Did you know that the Tunisian Dinar (TND) is, in 2023, the highest currency in Africa, while the Sierra Leone's Leone is the lowest currency, in comparison to the dollar?

Africa's exclusion from the global currency ranking is a no-brainer to many, given that it is home to the world's ten most undeveloped countries. Nevertheless, several legal tenders on the continent command respect in the foreign currency market. In that regard, dozens of African currencies are higher than the Naira, Nigeria's official currency, even though the Nigerian economy is Africa's largest economy with the highest nominal GDP, an influencing factor in currency valuation.

The United States dollar (USD) remains the global benchmark when ranking currencies; therefore, ranking of the strongest and weakest currencies in Africa is based on each currency's dollar strength or purchasing power.

◼️ DINAR | Tunisia, North Africa 

With a dollar conversion rate of 3.07 Dinars, the Tunisian Dinar (TND) is, in 2023, the highest currency in Africa. The TND was launched in 1958, two years after Tunisia's independence from France, while the Tunisian franc was in force. It replaced the franc at a rate of 1000 francs = 1 dinar.

The dinar did not follow the devaluation of the French franc in 1958, thus the exchange rate peg was abandoned. Instead a peg to the United States dollar of 1 dinar = 2.38 dollars was established which was maintained until 1964, when the dinar devalued to 1 dinar = 1.90 dollars. This second rate was held until the dollar was devalued in 1971.

Tunisia had a historically low inflation. The dinar was less volatile in 2000 to 2010 than the currencies of its oil-importing neighbors, Egypt and Morocco. Inflation was 4.9% in fiscal year 2007–08 and 3.5% in fiscal year 2008–09. However, the value of the currency has been falling since then, and between 2008 and 2018, the dinar depreciated by about 55% against the U.S. dollar, from 76¢ to 34¢, and about 46% against the euro, from 55 cents to 30 cents.

To enhance its status as the most valuable currency in Africa, the Tunisian government declared it illegal to import, export, or convert dinars into another currency. And so, it is a criminal offence in Tunisia to import or export dinar. Every year, each citizen can convert into foreign currency up to 6,000 Tunisian dinars before departure from the country. Therefore, prices at duty-free shops are in convertible currencies such as euros, US dollars and British pounds. There are many converting ATMs in the country for tourists.

◼️ LEONE | Sierra Leone, West Africa

The leone is the currency of Sierra Leone. It is subdivided into 100 cents. As of 1 July 2022, the ISO 4217 code is SLE due to a redenomination of the old leone (SLL) at a rate of SLL 1000 to SLE 1. The leone is abbreviated as Le placed before the amount.

The leone was introduced on 4 August 1964. It replaced the British West African pound at a rate of 1 pound = 2 leones (i.e., 1 leone = 10 shillings). When it was introduced, one leone was worth precisely half a pound sterling or US$1.40. The leone was worth more than the U.S. dollar until the 1980s, when the currency started to devalue rapidly. Years of high inflation have caused the value of leone to plummet, and a U.S. dollar became worth thousands of leones starting in the 2000s.

In August 2021, it was announced that a new leone (SLE), worth 1000 SLL, would be introduced. The new leone was eventually introduced in July 2022. Old leone denominations remained legal tender and continued to circulate. However, inflation continues to erode the purchasing power of the leone, which has been accelerating since 2022. As of 5 April 2023, one U.S. dollar was valued at 21 SLE or 21,000 SLL, making the 20 SLE note (the highest circulating denomination) worth less than US$1.

Sources: Clacified | Wikipedia