The African Development Bank (AfDB) predicts the Nigerian naira and Ghanaian cedi will weaken in 2025, driven by declining export earnings and ongoing global uncertainty.
According to the bank, 21 of Africa’s 54 countries will likely experience currency depreciation.
Notably, Egypt, Ethiopia, Ghana, Nigeria, and Zimbabwe could see drops of 6% or more.
As export revenues fall, these economies face mounting pressure on their currencies.
East Africa Shows Resilience
Conversely, some countries show resilience.
Kenya’s shilling gained 3.1% in 2024 after losing 15.4% the previous year.
This rebound followed stronger investor confidence and a successful $1.5 billion Eurobond issuance, which helped the government refinance maturing debt and attract more portfolio inflows.
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Similarly, Morocco and several CFA franc zone countries could see their currencies appreciate by over 3% against the US dollar.
South Africa’s rand also recovered, rising 0.7% in 2024 after an 11.3% drop the year before.
The year is almost half gone, and it is not clear if there will be further fall of the Nigerian currency and the others that are already experiencing high inflation rates.
Naira Stabilises After Reforms
In Nigeria, the naira began to stabilise after President Bola Tinubu removed long-standing currency controls in 2023.
As a result, the Central Bank introduced reforms that improved transparency and calmed markets.
Governor Yemi Cardoso reported that FX market volatility fell from 4% to under 0.5%, while reserves climbed due to returning investor confidence.
Structural Reforms Urgently Needed
However, the AfDB warns that external shocks alone don’t explain the pressure.
Domestic issues—like fiscal deficits, rigid FX regimes, and low productivity—continue to undermine stability.
Therefore, African governments must act decisively to fix these structural problems and build economic resilience.
