A recent report by the African Export-Import Bank (Afreximbank) has revealed substantial currency depreciation across Africa, with nearly half of the continent’s currencies weakening in May 2025.
Despite ongoing economic reforms and moderate growth, many African nations continue to face intense foreign exchange (FX) pressures.
Afreximbank’s Monthly Developments in the African Macroeconomic Environment report highlighted divergent trends in exchange rate performance across the region.
Notably, Nigeria’s naira recorded a 2.1% month-on-month (MoM) gain against the U.S. dollar but remained 11.5% weaker year-on-year (YoY). Meanwhile, Ghana’s cedi suffered a steep 21.5% MoM decline and a 10.6% drop YoY, trading at 10.3 per dollar in May, compared to 13.9 a year earlier.
Other currencies, including those of South Africa, Namibia, and Eswatini, posted marginal gains or held steady. However, at least ten African nations experienced sharp declines in exchange rates, underlining the continent’s susceptibility to both internal fiscal imbalances and external shocks.
The report also noted a downturn in total trade, with African exports and imports dropping from $125.9 billion in January to $120.8 billion in February. Intra-African trade similarly slipped to $18 billion from $18.6 billion.
Nonetheless, year-on-year trade figures showed improvement, thanks to the continued rollout of the African Continental Free Trade Area (AfCFTA) and growing regional integration.
On the fiscal front, credit ratings have improved for several countries, with Nigeria and Ghana securing upgrades due to reform efforts.
Nigeria’s Eurobond yields fell by 250 basis points following favorable assessments from Fitch and Moody’s. Ghana’s selective default in 2024 has since been resolved with a successful debt restructuring, earning a CCC+ rating from S&P. Benin also received an upgrade to BB-, while South Africa’s BB- rating was maintained amid warnings over its fiscal challenges.
Afreximbank noted that declining global interest rates have allowed several African economies—including Nigeria, Angola, Egypt, Côte d’Ivoire, Senegal, and Morocco—to re-enter the Eurobond market, a move the bank interprets as a sign of renewed investor confidence.
Despite these gains, the bank cautioned that African economies remain vulnerable to external risks such as geopolitical instability, global economic tightening, and stagnating trade.
The report concluded by urging governments across the continent to reinforce domestic policy buffers and accelerate structural reforms to build long-term economic resilience.
Image Credit: African Export-Import Bank
