What is currency?
A currency is a medium of exchange for goods and services.
The term derives from Medieval Latin currentia, with the literal meaning ‘a flowing,’ and subsequently from the Latin word currere, which means ‘to run’ or ‘flow.’
There are two types of currencies: fiat (from Latin: ‘Let it be done’) currency and commodity currency.
- Fiat currency, also called fiat money, is money in the form of paper notes and coins, issued and backed by a country’s government, and declared legal tender. Fiat currency is generally accepted at its face value as a method of payment.
Fiat currency has no intrinsic value, implying it has no value in itself. The value of fiat money is primarily based on the public’s faith and trust in the issuer of the currency, which is normally the government of a country.
The central bank of a country, such as the South African Reserve Bank (SARB), is typically mandated by a government to protect the value of the currency of the particular country.
Other factors that may affect the value of fiat money is, amongst others:
The relationship between supply and demand of fiat currencies of different countries.
The stability and trustworthiness of the issuer.
The state of a country’s economy.
- The value of commodity currency also referred to as commodity money, commodity-backed money, or representative money, is based on a valuable commodity, such as gold or silver.
Express differently, commodity money is a medium of exchange that represents something with intrinsic value. It has no value of its own, but it represents a claim on something of value, such as a commodity like gold, which can be redeemed.
Currencies of countries have different values due to factors such as:
- Supply and demand – high demand for a country’s currency increases the value of the currency. Conversely, when a country’s currency is in low demand, the value of the currency declines.
- Inflation rates and interest rates in different countries tend to be different.
- The effect of purchasing power parity (PPP) which is defined by the International Monetary Fund as: ‘The rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.’
What is an exchange rate?
An exchange rate is a rate at which the currency of one country is exchanged for the currency of another country. It is an indication of how many units of one country’s currency can be bought with one unit of another country’s currency.
For example, as of 29 January 2025, one ZAR (South African Rand) was equal to 0.75 BWP (Botswana pula), meaning you could buy 0.75 BWP, or 75 thebe, with one ZAR. Conversely, one BWP was equal to 1.33 ZAR, implying you could purchase 1.33 ZAR, or 133 cents, with one BWP.
There are two types of exchange rates: fixed exchange rate and floating exchange rate.
- A fixed exchange rate also called a pegged exchange rate or linked exchange rate, is an exchange rate that is linked to a popular currency, such as the U.S. dollar or euro, a basket of currencies, or a commodity, such as gold.
When a country’s currency is pegged to that of another country, the exchange rate between the two countries remains unchanged.
A currency with a fixed exchange rate is called a fixed currency.
- A floating exchange rate, also known as a fluctuating or flexible exchange rate, is a type of exchange rate system in which the value of a country’s currency is determined by supply and demand in the foreign exchange (forex) market.
- A currency with a floating exchange rate is referred to as a floating currency.
Countries in Africa
As of January 2025, there are 54 sovereign countries in Africa, according to statistics of the United Nations. Forty-eight countries are located on mainland Africa, plus six island nations regarded as part of the African continent. The six island nations are:
- Comoros, Madagascar, Mauritius, Seychelles – all located east of mainland Africa in the Indian Ocean, and
- Cabo Verde also called Cape Verde, and Sao Tome & Principe – situated west of the African continent in the Atlantic Ocean.
There are also two disputed areas that are not considered sovereign states, namely: Somaliland (autonomous region of Somalia) in eastern Africa and Western Sahara (occupied by Morocco) in northern Africa.
Furthermore, Tanzania in eastern Africa includes mainland Tanzania and the islands, Zanzibar and Pemba which are located in the Indian Ocean.
Africa is subdivided into five subregions which encompass the following countries – listed in alphabetical order:
- Northern Africa (6 countries): Algeria, Egypt, Libya, Morocco, Sudan, Tunisia
- Eastern Africa (18 countries): Burundi, Comoros, Djibouti, Ethiopia, Eritrea, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Rwanda, Seychelles, Somalia, South Sudan, Tanzania, Uganda, Zambia, Zimbabwe
- Southern Africa (5 countries): Botswana, Eswatini (formerly Swaziland), Lesotho, Namibia, South Africa
- Western Africa (16 countries): Benin, Burkina Faso, Cabo Verde (also known as Cape Verde), Côte d’Ivoire (also referred to as Ivory Coast), Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo
- Central Africa, also called Middle Africa, (9 countries): Angola, Cameroon, Central African Republic, Chad, DR Congo (also referred to as the Democratic Republic of the Congo), Equatorial Guinea, Gabon, the Republic of the Congo (simply known as the Congo), Sao Tome & Principe
Currencies of African countries
The table below shows the different currencies of the 48 countries on mainland Africa as well as the four island nations east of the mainland in the Indian Ocean and the two west of the continent in the Atlantic Ocean.
The countries are listed alphabetically, with the abbreviations of the regions in which they are located, indicated in brackets behind the country. The abbreviations are as follows: NA = Northern Africa, EA = Eastern Africa, SAR = Southern Africa Region, WA = Western Africa, and CA = Central Africa.
List of African currencies
Country | Name of currency and (currency sign) | Subdivided into | Currency code | Origin of currency name |
---|---|---|---|---|
Algeria (NA) | Algerian dinar (DA - Latin) | 100 centimes | DZD | The dinar derives its name from the Roman denarius |
Angola (CA) | Angolan kwanza (Kz) | 100 centimos | AOA | The kwanza derives its name from the Kwanza River |
Benin (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Botswana (SAR) | Botswanan pula (P) | 100 thebe | BWP | From the word that describes rain in Setswana |
Burundi (EA) | Burundian franc (Ffu) | 100 centimes | BIF | The Belgian Congo franc |
Burkina Faso (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Cameroon (WA) | CFA franc BEAC (FCFA) | 100 centimes | XAF | See note 2 |
Cabo Verde (WA) | Cabo Verdean escudo ($) | 100 centavos | CVE | The Portuguese escudo |
Central African Republic (CA) | CFA franc BEAC (FCFA) | 100 centimes | XAF | See note 2 |
Chad (CA) | CFA franc BEAC (FCFA) | 100 centimes | XAF | See note 2 |
Comoros (EA) | Comorian franc (CF) | 100 centimes | KMF | |
Côte d’Ivoire (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
DR Congo (CA) | Congolese franc (FC) | 100 centimes | CDF | The Belgian franc |
Djibouti (EA) | Djiboutian franc (Fdj) | 100 centimes | DJF | |
Egypt (NA) | Egyptian pound (E£) | 100 girsh | EGP | |
Equatorial Guinea (CA) | CFA franc BEAC (FCFA) | 100 centimes | XAF | See note 2 |
Eritrea (EA) | Eritrean nakfa (Nfk) | 100 cents | ERN | The nakfa derives its name from the town Nakfa, site of the first victory of the Eritrean Independence War |
Eswatini (SAR) | Swazi lilangeni (L for singular lilangeni) / (E for plural emalangeni) | 100 cents | SZL | The Siswati word lilangeni derives from emalangeni lineage of the Swazi royal family |
Ethiopia (EA) | Ethiopian birr (Br) | 100 santim | ETB | Birr means silver |
Gabon (CA) | CFA franc BEAC (FCFA) | 100 centimes | XAF | See note 2 |
Gambia (WA) | Gambian dalasi (D) | 100 bututs | GMD | Dalasi derives from dala, a nickname of the 5 French Western African franc note |
Ghana (WA) | Ghanaian cedi (GH₵) | 100 pesewas | GHS | The word cedi derives from the Akan language, meaning cowry shell |
Guinea (WA) | Guinean franc (FG, Fr, GFr) | 100 centimes | GNF | |
Guinea-Bissau (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Kenya (EA) | Kenyan shilling (KSh) | 100 cents | KES | |
Lesotho (SAR) | Loti (L for singular loti) / (M for plural maloti) | 100 lisente | LSL | The name loti is a word in Sesotho, meaning mountain |
Liberia (WA) | Liberian dollar (L$) | 100 cents | LRD | |
Libya (NA) | Libyan dinar (LD) | 1 000 dirhams | LYD | The dinar derives its name from the Roman denarius |
Madagascar (EA) | Malagasy ariary (Ar) | Iraimbilanja (See note 3) | MGA | The name ariary originates from the pre-colonial currency which was a silver dollar |
Malawi (EA) | Malawian kwacha (MK) | 100 tambala | MWK | The name kwacha originates from the Bemba and Nyanja language word for dawn |
Mali (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Mauritania (WA) | Mauritanian ouguiya (UM) | Khoums (See note 4) | MRU | The name ouguiya means ounce |
Mauritius (EA) | Mauritian rupee (Rs) | 100 cents | MUR | |
Morocco (NA) | Moroccan dirham (DH) | 100 santims | MAD | The word dirham derives from the Greek currency, the drachma |
Mozambique (EA) | Mozambican metical (MT) | 100 centavos | MZN | The word metical derives from an Arabic word denoting a unit of weight |
Namibia (SAR) | Namibian dollar (N$) | 100 cents | NAD | |
Niger (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Nigeria (WA) | Nigerian naira (₦) | 100 kobo | NGN | The name naira was coined from the name of the country |
Republic of the Congo (CA) | CFA franc BEAC (FCFA) | 100 centimes | XAF | See note 2 |
Rwanda (EA) | Rwandan franc (RF) | 100 centimes | RWF | |
Sao Tome & Principe (WA) | Sao Tome & Principe dobra (Db) | 100 cêntimo | STN | In Portuguese, dobra originally referred to a type of Spanish gold coin |
Senegal (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Seychelles (EA) | Seychellois rupee (SR, SRe) | 100 cents | SCR | |
Sierra Leone (WA) | Sierra Leonean leone (Le) | 100 cents | SLL | The name leone (lion) is part of the name of the country, meaning Mountains of lions |
Somalia (EA) | Somali shilling (Sh.So.) | 100 senti | SOS | |
South Africa (SAR) | South African rand (R) | 100 cents | ZAR | The rand derives its name from the Witwatersrand (white waters ridge), the ridge on which the city of Johannesburg is built |
South Sudan (EA) | South Sudanese pound (£) | 100 piastres | SSP | |
Sudan (NA) | Sudanese pound (£SD) | 100 piastres | SDG | |
Tanzania (EA) | Tanzanian shilling (TSh) | 100 senti | TSZ | |
Togo (WA) | CFA franc BCEAO (CFA) | 100 centimes | XOF | See note 1 |
Tunisia (NA) | Tunisian dinar (DT) | 1 000 milim/millimes | TND | The name dinar originates from the Roman denarius |
Uganda (EA) | Ugandan shilling (Ush) | 100 cents | UGX | |
Zambia (EA) | Zambian kwacha (ZK) | 100 ngwee | ZMW | The name kwacha originates from the Bemba and Nyanja language word for dawn |
Zimbabwe (EA) | Zimbabwean dollar (Z$) | 100 cents | ZWD |
Notes
- The CFA franc BCEAO (currency code XOF and currency sign CFA) is the currency shared by eight countries in West Africa, namely Benin, Burkina Faso, Côte d’Ivoire (Ivory Coast), Guinea-Bissau, Mali, Niger, Senegal, and Togo. All the countries are former French colonies, except Guinea Bissau, a former Portuguese colony.
BCEAO is the abbreviation for the French ‘Banque Centrale des États de l’Afrique de l’Ouest,’ commonly known as the Central Bank of West African States, located in Dakar, the capital of Senegal.
The eight countries from the West African Economic and Monetary Union (UEMOA).
The CFA franc BCEAO is commonly referred to as the West African CFA franc. CFA refers to ‘Communatué financière d’Afrique’ which translates to African Financial community.
The XOF has, inter alia, the following features:
- Is pegged to the euro.
- Is backed by the French treasury.
- Holds the same monetary value as the Central African CFA franc against other currencies.
- The CFA franc BEAC (currency code XAF and currency sign FCFA) is the official currency of six countries in central Africa: Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, and Gabon. Except for Equatorial Guinea, which is a former Spanish colony, all the countries are former French colonies.
The six countries are members of the central African currency union, which is referred to as the Economic and Monetary Union of Central Africa.
BEAC stands for ‘Banque des États de l’Afrique Centrale,’ French for Bank of Central African Estates. The BEAC is located in Yaounde, the capital of Cameroon.
The CFA franc BEAC is commonly referred to as the Central African CFA franc.
Similar to the XOF, the XAF is also linked to the euro and backed by the French treasury. It is also at parity with the West African CFA franc.
- The Malagasy ariary (MGA), the official currency of Madagascar, is a non-decimal currency, meaning its subunit is a fraction of its main or base unit. Put differently, the currency’s subunit is not based on a power of ten.
The MGA is only one of two non-decimal circulating currencies in the world. The other one is the Mauritanian ouguiya.
The subunit of Malagasy ariary is called iraimbilanja, which equates to one-fifth of one ariary.
- Similar to the Malagasy ariary (MGA), the Mauritanian ouguiya (MRU) is also a non-decimal currency.
The subunit of the MRU is referred to as khoum, meaning one-fifth. This means that one ouguiya contains five khoums.
Top ten African currencies with the highest exchange rates against the U.S. dollar in 2025
When evaluating currencies, one should keep in mind that the values of currencies hardly stay the same. Factors such as inflation, exchange rates, and interest rates are continuously affecting the values of currencies, causing fluctuations (upwards and downwards).
Hence, the value of a currency represents the strength or weakness of a particular currency at a given point in time or over a given period of time.
The list below of the top ten African currencies was published in an article of Business Insider Africa (author: Emmanuel Abara Benson) on 9 November 2025.
- Tunisian dinar (TND)
- Libyan dinar (LYD)
- Ghanaian cedi (GHS)
- Moroccan dirham (MAD)
- Botswanan Pula (BWP)
- Seychellois rupee (SCR)
- Namibian Dollar (NAD)
- Eritrean nakfa (ERN)
- South African rand (ZAR)
- Swazi lilangeni (SZL)
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