African Currencies Plunge to Decade Lows as Economic Woes Mount
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The Nigerian naira and Kenyan shilling were the worst performing currencies in 2023, dropping 55% and hitting 30-year lows respectively against the US dollar.
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Currency devaluation in Nigeria and Kenya was driven by factors like removal of fuel subsidies, tax increases, high inflation, loss of investor confidence and unstable economic policies.
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Weak currencies have wider socio-economic consequences for African countries including high prices for imported essential goods.
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Most African currencies struggled in 2023 as seen in 7 out of the 10 worst performing currencies globally being African.
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Common challenges faced by African economies include inflation, policy instability, low foreign investments and volatile capital flows.