Nigeria’s national currency, the Naira has been listed among the worst-performing currencies in Sub-Saharan Africa in 2024.
According to the latest edition of Africa’s Pulse, a new report by the World Bank, as of the end of August 2024, the naira had depreciated by approximately 43 per cent year-to-date, making it one of the region’s weakest currencies alongside the Ethiopian birr and South Sudanese pound.
The depreciation of the naira is attributed to several factors, including surging demand for United States dollars in the parallel market, limited dollar inflows, and delays in foreign exchange disbursements by the Central Bank of Nigeria.
The World Bank’s report also noted that the demand for dollars, driven by financial institutions, non-financial end-users, and money managers, has exacerbated the pressure on the naira.
“By August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region. The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 per cent as of end-August.
“Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira,” the report by Punch newspaper quoted the World Bank report as saying.
It added that the situation has persisted despite some foreign exchange market reforms introduced by the Nigerian government, including the liberalization of the official exchange rate that began in June 2023 and in October this year, the naira exchanges for N1603 to $1.
GIK/APA
