SCR1000 converted to $78.35 as at the time of filing this report.
- Namibian dollar: When we converted NAD1000 to the dollar, we got $67.16.
- Eritrean nakfa: In Eritrea which is located in the Horn of Africa, they use a currency called the Eritrean nakfa. The currency has the eighth strongest exchange rate against the dollar. As at the time of comparison, ERN1000 converted to $66.66.
- South African rand: South Africa is one of the continent’s strongest economies. It also has one of the strongest currencies. When we converted ZAR1000 to the dollar, we got $66.63.
- Swazi lilangeni: Although it is among the poorest countries on the continent, Eswatini (Swaziland) has one of the strongest currency. When converted to the dollar, SZL1000 gave us $66.62.
Editor’s Note: The article has been updated to reflect the fact that Ghana had recently re-denominated its currency.
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