Tanzania’s Finance Minister, Saada Mkuya, said earlier this week that there was nothing the government could do to stop the value of the shilling from sliding against the dollar. The Citizen reported her as saying that all major currencies in Africa are in freefall, thanks to the stronger dollar.
I have looked at the numbers to see whether this claim is correct. Specifically, I have looked at how five different currencies – including the Tanzanian shilling – have lost value against the US dollar since January 2015. The other four currencies are the Kenyan and Ugandan shillings, Zambian Kwacha and Mozambican Metical.
The chart tracks the value of each currency against the US dollar since the beginning of January, using data from oanda.com. The Kenyan shilling, for example, is now worth 92% of what it was worth six months ago:
All five currencies have clearly lost value against the dollar. But the Tanzanian shilling has lost substantially more than the others. It is now worth just 72% of what it was worth in January, compared to 84-92% for the others.
So the Minister was right to say that the strong dollar had affected other African currencies as well as the shilling, but that can only be part the story. There must also be other factors involved.