The naira has been listed as one of the worst-performing currencies in Sub-Saharan Africa for 2024. This is according to the World Bank’s latest Africa’s Pulse report.
The report revealed that by the end of August 2024, the naira had depreciated by about 43 per cent year-to-date. This positioned it alongside the Ethiopian birr and South Sudanese pound as the region’s weakest currencies.
The depreciation is attributed to increasing demand for U.S. dollars in the parallel market, limited dollar inflows, and delays in foreign exchange disbursements by Nigeria’s Central Bank. The Federal Government and Central Bank’s inconsistent policies have also largely contributed to the depreciation of the currency.
The Kenyan shilling and South African ran also faced challenges in 2023 but have shown signs of recovery in 2024. By the end of August, the Kenyan shilling strengthened by 21 per cent, making it one of the region’s top-performing currencies. Meanwhile, Nigeria continues to struggle with dwindling foreign currency reserves and inflation. The naira’s depreciation has also contributed to rising domestic prices, especially for imported goods.
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