The World Bank don release their latest Africa Pulse report, and e show say the Nigerian naira dey among the worst performing currencies for Sub-Saharan Africa this year. According to the report, the naira don lose value by about 43% as of August 2024, making am one of the weakest currencies for the region.
The report cite say the main reasons for this depreciation be the high demand for US dollars, especially in the unofficial market, driven by financial institutions, fund managers, and non-financial end-users. Another reason be the limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the Central Bank of Nigeria.
The Ethiopian birr and South Sudanese pound also dey among the worst performers, with the birr dropping by 51% and the South Sudanese pound by over 60%. In contrast, the Kenyan shilling be the top-performing currency, appreciating by 21% year-to-date as of August 2024.
The depreciation of the naira don lead to higher prices, especially for imported goods, and this don increase the burden on Nigerian consumers. Nigeria’s inflation also peak at 34.2% in June 2024 but reduce to 32.2% by August. However, the inflation rate rise again to 32.7% in September 2024.
Despite these challenges, the World Bank project say Nigeria’s economy go grow by 3.3% in 2024 and 3.6% in 2025-26 as macroeconomic and fiscal reforms start to yield results.
