Naira Gets New Position as Report Shows Africa’s Top 10 Weakest Currencies in 2024

• The Nigerian currency, the naira, is among the 10 African currencies considered the weakest on the continent
• The Nigerian government devalued the currency during a currency reform in 2023, which has negatively impacted living standards
• Reports rank the naira and nine other African currencies among the continent’s weakest

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Exchange rate fluctuations, obstacles in local commerce, and weak investment are some challenges African countries face.

The development is due to currencies that perform below their intended value.

Nigeria devalues the naira

A weak currency can go beyond its direct economic consequences to undermine national pride and impact livelihoods.

Inflation also plays a critical role in the performance of a country’s currency.

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According to BusinessInsider, as a country’s currency depreciates, the cost of imported products and services increases, affecting currency performance.

In June 2024, the Nigerian government embarked on currency reforms, devaluing the naira.

Experts believe the action led to surging inflation, resulting in a high standard of living among Nigerians.

In recent months, the Nigerian naira has experienced volatility relative to the US dollar, with exchange rates surpassing N1,600 per dollar.

Effects of the naira devaluation 

Economic analysts believe that devaluing the Nigerian currency and removing subsidies from petroleum products, especially petrol, plunged the country into immense economic hardship.

They believe a weak currency and inflation reduce citizens’ purchasing power, making it challenging to afford essential items such as food, energy and medicines.

A weak currency can worsen the condition of low-income countries, intensifying existing social tensions and causing widespread misery.

10 weakest currencies in Africa

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According to Forbes Currency Converter, about 10 African countries struggle with weak currencies, affecting the livelihoods of their citizens.

• São Tomé & Príncipe: Dobra 22.282 per dollar
• Sierra Leone: Leone 20,969 per dollar
• Guinea: 8,630 per dollar
• Madagascar: 4,600 per dollar
• Uganda: 3,725 per dollar
• Uganda: 2,787 per dollar
• Democratic Republic of Congo: 2.871 per dollar
• Tanzania: 2.699 per dollar
• Malawi: 1,734 per dollar
• Nigeria: N1,590 per dollar

The naira depreciates in the official market

Meanwhile, the Nigerian currency, the naira, depreciated marginally on Wednesday, August 14, 2024, to trade at N 586.04 per dollar, down from the N1,582 it traded the previous day.

Data from FMDQ Exchange shows that the naira is the second time in a week after sustaining uninterrupted gains in the previous week due to the policies of the Central Bank of Nigeria.

Willing buyers and sellers quoted the dollar at a high of N1,595 to a dollar and a low of N1,495. 

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Exchange rate turnover declined further in the official market at $92.39 million.

Naira records first loss in over one week

Legit.ng earlier reported that the Nigerian naira recorded its first depreciation in over a week against the US dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX).

Data from FMDQ securities shows that naira weakened in value to N1,582.09/$1 on Tuesday, August 13, 2024.

The new exchange rate represents a 10.71% or N11.10 depreciation compared to the previous day's closing rate of N1,570.99/$1.

Source: Legit.ng