The Nigerian Naira has been identified as one of the worst-performing currencies in sub-Saharan Africa, according to the World Bank's latest Africa's.
As of August 2024, the Naira experienced a significant depreciation, losing approximately 43 percent of its value. This decline places it alongside the Ethiopian Birr and South Sudanese Pound in terms of poor performance within the region.
The report attributes the Naira's depreciation to several factors. A surge in demand for US dollars, particularly in the parallel market, has been a major driver.
This demand is fueled by financial institutions, money managers, and non-financial end-users. Compounding the issue is the limited inflow of dollars and slow foreign exchange disbursements to currency exchange bureaus by the Central Bank of Nigeria.
These dynamics have led to a sharp drop in the Naira's value, with a notable decrease from N1552.92 to N1658.97 per dollar in just one day.
Despite the currency's struggles, the World Bank projects economic growth for Nigeria at 3.3 percent in 2024 and 3.6 percent in 2025-26. However, this optimistic outlook is tempered by rising inflation, which climbed to 32.70 percent in September from 32.15 percent in August 2024.
The Central Bank of Nigeria's interventions to stabilize the currency have been largely ineffective against these inflationary pressures.
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