Market News

• Naira recorded maximum 2.6% depreciation between March and June 2026

• Ghana’s cedi and several other African currencies suffered steeper losses

• World Bank says higher oil prices helped support Nigeria’s foreign exchange inflows

The naira was among the more resilient African currencies during the second quarter of 2026, despite pressure from geopolitical tensions and higher energy prices, according to the World Bank.

The finding was contained in the World Bank’s October 2026 Africa Economic Update, which assessed exchange-rate movements across 22 African countries outside the CFA franc zone.

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The report showed that the naira’s maximum depreciation between March and June was 2.6 per cent, significantly lower than the losses recorded by several other currencies during the period.

Ghana’s cedi recorded the sharpest decline among the currencies highlighted, losing as much as 10 per cent. Currencies in South Africa, Lesotho, Namibia and Eswatini fell by up to 7.2 per cent, while the Democratic Republic of Congo and Uganda recorded maximum declines of 6 per cent and 5 per cent respectively.

The naira subsequently recovered some of its losses. By August, Nigeria’s currency had strengthened by 1.9 per cent from its March-to-June low, placing it among currencies that regained ground after the period of heightened pressure.

The World Bank attributed part of the naira’s relative resilience to Nigeria’s position as a major crude oil exporter. It said higher oil prices boosted export earnings and foreign exchange inflows for oil-producing economies, including Nigeria and Angola.

The lender noted that other African economies faced greater pressure because of their dependence on imported energy products.

The currency pressures recorded across the continent were also linked to stronger demand for the US dollar, capital outflows from emerging and frontier markets and concerns over the cost of servicing dollar-denominated debt.

The World Bank also raised its forecast for Nigeria’s economic growth to 4.3 per cent in 2026, from an estimated 4.0 per cent in 2025. It projected 4.4 per cent growth for both 2027 and 2028, citing improving macroeconomic stability, stronger investor confidence and a gradual recovery in private investment.

However, the bank warned that Nigeria’s outlook remains exposed to risks, including tighter global financial conditions, insecurity, climate shocks, disruptions to crude oil production and increased government spending ahead of the 2027 elections.

It said sustaining economic reforms and building stronger policy buffers would be important to preserving the gains recorded so far.