A new report from the African Development Bank (AfDB) warns that 21 out of 54 African currencies are projected to depreciate against the U.S. dollar in 2025,highlighting continued economic vulnerability across the continent.
Major economies like Nigeria,Egypt,Ethiopia,and Ghana are expected to see currency losses of 6% or more,driven by declining export earnings,global financial volatility,and internal economic pressures. According to the AfDB’s African Economic Outlook 2025,geopolitical tensions — exacerbated by sweeping U.S. trade tariffs — have tightened global financial markets and increased borrowing costs,reducing access to dollar-denominated capital for many African nations. The Nigerian naira,still recovering from steep devaluation in 2023,remains under pressure despite recent market reforms. Central Bank Governor Yemi Cardoso cited reduced volatility and improved investor confidence,but the naira is still forecast to decline further.
Conversely,some currencies are expected to strengthen. “Countries like Kenya,Morocco,and those in the CFA franc zone could post appreciation of more than 3%,” AfDB said. The Kenyan shilling and South African rand have both rebounded,supported by increased investor inflows and political stability. Kenya,in particular,saw a surge in portfolio investment after a successful Eurobond buyback. Meanwhile,gold has become a strategic fallback for countries like Zimbabwe and South Sudan,seeking to hedge against currency instability. The AfDB urges African governments to enhance macroeconomic fundamentals,diversify exports,and reform exchange rate regimes to curb persistent depreciation trends.
United News - unews.co.za