In a report by the global bank titled “Africa’s Pulse: An Analysis of Issues Shaping Africa’s Economic Future (October 2023 | Volume 28)”, the World Bank listed the Nigerian naira as one of the worst-performing currencies in Africa.
According to the report, since it was devalued in June, the naira has lost roughly 40% of its value versus the US dollar. The Central Bank of Nigeria’s decision to lift trading restrictions on the official market has caused the naira to depreciate.
Recall that the Central Bank of Nigeria instructed Deposit Money Banks to eliminate the rate cap on the Naira at the authorised Investors and Exporters’ window of the foreign currency market and to let the Naira’s free float against the dollar and other major world currencies in June 2023. Since that time, the official rate of the naira has dropped from N473.83/$1 to about N800/$1.
In addition, the World Bank report also included several African countries that have experienced large losses thus far in 2023. They include Angola with nearly 40%, South Sudan (33%), Burundi (27%), the Democratic Republic of the Congo (18%), Kenya (16%), Zambia (12%), Ghana (12%), and Rwanda (11%).
The World Bank also noted that for several African nations, parallel exchange market rates are exacerbating their inflationary issues.