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Business Insider
2 days ago
- Business
- Business Insider
Top 10 African countries with the weakest currencies in May 2025
A weak currency has far-reaching consequences for a country's economic stability, investor confidence, and citizen well-being, beyond just exchange rates. Zimbabwe's introduction of the gold-backed ZiG currency in April 2024 aimed to stabilize its economy. However, by February 2025, the ZiG had lost 95% of its value on the unregulated market, despite significant central bank interventions. This underscores the complexities of implementing alternative currency models without robust economic fundamentals. As of April 2025, Imara Asset Management, Zimbabwe's oldest independent brokerage, noted that the ZiG is on the verge of failure due to rising irrelevance rather than fast devaluation. In 15 years, Zimbabwe has made six attempts to create a stable indigenous currency, the ZiG being the sixth. It was introduced a year ago and is supported by the central bank's $100 million foreign exchange reserves and 2.5 tons of gold. DON'T MISS THIS: Top 10 African countries with the strongest currencies in April 2025 In the nation, about 80% of transactions are still handled in US dollars, however, some are still made in South African rand. Emmerson Mnangagwa, the president of Zimbabwe, announced last year that the current multicurrency system would be phased out by 2030 and that the ZiG would be the only legal money. Many African countries rely heavily on imports for basic commodities such as petroleum, machinery, medications, and even food. A weak currency increases the cost of imports, exacerbating inflation and diminishing citizens' purchasing power. For example, Nigeria's continuous inflation struggles, with inflation reaching 23.71% in April 2025, show how a weak currency (the naira) raises importation costs and, by extension, the cost of living. With that said, here are the 10 African countries with the weakest currencies, presently, according to the Forbes currency converter, last updated on the 29th of May, 2025. For this month, the currencies of Guinea, Burundi, and the DRC, compared to last month, experienced a dip in value. While currencies for Uganda, Malawi, Tanzania, Nigeria, and Rwanda all marginally increased in value. Top 10 African countries with the weakest currencies in May 2025 Rank Country Currency value per US$ Currency 1. São Tomé & Príncipe 22,281.8 São Tomé & Príncipe Dobra 2. Sierra Leone 20,969.5 Leone 3. Guinea 8,667.8 Guinean Franc 4. Uganda 3,636.8 Ugandan Shilling 5. Burundi 2,977.7 Burundian Franc 6. DRC 2,905.7 Congolese Franc 7. Tanzania 2,682.5 Tanzanian Shilling 8. Malawi 1,734.7 Kwacha 9. Nigeria 1,590.2 Naira 10. Rwanda 1,414.3 Rwandan Franc
The South African
28-04-2025
- Business
- The South African
Zimbabwe's ZiG battles inflation pressures a year after launch
A year after Zimbabwe launched the Zimbabwe Gold (ZiG) currency to restore confidence and curb market distortions, signs of cautious progress are beginning to emerge. The latest figures from the Zimbabwe National Statistics Agency (ZimStat) show that the annual inflation rate increased to 85.70 percent. The recent release is the first time Zimstat has given a year-on-year local currency inflation rate since authorities launched the ZiG currency. The authorities launched the ZiG currency when the year-on-year inflation rate was 57.50 percent in April 2024. The ZiG is Zimbabwe's sixth attempt at a stable currency in less than 20 years. According to the Reserve Bank of Zimbabwe (RBZ), 'ZiG is a digital currency backed by physical gold reserves, designed to provide an alternative store of value for citizens.' The authorities expected this currency to stabilise the economy by offering a more reliable currency option, supported by the physical backing of gold. The latest figures show that monthly inflation edged up by 0,6 percent in April 2025, after a brief dip into deflation in March. However, the annual inflation rate highlights ongoing economic challenges. According to Bloomberg , since the ZiG's introduction, the authorities have struggled to convince Zimbabweans that the ZiG will succeed, and its value has slumped. The ZiG is not catching on in the informal sector, which is the engine room of Zimbabwe's economy, making up around 80% of it. Most of these small traders and businesses just prefer to stick with US dollars and South African Rands. They see those currencies as more reliable than the ZiG right now. Financial expert Jacob Chincinza believes that where people accept ZiG, it is often due to legal mandates rather than market preference. 'Government regulations have compelled certain formal-sector entities to recognize ZIG for transactions, but this has not translated into voluntary adoption. Businesses frequently impose higher prices for those using ZiG to manage exchange rate risks, further discouraging its use,' he noted. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X, and Bluesky for the latest news.
Business Insider
28-04-2025
- Business
- Business Insider
Zimbabwe resumes gold coin minting amid soaring bullion prices
Zimbabwe's central bank has resumed issuing gold coins, a move it had suspended 10 months ago. Zimbabwe's central bank has resumed issuing gold coins after a 10-month suspension. The move is aimed at boosting the bullion reserves backing the local currency, ZiG. Gold coins are available through the country's banks and are seen as a valuable asset amidst trade war uncertainties. Zimbabwe's central bank has resumed issuing gold coins, a move it had suspended 10 months ago. This decision aims to boost the bullion reserves backing the local currency, the ZiG, which is teetering on the brink amid policy missteps, according to Imara Asset Management, the country's oldest independent brokerage. The 22-carat coins halted in July, are once again available through the country's banks, at a time when the appeal of bullion is high, according to Persistence Gwanyanya, a member of the central bank's monetary policy committee. ' Gold is more attractive to the market at the moment and it supports our value preservation efforts, ' Gwanyanya said Sunday in a phone interview. 'We are taking advantage of firm gold prices and re-injecting the gold coins into the market.' Two banks have confirmed the sale of newly minted gold coins: the Central Africa Building Society (CABS), a subsidiary of Old Mutual Zimbabwe, and a local branch of South African lender Nedbank Group Ltd, Bloomberg reported. These coins, first issued in 2022, were introduced as a store of value for pension funds and individuals looking for a haven from recurring inflation and currency volatility. Nedbank described the coins as an 'alternative investment option' that can be used to enhance investment portfolios with a 'valuable asset.' The coins are available in denominations ranging from one-tenth of an ounce to one ounce of gold. A surge in global gold prices, which have increased by around 25% this year due to trade war uncertainties sparked by the U.S., is expected to benefit Zimbabwe, a key producer of the precious metal.
Bloomberg
27-04-2025
- Business
- Bloomberg
Zimbabwe Restarts Minting of Gold Coins as Bullion Prices Soar to Record
Zimbabwe's central bank is again issuing gold coins it scrapped 10 months ago, a step it took to ramp up the bullion stockpile used to back up the local currency, the ZiG. Minting of the so-called 'Mosi-Oa-Tunya' 22-carat coins, named after the iconic Victoria Falls, was scrapped in July, central bank Governor John Mushayavanhu told Bloomberg in an interview at the time.
Reuters
25-04-2025
- Business
- Reuters
Zimbabwe inflation at 85.7% y/y in April in local currency terms
April 25 (Reuters) - Zimbabwe's consumer inflation was at 85.7% year on year in April in local currency terms, statistics agency data showed on Friday, one year after the Zimbabwe Gold (ZiG) currency was introduced.
