African countries dominate list of worst devalued currencies in 2016
Economic slowdown due to falling commodity prices particularly oil and slow global economic growth, adversely affected most African economies in the course of 2016.
But as per the evolution of national currencies in the past year, the currencies of two major Portuguese speaking African countries greatly suffered. The metical of Mozambique and the Angolan kwanza, were listed among the ten most devalued currencies in 2016.
The kwanza fell by almost 20% and the metical lost more than 30%. These two currencies ranked among the ten worst performers, only surpassed by the currencies of Nigeria, Venezuela, Suriname and Egypt.
The Mozambican currency’s depreciation reportedly hit a low of 33.2%.
The Angolan kwanza was also devalued by 18.9% in the last twelve months, which puts it in a better stead over Mozambique’s metical and ahead of the currencies of Mongolia, Congo and Sierra Leone.
The International Monetary Fund (IMF) and state budget donors suspended aid to Mozambique in April last year after the release of government-guaranteed hidden loans between 2013 and 2014 amounting to over 1.4 billion dollars (1.2 billion euros).
The amount added to the already known costs of the Mozambican Tuna Company (Ematum), which was contracted under the same arrangement.
On October 25 2016, the Mozambican government assumed financial incapacity to pay the next installments of its debts.
Due to the crisis stemming from the slump in oil price on the international market, Angola saw its fiscal revenue cut to less than half its 2015 figure. The country also suffered low inflow of foreign currency thus, aggravating the cost of imports and access to products, including food, whose prices shot up.
The IMF expects Angola to see growth of 1.5% this year, while the forecast for economic expansion for Mozambique is 5.5%.