n AfricaGrowth Agenda - Key developments in the currencies of the SANE economies : January - June 2011

Volume 2011, Issue 10
  • ISSN : 1811-5187


The four largest economies in Africa, namely; South Africa, Algeria, Nigeria and Egypt (SANE) represent an estimated 20% and 33% of Africa's total land area and population, respectively. They also account for a little over 50% of Africa's gross domestic product in both nominal and purchasing power parity terms. Nearly half of Africa's exports, imports, foreign direct investments and foreign reserves come from this group of countries. The economic importance of this group of countries becomes even more pronounced at the sub-regional level. Algeria and Egypt account for over 50% of the total output of goods and services produced in North Africa. South Africa's economic activities constitute 80% of the total output of the Southern African region. Nigeria is an important player in the Economic Community of West Africa (ECOWAS), accounting for half of its population and over 66% of the total output of the sub-region. The market size of the group of SANE economies offers potential opportunities for businesses to thrive by benefiting from increasing scale economies. The per capita income of the SANE collectively is three times more than the rest of the continent (Kasekende et al, 2007). The above-mentioned characteristics form part of factors that put the group of SANE economies above other African countries in terms of competitiveness, which in turn, accounts for the relative strength of their domestic currencies. This article provides a brief discussion of trends in the value of the domestic currencies of the group of SANE economies during the first and second quarters of 2011.

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