A weak currency is rarely merely a financial annoyance in the economic reality of Africa. It frequently exacerbates suffering by increasing inflation, deepening poverty, discouraging investment, and impairing a state’s ability to withstand shocks.
- A weak currency significantly impacts inflation, poverty, investment, and economic stability in Africa.
- In 2025, several African currencies, including the South Sudanese pound and Ethiopian birr, experienced notable declines.
- South Sudan’s reliance on oil exports intensified its economic vulnerability, resulting in substantial inflation and currency depreciation.
- Ethiopia faced major economic challenges, including debt restructuring and dollar shortages, severely affecting the birr’s value.
This fact was brought to light in 2025 when several African currencies experienced significant declines, with repercussions that extended far beyond the foreign exchange markets.
SEE ALSO: 10 African countries with the weakest currencies compared to the US dollar
The World Bank claims that the South Sudanese pound and the Ethiopian birr were the worst-performing currencies in 2025, with depreciations of more than 10% thus far.
These decreases were not unique technological occurrences; rather, they were a reflection of more serious structural flaws that still exist in some regions of the continent.
The example of South Sudan in 2025 demonstrates how an excessive reliance on a single export good is frequently the cause of currency depreciation.
Over 90% of South Sudan’s foreign cash earnings come from oil exports. Because of this over-reliance, the economy is quite vulnerable to outside shocks.
South Sudan’s main export route, the oil pipeline to Port Sudan, was seriously damaged by the fighting in neighboring Sudan.
The South Sudanese pound sharply declined as foreign currency inflows stopped due to the fall in oil profits.
Although the declining currency was a symptom of lost export revenue rather than the root of the crisis, it exacerbated the ensuing economic suffering.
As a result, the country’s inflation, which stood at 2.4% in 2023, surged to a triple-digit rate of 107.9% by September 2025, as seen on FinanceinAfrica.
Additionally, Ethiopia’s birr became the world’s third-weakest currency this year, after only the Argentine peso and the Turkish lira, as the government battled to stabilise its economy amidst a complicated debt restructuring.
In 2025, the currency fell by more than 15% versus the US dollar, reflecting rising pressure from dollar shortages, inflationary pressures, and investor fear.
Investor confidence is also undermined by currency volatility. In situations when exchange rate losses could instantly erase returns, foreign investors are hesitant to commit capital.
In contrast, local companies find it difficult to plan or grow when import prices and operating costs are subject to significant fluctuations.
With that said, here are the African countries with the weakest currencies at the end of the year, as per Forbes Calculator.
