The continent was severely affected by the Covid-19 pandemic, and just when things started picking up, the invasion of Ukraine by Russia in February this year made matters even worse.
Debt obligations had been on the rise and commodity prices falling, eroding foreign-exchange earning power in some countries. Another issue that many critics and economic analysts have identified as a significant concern is the dependence on many African currencies against the US dollar.
Analysts say the valuation is one that has put Africa on the back foot and continues to weaken the currencies of individual countries on the continent. There are some who are of the opinion that the solution to Africa's economic issues as it concerns currency is the adoption of a single currency.
Within the past decade, only two tales make the headlines when it comes to financing, economy, and currency as it concerns the African continent – it is the best-performing as well as the worst-performing currency against the US dollar.
Now, let us take a closer look at the best-performing African currency as well as the worst-performing currency so far.
- Best Performing African Currency in 2022
In what has come as a surprise to many across the globe, including financial analysts, the best-performing currency so far in 2022 is the Zambian Kwacha.
Over the course of this year, the Zambian Kwacha has risen to become the best-performing currency in the world against the dollar.
It has gained 15% so far in 2022 and was quoted at 15.93 to the dollar in Tuesday trading.
Experts have pegged these gains on President Hakainde Hichilema's efforts to turn around the economy, mainly by reorganizing its foreign debt to make it sustainable.
In September, the southern African country agreed to a crucial deal with the International Monetary Fund for a bail-out loan amounting to $1.3bn (£1.15bn).
The amount will give a lifeline to key social and economic programs such as funding schools and hospitals as the government embarks on renegotiating expensive debt with China and other creditors. The move has restored foreign investors' faith in the copper producer.
This has also seen inflation cool off consistently at a time when even the most developed economies are grappling with rapidly rising prices.
Zambia's inflation has fallen from a high of 21% in October last year to 9.9% last month.
- Worst Performing African Currency in 2022
Another big surprise of 2022 was the news that the Ghanaian Cedi was named the worst-performing African currency so far in 2022. In 2015, the Cedi was the number one currency in Africa.
Also, early in the year, financial analysts were optimistic about Ghana's fortunes. But the country's economy took a downward turn, forcing President Akufo-Addo to solicit assistance from the International Monetary fund (IMF).
Last week, the Cedi was named the world's worst-performing currency, according to the Bloomberg currency tracker that watches 148 currencies.
In midday trading on Tuesday, the Cedi was quoted at 11.64 to the US dollar. This indicates a 48% loss in value in the last 12 months.
The Cedi's position has been worsened by foreign investors losing confidence in the country and opting to dump Ghanaian dollar-denominated bonds from their portfolios.
According to the country's Central Securities Depository, the amount of domestic government and corporate bonds in the hands of foreign investors fell to 12.3% in August.
This has seen Ghana fail to access cheap money from the international debt markets, and a Zambia-like deal with the IMF for $3bn in emergency funding is still in the works.
As a result, the cost of living in Ghana has been accelerating for the last 16 months, with inflation hitting 37.2% in September.
On Monday, traders in Accra threatened to close down businesses for a second time in two months, decrying the high cost of doing business.
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