African Beer Standard.In 1999, The Economist reported the creation of an index, or standard, for the evaluation of African currency values using the local prices of beer. Beer, instead of Big Macs, was chosen as the product for comparison because McDonald's had not peneterated the African continent beyond South Africa, and beer met most of the same product and market characteristics required for the construction of a proper currency index. Investec, a South African investment banking firm, has replicated the process of creating a measure of purchasing power parity (PPP) like that of the Big Mac Index of The Economist, for Africa. The index compares the cost of a 375 milliliter bottle of clear lager beer across sub-Sahara Africa. As a measure of PPP, the beer needs to be relatively homogeneous in quality across countries, and must possess substantial elements of local manufacturing, inputs, distribution, and service in order to actually provide a measure of relative purchasing power. The beer is first priced in local currency (purchased in the taverns of the locals, and not in the high-priced tourist centers). The price is then converted to South African rand and the rand-price compared to the local currency price as one measure of whether the local currency is undervalued or overvalued versus the South African rand.

Beer Prices
Country	Beer	Local currency	Price in currency	Price in rand	Implied PPP rate	Spot rate
South Africa	Castle	Rand	2.29
Botswana	Castle	Pula	2.16	2.88	0.94	0.75
Ghana	Star	Cedi	1200.01	3.17	524.02	379.13
Kenya	Tusker	Shilling	41.22	4.01	18	10.27
Malawi	Carlsberg	Kwacha	18.52	2.65	8.09	6.98
Mauritius	Phoenix	Rupee	14.97	3.68	6.54	4.07
Namibia	Windhoek	N$	2.52	2.63	1.1	0.96
Zambia	Castle	Kwacha	1200.01	3.52	524.02	340.67
Zimbabwe	Castle	Z$	9.01	1.46	3.93	6.16

1 The currency of Botswana is overvalued or undervalued by___enter your response here%.

2 The currency of Ghana is overvalued or undervalued by___enter your response here%.

3 The currency of Kenya is overvalued or undervalued by___enter your response here%.

4 The currency of Malawi is overvalued or undervalued by___enter your response here%.

5 The currency of Mauritius is overvalued or undervalued by___enter your response here%.

6 The currency of Namibia is overvalued or undervalued by___enter your response here%.

7 The currency of Zambia overvalued or undervalued by___enter your response here%.

8 The currency of Zimbabwe is overvalued or undervalued by___ enter your response here%.