THIS year has seen a sustained currency plunge in several African countries, with central banks across the continent scrambling to defend their currencies. The Nigerian naira has lost more than 20% of its value in the past 12 months; Standard & Poor’s said last month another naira devaluation is “inevitable”—possibly by more than 15%.
The South African has retreated 11% this year, and touched 13 to the dollar for the first time in 14 years. The Ugandan shilling, Kenyan shilling and Tanzanian shilling have all lost at least 12% of their value in the past 12 months; the Zambian kwacha, Angolan kwanza and Egyptian pound are similarly under pressure.
What’s going on?
Bottom line: It’s going to get worse before it gets better.