According to the World Bank’s Africa’s Pulse report, the Nigerian naira has depreciated by approximately 43% as of August 2024, ranking it among the weakest currencies in Sub-Saharan Africa.
Key Factors Contributing to Naira’s Decline:
1. Surging demand for US dollars in Nigeria’s parallel market
2. Limited dollar inflows
3. Slow foreign exchange disbursements by the central bank
4. Increased demand from financial institutions, non-financial end-users, and money managers
Impact on Nigeria’s Economy:
1. Higher domestic prices for imported goods
2. Worsening conditions for Nigerian consumers
3. Inflationary pressures
4. Limited foreign reserves
Recent Developments:
1. Naira appreciates by 5.69% against the dollar on October 14
2. Foreign exchange turnover drops by 44.27% in the same period
World Bank Projections:
1. Nigeria’s economy to grow by 3.3% in 2024
2. Slight acceleration to 3.6% between 2025 and 2026
3. Inflation remains a concern, particularly after fuel subsidy removal
Source: Vanguard News, World Bank’s Africa’s Pulse report.
