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, that 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This is still being practised in some communities across Africa, nationally, the trade by barter system has been replaced by legal tender globally known as “currency”.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 that 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 banknotes and coins which they use for socio-economic activities.
Means of Trade Exchange During the Pre-colonial Era in Africa
New Face of African Currencies
In the 1950s and 60s, 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 the Tunisian dinar and Libyan Dinar. At a time, the Libyan dinar was the strongest currency on the continent for decades before it was relegated to the second position by the Tunisian currency.
The poor valuation of some of the African currencies culminated in some of them 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 at least NGN415 at the CBN exchange rate (you can check our History of US Dollar to Naira CBN Exchange Rate from 1972 till date)) while $1 is worth at least NGN580 (buy) and NGN590 or more (sell) at the black market rate, a speculative market that dominates Nigeria’s FX market.
Trading Currencies Against Stable Currency
In what can be described as Blackmarket exchange market (which is illegal), most African countries now have a free market where dollars, Pounds, Euro are traded.
Hundreds of traders make millions from the venture, which has some negative effects on their economy.
Attempt on regional currency
There had been several plans to adopt a unified regional currency. But such moves failed because of the political will among member countries.
For instance, there was a planned West African Monetary Zone among Anglophone African countries planned for implementation in 2009. It failed.
Also, member countries of the East African Community planned to introduce a single currency, the East African shilling in 2012.
Does this hinder trade with African countries?
Definitely, NO. You can engage any African country in global trade.
List of Currencies In Africa, Code And Currency Sign
There are 54 countries in Africa according to the United Nations data while there are four dependent territories.
|Benin Republic (CFA Franc)||XOF|
|Burundi (Burundi Franc)||BIF||FBu|
|Burkina Faso ( CFA Franc)||XOF||CFA|
|DR Congo (Francs)||CDF||FC|
|Djibouti (Djibouti Franc)||DJF||Fdj|
|Equatorial Guinea (CFA Franc BEAC)||XAF||FCFA|
|Cameroon (CFA Franc BEAC)||XAF||FCFA|
|Cape Verde (Cape Verde Escudo)||CVE||$|
|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 (Eritrean Nakfa)||ERN||Nkf|
|Gabon (CFA Franc)||XAF||FCFA|
|Madagascar (Malagasy ariary)||MGA||Ar|
|Liberia (Dollar)||LRD||L$, LD$|
|Guinea-Bissau (Guinea-Bissau Peso)||GWP||CFA|
|Kenya (Shillings )||KES||KSh|
|Lesotho (Loti)||LSL||L or M|
|Mali (CFA Franc)||XOF||CFA|
|Namibia (Dollar)||NAD||$, N$|
|Niger (CFA Franc)||XOF||CFA|
|Republic of the Congo (Franc)||XAF||FCFA|
|Sierra Leone (Leone)||SLL||Sl|
|Senegal (CFA Franc)||XOF||CFA|
|São Tomé and Principe (Dobra)||STD||Db|
|Rwanda (Franc)||RWF||FRw, RF, R₣|
|South Sudan (Pound)||SSP||SS£|
|South Africa (Rand)||ZAR||R|
|Togo (CFA Franc)||XOF||CFA|
|Zambia ( Kwacha)||ZMW||K|
Dependent territories in Africa
As stated earlier, there are four dependent territories on the African continent. The listed below and their claimant
|Saint Helena||United Kingdom|
Reunion is the most confusing of them all, some people think Reunion is an African country, but it is not. Reunion is one of the oversees territories of France.
On the global scene, less than 5 of the African currencies perform fairly well. Within the continent, the Tunisian dinar and Libyan Dinar remain the strongest,
For instance, just 10K Libyan Dinar will fetch you NGN863, 904 in Nigerian currency. 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.