Naira Gets New Ranking As World Bank Releases List of Africa’s Worst Performing Currencies in 2024
- The Nigerian naira has been ranked among the worst-performing currencies in Sub-Saharan Africa for 2024
- World Bank revealed that since the start of 2024, the value of Nigerian currency has depreciated by 43%
- There is no respite yet for the naira as it continues to perform poorly in the official and unofficial markets
The World Bank has ranked the Nigerian currency as the third worst-performing in sub-Saharan Africa.
This was revealed in the October 2024 edition of Africa’s Pulse report, published by the World Bank and obtained by Legit.ng.
Source: Getty Images
According to the World Bank, the naira has weakened by approximately 43% year-to-date, positioning it alongside the Ethiopian birr and South Sudanese pound as one of the region’s weakest currencies.
Part of the report reads:
“The Angolan kwanza, Malawian kwacha, Nigerian naira, South Sudanese pound, and Zambian kwacha were the worst performing currencies in the region that year. More broadly, the weakening of most African currencies resulted from foreign exchange shortages as export proceeds were subdued and international debt payments increased.
"By the end of August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region.
"The Nigerian naira continued to lose value, with a year-to-date depreciation of about 43 percent as of the end of August.
The World Bank noted that demand for dollars by financial institutions, non-financial entities, and money managers has intensified pressure on the naira.
It added:
"Surging demand for U.S. dollars in the parallel market—driven by financial institutions, money managers, and non-financial end-users—coupled with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank, has contributed to the weakening of the naira.
"By the end of July 2024, the Central Bank of Ethiopia pledged to operate a market-based exchange rate with limited forex intervention moving forward.
"The Ethiopian birr dropped approximately 30 percent after the announcement, likely leading to inflationary effects."
Here is a snapshot of the naira performance:
Source: Getty Images
Furthermore, the World Bank highlighted that the Kenyan shilling and South African rand are the best-performing currencies.
The Kenyan shilling appreciated by 21%, making it the best performer in Sub-Saharan Africa, while the South African rand strengthened by 3.1%.
There is hope for naira
Legit.ng earlier reported that the US Federal Reserve has decided to lower interest rates, and this will weaken the United States dollar.
The decision has strengthened the Nigerian currency in the foreign exchange market.
Economists say that the US Federal Reserve's decision will also help attract more investment into Nigeria.
Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.
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Source: Legit.ng
