- Many African countries are struggling with low external reserves due to the global scarcity of forex
- Due to the forex scarcity, many countries are struggling to meet up with paying for various denominated obligations
- Nigeria recently had a spat with foreign airlines due to the country’s inability to pay foreign airlines
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Amid the scarcity of forex and declines in the global economy and possible global economic recession, many African countries are facing a severe forex crisis.
The crisis has already dealt a blow to many economies in Africa.
Nigeria on face-off with foreign airlines
Recently, many foreign airlines in Africa are finding it hard to repatriate their earnings to their home counties due to the country’s inability to raise the required forex.
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Other businesses in West Africa are finding it hard to raise dollars to help facilitate imports.
Many businesses in Kenya are struggling due to dollar scarcity. The Kenya Association of Manufacturers has raised concerns over the economic risks caused by the country’s declining dollar availability.
The Central Bank of Kenya directed commercial banks to ration dollars to buyers.
Foreign exchange reserves are dollar-denominated assets held on reserve by central banks.
And the International Monetary Fund (IMF) defines foreign reserves as official sector foreign assets that are readily available to and controlled by monetary authorities to finance payments imbalances.
Central banks in African are constitutionally mandated to maintain external reserves in bullion or gold coins, foreign short-term treasury bills and bonds.
Countries with low foreign reserves
- Somalia: $23.1 million.
- Equatorial Guinea: $40.8 million.
- Sao Tome & Principe: $75.2 million.
- Sudan: $177.9 million.
- South Sudan: $183.6 million.
- Burundi: $266.1 million.
- Chad: $310 million.
- Comoros: $329.6 million.
- The central African Republic: $350 million.
- Liberia: $538.5 million.
9 Countries in Africa where it expensive to rent one room apartments
Legit.ng reported that one of the essential needs of humans is shelter, which hardly comes cheap.
Many African countries resort to shanties because of a lack of affordable housing and their inability to afford rent.
Investopedia defines the property price to income ratio as the ratio between a median home price comparison to the median annual household income.