World Bank: The naira is one of the worst-performing currencies.

In 2024, the naira is predicted to be one of Sub-Saharan Africa's worst-performing currencies.

This is stated in the most recent edition of the World Bank report, Africa's Pulse.

By the end of August 2024, the naira had lost around 43% of its value year to date, ranking it among the poorest currencies in the region along with the South Sudanese pound and Ethiopian birr.

A number of reasons contribute to the naira's depreciation, such as the parallel market's explosive demand for US dollars, the country's restricted supply of dollars, and Nigeria's central bank's tardiness in disbursing foreign cash.

The World Bank report also emphasises how the naira has been under increased pressure due to the demand for dollars from financial institutions, non-financial end users, and money managers.

The South Sudanese pound, Nigerian naira, and Ethiopian birr were among the worst performing currencies in the area by August 2024, the report stated. As of the end of August, the value of the Nigerian naira had depreciated by around 43% year to date.

"The weakening of the naira can be explained by the surges in demand for US dollars in the parallel market, which are being driven by financial institutions, money managers, and non-financial end-users. Additionally, there are limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank."

The Nigerian government implemented several reforms to the foreign exchange market, including the liberalisation of the official exchange rate, which started in June 2023, but this scenario has remained unchanged.

To date, though, these initiatives have not been enough to stabilise the currency.

The naira's difficulties are indicative of Nigeria's larger economic issues, including as the country's small foreign exchange reserves and persistent inflationary pressures.

The research also points out that higher domestic prices, especially for imported items, have resulted from the naira's depreciation, making things more difficult for Nigerian consumers.

On the other hand, certain African currencies—like the South African rand and the Kenyan shilling—that had difficulties in 2023 have begun to strengthen this year.

By the end of August 2024, for example, the Kenyan shilling had increased by 21% year to date, making it one of the top performing currencies in the area.

In spite of this, pressures on exchange rates and shortages of foreign exchange continue to be major issues for many African countries.

On Monday, the naira gained 5.69 percent versus the dollar, according to data from the FMDQ Exchange.
On Friday, October 11, the exchange rate was N1,641.27/$1, but on Monday, October 14, it was N1,552.92/$1.

Foreign exchange turnover fell by 44.27 percent during the same period, from $616.73 million to $343.71 million, notwithstanding the naira's recovery.

The World Bank projects that Nigeria's Gross Domestic Product would grow by 3.3% in 2024 and then by a modest 3.6% in 2025–2026, providing a cautious view for the country's economic growth.

According to the report, Nigeria's economy is expected to grow by 3.3% in 2024 and 3.6% in 2025–2026 as macroeconomic and fiscal reforms begin to show some signs of improvement. June 2024 saw the highest level of inflation (34.2 percent year over year), which then dropped to 33.4 percent in July and then continued to 32.2 per cent in August.”