Indonesian President Prabowo Subianto conducted a cabinet reshuffle on September 8, replacing five ministers, four of whom previously served under former president Joko Widodo. The ministers removed include Legal and Security Affairs Minister Budi Gunawan, Minister of Cooperatives Budi Arie, Youth and Sports Minister Dito Ariotedjo, and Finance Minister Sri Mulyani. In addition, Abdul Kadir Karding, who formerly held the role of Minister for the Protection of Indonesian Migrant Workers, has now joined the Red and White cabinet. Reports suggest his appointment was made with the recommendation of Widodo.

Reshuffle aimed at strengthening Prabowo gov’t, secretary says

State Secretary Prasetyo Hadi has said that the Cabinet overhaul was made after “various developments, input, and continuous evaluations” carried out by President Prabowo Subianto and his team. Prasetyo said the reshuffle aimed to strengthen the government in meeting its goals. “Hopefully this decision will bring goodness to the nation, state and society,” Prasetyo said. The changes affected six ministries, with five ministers replaced and one new ministry created. The Ministry of Hajj was established to replace the Hajj Organising Agency (BPH) following revisions to the Hajj and Umrah Law.

Prabowo criticises double standards in international law at BRICS meeting

President Prabowo Subianto addressed a virtual BRICS leaders’ meeting on September 8, criticising what he called “double, even triple, standards” and ignorance of international law. The meeting was also attended by Russian President Vladimir Putin, Chinese President Xi Jinping, and Egyptian President Abdul Fattah al-Sisi. Prabowo described the bloc as a pillar of strength, stability and hope, and pledged Indonesia’s support for its growth. He expressed full backing for closer cooperation, praising Xi’s proposals and Brazil’s leadership under President Luiz Inácio Lula da Silva.

Rupiah drops 1.16% after Prabowo replaces finance minister

The Indonesian rupiah fell 1.16% to Rp16,498 per US dollar ($1.01) in spot market trading on September 10. The currency weakened by 188 points following President Prabowo Subianto’s replacement of Finance Minister Sri Mulyani with Purbaya Yudhi Sadewa. Analyst Lukman Leong said the rupiah’s fall was linked to the cabinet change, noting the US dollar index remains under pressure due to expectations of a Federal Reserve rate cut.

Indonesia’s youngest minister hit by Cabinet revamp

The Ministry of Youth and Sports was among five ministries reshuffled by President Prabowo Subianto on September 8. Dito Ariotedjo , who previously held the post, was removed from the Red and White Cabinet. He was active in student and youth organisations before joining Golkar. At 33, he became the youngest minister in President Joko Widodo’s cabinet, later serving again under Prabowo before his dismissal.

Currency losses push up the price of imported essentials from food and fuel to fertiliser, denting living standards.

Nigeria's naira has fallen by over 30% in 2025, following a Central Bank decision to float the currency and remove fuel subsidies, moves that spiked inflation and the cost of living. Today, it trades at approximately ₦1,500 per dollar.

The Malawian kwacha has collapsed by nearly 40% over the past year, reaching around MWK 1,700/USD, deepening economic hardship in an agriculture-dependent, import-reliant economy. Malawians now face fertiliser costs that are five to seven times higher than just two years ago, a disaster for farming communities already stretched by economic and climatic shocks. The African Exponent

Other currencies like the Rwandan franc and Congolese franc have depreciated by approximately 19% and 17% , respectively, driven by struggles in export capacity, political instability, and import dependence.

Meanwhile, the South African rand remains volatile, recently flirting with multi-month lows around ZAR 19.40/USD. Although linked to bleeding investor sentiment, the rand has not collapsed entirely, thanks to gold prices and occasional policy support.

What’s causing the crisis?

Many African nations owe large sums in USD. As local currencies lose value, servicing that debt becomes exponentially more expensive, leaving little flexibility for governments already contending with rising inflation and budget shortfalls.

Several economies export largely raw materials but then import finished goods, often priced in dollars at significantly higher costs. That imbalance puts extreme pressure on currencies, especially when global demand softens.

In times of global uncertainty, whether due to rising U.S. interest rates, geopolitical shifts, or local political instability, investors withdraw funds. This capital flight quickly drains local currency reserves and triggers sharp depreciation.

Many central banks also do not have enough dollar reserves to cushion their currencies during market stress. Without this buffer, even modest shocks can cascade into deeper crises.

Some central banks have responded with sharp interest rate hikes (e.g., in Nigeria, Angola, Egypt), while others, like Kenya or South Africa, have taken a more cautious approach. The inconsistent policy responses can further unsettle markets

Beyond the economics, the crisis has social ramifications: disillusionment is rising, and protest movements are gaining traction as youth struggle to find employment in a shrinking economy

Can the dollar’s grip be weakened?

Some countries are exploring alternatives to dollar-dominated trade. For example, Kenya has started using a Pan-African Payment and Settlement System (PAPSS) to enable intra-African trade in local currencies, an initiative aimed at reducing dependence on foreign exchange.

The African Development Bank also projects further currency declines in 2025 across 21 nations, while noting that a few like Kenya, Morocco, and the CFA franc zone may see modest appreciation.

While depreciation might eventually benefit exporters, it is causing harm to wages, prices, and household security today. Efforts to de-dollarize trade and finance are promising, but current momentum shows most economies remain tethered to U.S. monetary moves for better or worse.

So, how did the dollar become this powerful? And what does it mean for countries that depend on it every day, even for transactions between neighbouring nations?

In the capital, Addis Ababa's biggest marketplace, Merkato, vendors and buyers cry wolf about the huge sums of money they need to sell their goods for and buy at respectively.

According to Abubakar Jemal, a shopkeeper who spoke to AFP, sales are slow due to the continuous increase in prices.

"When the cost of an item increases, the only option is to raise the price and sell it at a higher rate. As you can see, business has slowed down because of this. Since the dollar increased, the business has been slow," he stated.

Medanit Woldegebriel who is a clothes shop owner, detailed the exact price hikes her business had witnessed over the last few months. Holding onto a shirt from her collection she explained: "These shirts used to be 1500 birr ($13), and now they're 2500 birr ($21.5). It's the same for these sweaters; they used to be 1200 birr ($10.3), and now they're 1800 birr ($15.5)."

The National Bank of Ethiopia's decision to shift from a fixed to a market-based exchange rate, backed by the International Monetary Fund (IMF), has resulted in the Ethiopian birr losing 30% of its value. This move, aimed at stabilising the economy and attracting foreign investment, has had immediate and profound impacts on the cost of living.

The urban poor are among the hardest hit by these changes. With wages remaining stagnant, the increased cost of living has made it difficult for many to make ends meet. Pensioners and low-income workers are particularly vulnerable, as their fixed incomes are quickly eroded by inflation.

At the launch of the new currency also known as 'Zimb Gold', Zimbabwe's Reserve Bank governor, John Mushayavanhu , directed all banks to convert any US dollars in their possession, as well as those held in their vaults, into ZiG.

"With effect from today, banks shall convert the current Zimbabwe dollar balances to ZiG," Mushayavanhu said, adding that it "will circulate with other currencies in the basket. If we implement these measures, we expect them to impact inflation."

Fifteen days have passed since the introduction of 'Zimb Gold,' declared to have been in circulation since April 8. However, ZiG has not yet fully supplanted all transactions due to the government's decision to postpone distribution until April 30.

Zimbabwean currencies have historically faced off against the US dollar, with the latter consistently emerging victorious. Will the outcome be any different when ZiG eventually takes over after a few years?

Zimbabwe's history with the US dollar

Zimbabwe's history with the US dollar is a complex one, marked by economic challenges and currency changes. The Zimbabwean dollar (ZWD) was introduced in 1980 to replace the Rhodesian dollar at par and was initially worth more than the US dollar in the official exchange market. In the early 21st century, the country experienced extreme hyperinflation, leading to the dramatic devaluation of the ZWD.

This resulted in three redenominations and a $100 trillion banknote issuance . The hyperinflation led to the abandonment of the ZWD in 2009. In its place, multiple foreign currencies, including the US dollar, were used for transactions. In 2016, Zimbabwe introduced bond notes and coins to address the shortage of US dollars, which were pegged to the US dollar but not accepted outside the country.

Subsequently, Zimbabwe ended a decade of official use of the US dollar in most domestic transactions, reintroducing a local currency (RTGS Dollar) that had been abandoned in 2009 due to hyperinflation in 2019. In April 2024, the RTGS Dollar was replaced with a new gold-backed currency called ZiG. Throughout this period, the US dollar has played a critical role in Zimbabwe's economy, serving as a stable currency during times of economic turmoil.

Why did Zimbabwe switch from US dollars to ZiG?

Zimbabwe switched from the US dollar to the new gold-backed currency, ZiG, as part of its latest attempt to create a stable and reliable currency that can help alleviate the economic challenges the country has faced for the past 25 years .

The previous currency, the RTGS, had lost a significant portion of its value, and annual inflation had reached a seven-month high of 55% in March . The central bank committed to backing the amount of local currency in circulation with an equivalent value in precious minerals, mainly gold, or foreign exchange, to prevent the currency from losing value like its predecessors.

The switch also comes at a time when Zimbabwe is dealing with the effects of a serious drought, which has destroyed half of the country's maize crop , further emphasising the need for economic stability. The ZiG is the country's sixth attempt at introducing a revamped currency.

The current state of the ZiG

In the absence of the new currency ZiG, Zimbabweans are compelled to rely on the US dollar for their transactions. Nevertheless, Zimbabwe's informal traders, constituting approximately 75% of the nation's workforce, have ceased accepting the ZIMdollar, also known as the RTGS dollar, due to concerns over its depreciating value.

As reported by Africanews , an economist, Happy Zengeni explained that there happens to be inadequate or transparent measures that will push the newly introduced ZiG to thrive.

"When you introduce new measures, you will be hoping that you will bring stability and lower inflation but you need to be disciplined and sincere about the process," economist Happy Zengeni explained. "The ordinary Zimbabwean cannot inject liquidity into the economy but capacity rests with the authorities so they need to be sincere about it."