The World Bank has revealed that the Nigerian Naira is among the Worst-performing Currencies on the African Continent.
According to the Global Financial Institution, the Naira has experienced a nearly 40% Depreciation against the United States Dollar since it was Devalued in June.
This Information was Disclosed in the World Bank’s report titled ‘Africa’s Pulse: An Analysis of Issues Shaping Africa’s Economic Future (October 2023 | Volume 28).’
The report 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 Devaluation of the Naira was triggered by the Central Bank of Nigeria’s (CBN) decision to remove Trading restrictions on the Official Market.
Similarly, the Angolan kwanza’s Depreciation was Influenced by the Central Bank’s choice to stop defending the Currency due to low Oil prices and Increased Debt Payments.
The World Bank’s report also highlighted other African Currencies with significant losses in 2023, including 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).
Additionally, the report noted that parallel Exchange Market rates are compounding Inflationary challenges for several Countries in the African region.
In June 2023, the Central Bank of Nigeria (CBN) directed Deposit Money Banks to remove the rate cap on the Naira at the Official Investors and Exporters’ window of the Foreign Exchange market.
This move allowed the Naira to freely Float against the Dollar and other Global Currencies.
Since then, the Naira’s official Exchange rate has declined from N473.83/$ to approximately N800/$.
