Naira among worst-performing African currencies —World Bank
The World Bank says the Nigerian naira is one of the continent’s worst-performing currencies.
According to the global bank, the naira has lost roughly 40% of its value versus the US dollar since it was devalued in June.
This was revealed in a report titled ‘Africa’s Pulse: An Analysis of issues impacting Africa’s economic destiny (October 2023 | Volume 28).’
It stated, “So far this year, the Nigerian naira and the Angolan kwanza are among the worst performing currencies in the region: these currencies have posted a year-to-date depreciation of nearly 40 percent.
“The weakening of the naira was triggered by the central bank’s decision to remove trading restrictions on the official market. For the kwanza, it was the decision of the central bank to stop defending the currency as a result of low oil prices and greater debt payments.”
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The World Bank list other currencies with significant losses so far in 2023 in Africa which included South Sudan (33 percent), Burundi (27 percent), the Democratic Republic of Congo (18 percent), Kenya (16 percent), Zambia (12 percent), Ghana (12 percent), and Rwanda (11 percent).
It noted that parallel exchange market rates are also compounding inflationary problems for some countries in the African region.
The Central Bank of Nigeria (CBN) authorized Deposit Money Banks to eliminate the naira rate cap at the official Investors and Exporters’ window of the foreign currency market in June 2023, allowing the naira to freely float against the dollar and other world currencies. Since then, the naira has officially dropped from N473.83/$ to roughly N800/$.
