Naira ranked among worst-performing currencies in Africa
The Nigerian Naira has been facing tough times, ranking among the worst-performing currencies in sub-Sahara Africa as of August 2024.
According to the World Bank’s Africa’s Pulse report, the Naira’s value dropped by a staggering 43% ¹. This decline puts it on par with the Ethiopian Birr and South Sudanese Pound in terms of depreciation.
The report points to the increasing demand for dollars and limited dollar inflow as major contributors to the Naira’s depreciation.
“By August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region.
“The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 percent as of end-August.
“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,” it said.
Nigeria’s economy has historically been heavily reliant on oil exports, which makes it vulnerable to fluctuations in global oil prices. Additionally, the country’s struggles to diversify its economy beyond oil have exposed it to oil price shocks, further fueling the Naira’s decline.
The impact of this depreciation is far-reaching, affecting everyday Nigerians.
