Surge in Precious Metals Strengthens Multiple African Currencies

An increase in precious metal prices is helping various African currencies recover from a difficult start to the year.

The Zambian kwacha has surged by about 8% in June, representing the strongest performance worldwide. It is closely followed by the Tanzanian shilling, which has climbed 4% this month, and the Nigerian naira, with a gain of 3.1%, according to Bloomberg’s data.

This rebound in the three currencies is linked to a rise in the prices of metals like platinum, palladium, gold, silver, and copper. Ghana, which defaulted on its debts in late 2022 and ranks among the top global exporters of gold and cocoa, is experiencing the best-performing currency year-to-date, with the cedi appreciating by over 43% against the dollar.

The recovery is easing the severe depreciation seen last year, which triggered inflation and led to cost-of-living crises in countries like Nigeria, Ghana, Egypt, and Ethiopia—where currency declines ranged from 19% in Ghana to a staggering 56% in Ethiopia. These currency struggles prompted many African nations to raise interest rates in a bid to control inflation and attract foreign investment.

Currently, the strengthening of currencies, supported by a weaker dollar, is helping to “reduce inflationary pressures, potentially paving the way for interest rate cuts,” explained Simon Kitchen, head of macro strategy at Emerging and Frontier Capital.

© 2025 Bloomberg

Stay informed with Moneyweb’s complete finance and business news on WhatsApp here.