Three African nations are also facing are also having comparable problems, adding to the historic foreign exchange crisis that Nigeria is currently facing.
Certain African currencies have become weaker due to political and economic reasons comprising government instability, inflation, decreased foreign direct investment, and shifting capital flows.
Since the Central Bank of Nigeria (CBN) floated the naira in June 2023, all forex market sectors collapsed into the Investor’s and Exporters’ Window, and the naira has been steadily declining.
NIgerian households and businesses are impacted by the depreciation, which raises expenses for those whose operations depend on imported items and increases debt repayment requirements for foreign debt companies.
The declining currency of Kenya, the second-largest economy in Eastern Africa, is a result of both internal and external shocks that have occured since 2020.
Keyan shilling saw its biggest decline in the previous 30 years in 2023 and peaked in January 2024 at 163 per dollar.
Depreciation raises the costs of imports and adds to Kenya’s debt, which as of the June was over 10,100 billion shilling (€64.4 billion).
Following Russia’s invasion of Ukraine in February 2022, Egypt economy was severly damaged, which put strain on its foreign exchange reserves and caused wheat prices to skyrocket.
There are currently restrictions on the amount of money that can be taken out of ATM and banks, and record high have been seen in the prices of gold, iron, electrical appliances, and other commodities due to dollar volatility.
African nations economy are at a very big risk if not checked.
