performance to result from chanfeS in the rate of interest and are watching what happens in those countries that have cpted for change before they take any definite action. 44. The eY.chenge rate has also been the subject of considerable debate. G rante c that almost all African currencies are aver­ value6, the auestion is whether to devalue or not. The response in the past year has been miYed. In Zaire the response was posi­ tive and devaluations of 25 per cent in 1979 and 30 per cent in 1980 were followed by a further 40 per cent devaluation in 1981. Burunci cevaluec by 10 per cent, while in Uganda the shilling was floated. In Niferia the debate is unresolved. The appeal of devaluation is due to its eypectec impact on the external and in­ ternal position. Devaluation, it is arfued, will improve the balance of payments by increasin€ export earnines and decreasing imports because of the increase in the price of imported goods. Domestically the hirher prices of eYports in domestic currency and the hifher prices bf imports are e>:.pected to increase output. 45. The counter arruments are equally persuasive. Since the prices of African e:xports (excludinf oil) are determined outside the continent, anc since the supply of e~ports is inelastic, devaluation would decrease eYport revenue. On the other hand, the increase in the price of imports would net only be inflation­ ary but would also have a detrimental effect on investment. As fer its impact on comesti c output, this caul d be achieved th rourh the use of more potent measures such as raisinr prices, tariffs or import quotas so that output of eY.pcrt and import substitution activities could flourish. 46. These two sensitive issues need to be of each country's specific political and and therefore no reneral prescriptions are 
**Analysis**
The text discusses the issues surrounding currency devaluation and its impact on the economy of African countries. It highlights the debate surrounding devaluation and its potential effects on the balance of payments, export earnings, import prices, and domestic output. The text also touches on the counterarguments against devaluation, such as its potential to decrease export revenue and have a detrimental effect on investment.

**Category**
International trade, Economic development