Africa’s external reserves have seen a remarkable recovery, defying the challenges posed by an unstable global economy. According to the African Export-Import Bank (Afreximbank) in its recently published African Trade Report 2024, the continent’s foreign exchange reserves rose by 2.6% year-on-year to US$411.9 billion in 2023.
This growth followed a prior contraction of 2.3% to US$401.3 billion in 2022, signaling renewed financial resilience across African economies.
The strengthening of Africa’s reserve position is attributed to a combination of factors, including strong commodity prices and a rise in crude oil revenues. Oil exports, which account for over 36% of Africa’s total exports, have been instrumental in reversing the downward trend observed in previous years.
Despite global economic uncertainties, African oil exporters leveraged the high demand for crude to stabilize their economies, with export receipts and balance of payments benefiting massively.
Afreximbank’s report highlights that, beyond commodity prices, sustained capital inflows have played a massive role in enhancing the continent’s reserves. New investments in greenfield projects, along with the backing of international and regional development finance institutions, have been crucial to this recovery.
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Also, the resurgence of tourism and increased remittances from the diaspora have injected much-needed foreign exchange into African economies.
In line with these developments, Africa’s average import cover improved slightly to 5 months in 2023, up from 4.7 months in 2022. This surpasses the International Monetary Fund’s (IMF) recommended threshold of 3 months, providing a safety net for African countries against external shocks.
The relevance of stable and growing external reserves extends beyond mere numbers. A strong reserve position boosts investor confidence, attracting further capital inflows that can drive economic growth. It also bolsters a country’s ability to meet international obligations, stabilize its currency, and weather global financial storms.
However, experts caution that while the increase in reserves is a positive sign, African nations must remain vigilant. The global economy remains volatile, and commodity prices can be unpredictable. Sustained efforts are needed to diversify economies, reduce reliance on commodity exports, and invest in sectors that can provide long-term stability.
The list below shows the African countries with the largest overall growth in external reserves within a one year span.
Top 10 African countries with the highest external reserve growth
| Rank | Country | Reserve growth in 2023 (%) |
|---|---|---|
| 1. | São Tomé and Príncipe | 105.4 |
| 2. | Chad | 83.6 |
| 3. | Congo Republic | 59.7 |
| 4. | Liberia | 43.4 |
| 5. | Central Africa Republic | 35.9 |
| 6. | Lesotho | 35.3 |
| 7. | Equatorial Guinea | 32.3 |
| 8. | Mozambique | 32.3 |
| 9. | Eritrea | 30.1 |
| 10. | Tunisia | 28.1 |
