World Bank Highlights Naira As One Of The Worst Performers In African Currency Markets

World Bank Highlights Naira As One Of The Worst Performers In African Currency MarketsThe Nigerian Naira is ranked among the worst-performing currencies in sub-Saharan Africa as of August 2024, according to the latest Africa’s Pulse report from the World Bank.

The report indicates that the Naira’s decline is comparable to that of the Ethiopian Birr and the South Sudanese Pound. It attributes the Naira’s depreciation over recent months to a growing demand for US dollars coupled with limited dollar inflows. Specifically, the Naira has lost about 43 percent of its value as of August.

The report states, “By August 2024, the Ethiopian Birr, Nigerian Naira, and South Sudanese Pound were among the region’s poorest performers. The Naira continued to depreciate, experiencing a year-to-date decline of approximately 43 percent.”

Factors contributing to this weakening include surges in parallel market demand for US dollars from financial institutions and non-financial users, along with restricted dollar inflows and slow disbursements from the central bank to currency exchange bureaus.

On Tuesday, the Naira fell sharply, trading at N1658.97 per dollar, down from N1552.92 the previous day. Despite ongoing interventions from the Central Bank of Nigeria, the Naira has faced persistent fluctuations against the dollar in the foreign exchange market.

Additionally, Nigeria’s inflation rate increased to 32.70 percent in September, up from 32.15 percent in August 2024. Nonetheless, the World Bank projects Nigeria’s economic growth at 3.3 percent for 2024 and 3.6 percent for 2025–26.

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