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Egypt\u2019s pound has recorded the steepest depreciation against the US dollar among Africa\u2019s major economies over the past decade, underscoring how repeated currency devaluations and sweeping economic reforms have reshaped the financial landscape in the continent\u2019s second biggest economy.\n<\/p>\n
An analysis using exchange rate data from African Markets shows that the Egyptian pound lost 82.7 percent of its value against the dollar between August 2016 and July 2026, the largest decline among the five largest economies in Africa tracked. Nigeria\u2019s naira ranked second with a 77.7 percent depreciation, followed by Ghana\u2019s cedi (66.9 percent), Kenya\u2019s shilling (21.7 percent), and South Africa\u2019s rand (11.2 percent).\n<\/p>\n
The findings highlight how a decade defined by the International Monetary Fund-backed reforms, foreign exchange shortages, commodity price shocks and changing exchange-rate regimes produced sharply different currency outcomes across the continent\u2019s biggest economies.\n<\/p>\n
Methodology: Measuring currency depreciation\n<\/p>\n
The analysis measures the decline in a currency\u2019s value rather than the increase in its exchange rate.<\/p>\n
BusinessDay calculated depreciation using the formula: Currency depreciation (percent) = (new exchange rate \u2212 old exchange rate) \u00f7 new exchange rate \u00d7 100\n<\/p>\n
Unlike measuring the percentage increase in an exchange rate\u2014which can exceed 100 percent\u2014this approach captures the actual loss in a currency\u2019s value against the US dollar, making comparisons across countries more meaningful.\n<\/p>\n
Egypt\u2019s devaluations paved the way for recovery\n<\/p>\n
Egypt\u2019s currency recorded the largest decline in the analysis because authorities repeatedly chose large exchange-rate adjustments to correct deep macroeconomic imbalances.\n<\/p>\n
The biggest turning point came in November 2016 when Cairo floated the pound under a $12 billion IMF programme, ending years of an overvalued exchange rate and chronic dollar shortages. Subsequent devaluations between 2022 and 2024, driven by external shocks, rising import costs and renewed IMF reforms, pushed the currency to successive record lows before it stabilised under a more flexible exchange-rate regime.<\/p>\n
While the weaker pound surged inflation and import costs, it also laid the foundation for the Arab nation\u2019s recent economic recovery. Foreign exchange shortages eased, reserves improved, portfolio inflows returned, and the country attracted record Foreign Direct Investment of almost $50 billion in 2024, supported by the landmark Ras El Hekma investment agreement with the United Arab Emirates.\n<\/p>\n
The economic backdrop has improved markedly. Data from Egypt\u2019s Central Agency for Public Mobilization and Statistics (CAPMAS) show inflation slowed to 12 percent in December 2025 from 24 percent in January, easing pressure on households.\n<\/p>\n
At the same time, the economy grew by 5.3 percent year-on-year in the second quarter (October\u2013December) of the 2025\/26 fiscal year, matching the previous quarter\u2019s pace and recording its strongest quarterly expansion since the third quarter of the 2021\/22 fiscal year, according to the Ministry of Planning and Economic Development.\n<\/p>\n
The country has retained its position as Africa\u2019s largest destination for FDI, while the central bank expects economic growth to exceed five percent over the next two fiscal years.\n<\/p>\n
The Egyptian experience illustrates a difficult trade-off confronting many African economies: large devaluations inflict short-term pain but can restore competitiveness and investor confidence when accompanied by credible reforms.<\/p>\n
Nigeria\u2019s reforms triggered a sharp correction\n<\/p>\n
Nigeria ranked second after the naira depreciated 77.7 percent during the period. <\/p>\n
Unlike Egypt, where depreciation occurred through multiple IMF-supported adjustments, Nigeria\u2019s biggest correction followed sweeping foreign exchange reforms introduced in 2023. The collapse of multiple exchange-rate windows, efforts by the Central Bank of Nigeria to improve price discovery and the clearance of foreign exchange backlogs resulted in one of Africa\u2019s largest currency adjustments. A further devaluation in January 2024 accelerated the decline.\n<\/p>\n
Although the weaker naira fuelled inflation, raised import costs and squeezed household purchasing power, it also improved liquidity in the foreign exchange market, helped lift Nigeria\u2019s external reserves to nearly $52 billion\u2014the highest level in almost a decade\u2014and supported the country\u2019s return to Africa\u2019s top five destinations for FDI in 2025.\n<\/p>\n
More recently, the currency has stabilised since the second half of last year following sustained reforms, highlighting how markets often reward policy consistency after prolonged adjustment.<\/p>\n
Ghana\u2019s turnaround masks deep decade-long losses\n<\/p>\n
Ghana presents one of the most striking contrasts in the analysis.\n<\/p>\n
Although the cedi lost 66.9 percent of its value over the decade, it also emerged as Africa\u2019s best-performing currency in 2025 after IMF-backed reforms restored investor confidence, strengthened reserves and boosted gold export earnings.\n<\/p>\n
But recently, the cedi has since reversed much of those gains this year as seasonal dollar demand and external pressures resurfaced. Nevertheless, the currency\u2019s decade-long performance continues to reflect the severe losses suffered during the country\u2019s debt crisis, demonstrating that a strong short-term recovery does not erase years of depreciation.\n<\/p>\n
Kenya and South Africa prove resilience matters<\/p>\n
Kenya\u2019s shilling and South Africa\u2019s rand recorded the smallest declines among the currencies analysed, illustrating the benefits of relatively flexible exchange-rate regimes.\n<\/p>\n
Kenya\u2019s shilling depreciated by 21.7 percent despite periods of pressure from rising external debt repayments, a stronger dollar and tighter global financial conditions. Strong diaspora remittances, tourism receipts and prudent monetary management helped prevent the sharp devaluations experienced elsewhere, allowing the currency to recover after its 2023 sell-off.\n<\/p>\n
South Africa\u2019s rand posted the smallest depreciation at 11.2 percent. Although it remains one of the continent\u2019s most actively traded and volatile currencies, the rand has largely adjusted through market forces rather than abrupt policy-driven devaluations. Commodity prices, global investor sentiment and domestic political developments have continued to influence the currency, but cumulative losses remained modest compared with its continental peers.\n<\/p>\n
Different policy choices, different currency outcomes\n<\/p>\n
The decade-long comparison shows that the scale of currency depreciation depended less on geography than on policy choices.<\/p>\n
Countries that postponed exchange-rate adjustments or maintained overvalued currencies, such as Egypt and Nigeria, eventually experienced sharper corrections when reforms became unavoidable. Economies operating under more flexible exchange-rate regimes, including Kenya and South Africa, recorded far more moderate long-term losses.\n<\/p>\n
Ghana\u2019s experience offers another lesson: a currency can be Africa\u2019s strongest performer in one year and still rank among the continent\u2019s weakest over a decade if earlier crises inflicted deep losses.\n<\/p>\n
For investors, policymakers and businesses, the findings reinforce that currency stability remains one of the clearest indicators of macroeconomic resilience. As African economies continue to navigate volatile capital flows, geopolitical tensions and shifting commodity markets, the credibility of exchange-rate policy will remain central to attracting investment, containing inflation and sustaining long-term growth.<\/p>\n
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