Naira Among Worst-Performing Currencies in Sub-Saharan Africa: World Bank Report Reveals Economic Challenges

By the end of August 2024, the Nigerian Naira emerged as one of the worst-performing currencies in sub-Saharan Africa, according to the latest Africa's Pulse report from the World Bank. The report indicated that the Naira's depreciation was comparable to the decline of the South Sudanese Pound and the Ethiopian Birr.

The Naira has lost nearly 43% of its value since the start of the year, with the depreciation attributed to rising demand for US dollars and limited dollar availability. The report explained, "Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the Naira."

Despite interventions by the Central Bank of Nigeria, the Naira has remained volatile in the foreign currency market. On Tuesday, the Naira traded at N1658.97 against the dollar, following a significant drop from the previous day.

Additionally, Nigeria's inflation rate increased from 32.15% in August 2024 to 32.70% in September. Nevertheless, the World Bank projects that the country's economy will grow by 3.3% in 2024 and continue to expand at a rate of 3.6% in 2025–2026.