Reports has it that African currencies are prone to mixed prospects come 2025. The viewpoint for major African currencies has South Africa’s rand expected to outperform, while Nigeria’s naira may face more depreciation before stabilizing, according to Ebury Partners.
Ebury, a London based firm monitored seven (7) African currencies, four are expected to either hold their value or gain, while the other three are projected to continue losing ground. The projections are based on each country’s economic fundamentals and anticipated movements in commodity prices, according to Ebury’s head of market strategy, Matthew Ryan.
Nigerian naira is projected to depreciate by 2.4%, hitting 1,700 per dollar. Angolan kwanza is projected to weaken by about 8%, reaching 1,000 per dollar, while the Ghanaian cedi is expected to fall by around 16% to 19 per dollar. Whereas South African rand is predicted to gain 5%, reaching 16.75 per dollar. Meanwhile, the Kenyan shilling and Zambian kwacha are expected to remain stable.
The wide-ranging idiosyncrasies in Africa ensure a diverse outlook for the region’s currencies with macroeconomic fundamentals and commodity prices as key determinants of currency strength.
While the rand is predicted to continue this year’s rally, currencies like Nigeria’s naira, cedi, and kwanza may experience further losses due to weaker economic fundamentals.
However, currencies like the Kenyan shilling and Zambian kwacha are seen as well-positioned to hold steady amid global economic challenges.
Be that as it may, the Nigerian naira is prone to continue weak trend into 2025, but reforms may start to yield, and the naira is poised to a leadership height amongst global currencies.
