Naira Among Sub-Saharan Africa’s Worst-Performing Currencies in 2024 – World Bank

Naira Among Sub-Saharan Africa’s Worst-Performing Currencies in 2024 – World Bank

The naira has been identified as one of the worst-performing currencies in Sub-Saharan Africa in 2024, according to the latest World Bank report, “Africa’s Pulse”. By the end of August 2024, the naira had depreciated by around 43% year-to-date, ranking alongside the Ethiopian birr and South Sudanese pound among the region’s weakest currencies.

This depreciation is largely attributed to rising demand for U.S. dollars in the parallel market, limited dollar inflows, and delays in foreign exchange disbursements by Nigeria’s central bank. Despite government reforms, including the liberalization of the official exchange rate, these efforts have been insufficient to stabilize the currency.

The report also highlights that the naira’s depreciation has exacerbated inflation in Nigeria, driving up prices for imported goods and increasing the financial strain on consumers. While some African currencies, like the Kenyan shilling, have shown signs of recovery in 2024, foreign exchange shortages and pressure on exchange rates remain a significant challenge for many African economies.

Despite a brief appreciation of the naira in mid-October, foreign exchange turnover saw a sharp decline. The World Bank projects Nigeria’s economy will grow by 3.3% in 2024, with further growth expected in 2025-2026. However, the removal of fuel subsidies in 2023 and subsequent gasoline price hikes have continued to drive inflation, further complicating the country’s economic landscape.