In the pre-colonial era, African countries adopted their own means of exchange. For instance, in Nigeria, there was trade by barter system.
In layman’s words, trade by barter is using your own goods in exchange for other goods you’re in need of.
This means, if you have a cup of garri and you need a cup of beans, you’d have to look for someone who had beans and who is in need of garri.
This is still being practised in some communities across Africa, nationally, the trade by barter system has been replaced by legal tender globally known as “currency”.
Currency is the medium of exchange which is accepted as payment for goods and services and repayment of debts in global trade.
Today, all African countries have their currency backed by law, circulated as banknote and coins which they use for socio-economic activities.
Highlight
Means of Trade Exchange During the Pre-colonial Era in Africa
- Foodstuffs
- Shells
- Salt
- Cattle
- Goats
- Ingots
- Gold
- Arrowheads,
- Axes,
- Beads
- Iron,
- Blankets,
- Slaves
New Face of African Currencies
In the 1950s and 60s, when some of the African countries began to gain Independence.
Some of them changed their currency’s appearance when a new government takes power (often the new head of state will appear on banknotes), though the notional value remains the same.
Also, in many African currencies, there have been episodes of rampant inflation, resulting in the need for currency revaluation e.g. the Zimbabwe dollar, which is among the top weakest currencies in Africa.
Due to the mismanagement of their resources due to poor leadership on the continent, most of the currencies in Africa lost their value except Libyan Dinar, which remains the strongest currency in the continent.
The poor valuation of some of the African currencies culminated some of them into pegging their currency to the US dollar.
1USD was N0.658 in 1972 during the regime of Gen. Yakubu Gowon (rtd), today. 1USD to Naira is N379.5 at the CBN rate (you can check our History of US Dollar to Naira CBN Exchange Rate from 1972 till date)) while $1 at hand goes for N472 at the black market rate, a speculative market that dominates Nigeria’s FX market.
Trading Currencies Against Stable Currency
In what that can be described as Blackmarket exchange market (which is illegal), most African countries now have a free market where dollars, Pounds, Euro are traded.
Hundreds of traders make millions from the venture, which has some negative effects on the their economy.
Attempt on regional currency
There had been several plans to adopt a unified regional currency. But such moves failed because of the political will among member countries.
For instance, there was planned West African Monetary Zone among Anglophone African countries planned for implementation in 2009. It failed.
Also, member countries of the East African Community planned to introduce a single currency, the East African shilling in 2012.
Does this hinder trade with Africa countries?
Definitely, NO.
You can engage any Africa countries in global trade.
List of Currencies In Africa, Code And Currency Sign
| Country | Currency Code | Currency Sign |
| Algeria (Dinar) | DZD | DA |
| Angola (Kwanza) | AOA | KZ |
| Benin Republic (CFA Franc) | XOF | |
| Botswana (Pula) | BWP | P |
| Burundi (Burundi Franc) | BIF | FBu |
| Burkina Faso ( CFA Franc) | XOF | CFA |
| Egypt (Pound) | EGP | E£ |
| DR Congo (Francs) | CDF | FC |
| Djibouti (Djibouti Franc) | DJF | Fdj |
| Equatorial Guinea (CFA Franc BEAC) | XAF | FCFA |
| Cameroon (CFA Franc BEAC) | XAF | FCFA |
| Cape Verde (Cape Verde Escudo) | CVE | $ |
| Central African Republic (CFA Franc) | XAF | FCFA |
| Chad (CFA Franc) | XAF | FCFA |
| Comoros (Comoros Franc) | KMF | CF |
| Cote d’Ivoire (CFA Franc) | XOF | CFA |
| Eritrea (Eriterian Nakfa) | ERN | Nkf |
| Ethiopia (Birr) | ETB | Br |
| Gabon (CFA Franc) | XAF | FCFA |
| Gambia (Dalasi) | GMD | D |
| Ghana (Cedi) | GHS | GH₵ |
| Libya (Dinar) | LYD | LD |
| Madagascar (Malagasy ariary) | MGA | Ar |
| Malawi (Kwacha) | MWK | K |
| Liberia (Dollar) | LRD | L$, LD$ |
| Guinea-Bissau (Guinea-Bissau Peso) | GWP | CFA |
| Guinea (Franc) | GNF | FG |
| Kenya (Shillings ) | KES | KSh |
| Lesotho (Loti) | LSL | L or M |
| Mali (CFA Franc) | XOF | CFA |
| Mauritania (Ouguiya) | MRO | |
| Mauritius (Rupees) | MUR | Rs |
| Morocco (Dirham) | MAD | DH |
| Mozambique (Metical) | MZN | MT |
| Namibia (Dollar) | NAD | $, N$ |
| Niger (CFA Franc) | XOF | CFA |
| Nigeria (Naira) | NGN | N |
| Republic of the Congo (Franc) | XAF | FCFA |
| Réunion (Euro) | EUR | |
| Sierra Leone (Leone) | SLL | Sl |
| Somalia (Shillings) | SOS | Sh |
| Seychelles (Rupees) | SCR | SR |
| Senegal (CFA Franc) | XOF | CFA |
| São Tomé and Principe (Dobra) | STD | Db |
| Rwanda (Franc) | RWF | FRw, RF, R₣ |
| South Sudan (Pound) | SSP | SS£ |
| Sudan (Pound) | SDG | SDG |
| Swaziland (Lilangeni) | SZL | |
| South Africa (Rand) | ZAR | R |
| Tanzania (Shillings) | TZS | TSh |
| Togo (CFA Franc) | XOF | CFA |
| Tunisia (Dinar) | TND | DT |
| Zambia ( Kwacha) | ZMW | K |
| Uganda (Shillings) | UGX | USh |
| Zimbabwe (Dollar) | ZWD | K |
Final thought:
In the global scene, less than 5 of the African currencies perform fairly well. Within the continent, Libyan Dinar remains the strongest,
For instance, just 10K Libyan Dinar will fetch you N2,834,200 in Nigeria. This doesn’t mean that the Naira is the weakest on the continent, but its economic strength hasn’t shown any significant power in its currency.
