Mixed outlook for African currencies in 2025

The forecast for major African currencies heading into 2025 presents a mixed picture, with South Africa’s rand anticipated to perform well, while Nigeria’s naira may experience further depreciation before stabilizing, according to Ebury Partners.

Among the seven African currencies tracked by the London-based firm, four are expected to maintain or increase their value, while the remaining three are likely to continue declining. These projections are based on the economic fundamentals of each country and expected fluctuations in commodity prices, as noted by Ebury’s head of market strategy, Matthew Ryan.

The Angolan kwanza is expected to weaken by approximately 8 percent, reaching 1,000 per dollar, while the Ghanaian cedi is projected to drop around 16 percent to 19 per dollar.

The Nigerian naira is forecasted to depreciate by 2.4 percent, hitting 1,700 per dollar, whereas the South African rand is predicted to appreciate by 5 percent, reaching 16.75 per dollar. In contrast, the Kenyan shilling and Zambian kwacha are expected to remain stable.

The diverse economic conditions across Africa contribute to a varied outlook for the region’s currencies, with macroeconomic fundamentals and commodity prices playing crucial roles in determining currency strength. While the rand is expected to continue its upward trend this year, currencies such as the naira, cedi, and kwanza may face additional losses due to weaker economic fundamentals. Conversely, the Kenyan shilling and Zambian kwacha are viewed as well-positioned to remain stable amid global economic challenges.