The Nigerian naira recorded a relatively moderate decline compared with several African currencies during the second quarter of 2026, according to the World Bank, as geopolitical tensions, higher energy prices and strong demand for the US dollar put pressure on currencies across the continent.
Key Highlights
- Naira depreciated by a maximum of 2.6 per cent between March and June 2026.
- Ghana’s cedi recorded a sharper decline of up to 10 per cent during the period.
- Currencies in South Africa, Lesotho, Namibia and Eswatini weakened by up to 7.2 per cent.
- The naira recovered 1.9 per cent from its March-to-June low by August.
- The World Bank linked the naira’s resilience partly to Nigeria’s crude oil exports.
- The bank raised Nigeria’s 2026 economic growth forecast to 4.3 per cent.
- Nigeria’s economy is projected to grow by 4.4 per cent in both 2027 and 2028.
Naira Outperforms Several African Currencies
The findings were contained in the World Bank’s October 2026 Africa Economic Update, which examined exchange rate movements across 22 African countries outside the CFA franc zone.
According to the report, the naira’s maximum depreciation between March and June stood at 2.6 per cent, placing it among the currencies that recorded relatively moderate losses during the period.
Ghana’s cedi was among the worst performers, losing as much as 10 per cent, while currencies in South Africa, Lesotho, Namibia and Eswatini weakened by up to 7.2 per cent.
The Democratic Republic of Congo recorded a maximum decline of 6 per cent, while Uganda’s currency fell by as much as 5 per cent.
Naira Recovers Ground by August
The World Bank said the naira subsequently recovered part of the losses recorded during the period of heightened currency pressure.
By August, Nigeria’s currency had strengthened by 1.9 per cent from its March-to-June low.
In comparison, Ghana’s cedi remained 2.5 per cent below its end-February level, while Uganda’s currency was still down 3.1 per cent.
South Sudan recorded a 5.5 per cent decline over the same comparison period.
The World Bank said only 10 of the 22 currencies monitored remained weaker than their end-February positions by the end of August.
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Oil Exports Support Naira
The World Bank attributed part of the naira’s resilience to Nigeria’s position as a major crude oil exporter.
The bank said stronger oil prices supported export earnings and foreign exchange inflows for oil-producing countries such as Nigeria and Angola, helping to cushion some of the pressure on their currencies.
However, countries that depend heavily on imported energy faced additional pressure as higher energy costs increased their foreign exchange requirements.
The World Bank also identified stronger demand for the US dollar, capital outflows from emerging and frontier markets, and concerns over servicing dollar-denominated debt as major factors behind the currency pressures across African markets.
World Bank Raises Nigeria’s 2026 Growth Forecast
Meanwhile, the World Bank has raised its projection for Nigeria’s economic growth in 2026 to 4.3 per cent, up from an estimated 4 per cent expansion in 2025.
The bank expects Nigeria’s economy to grow by 4.4 per cent in both 2027 and 2028, citing improving macroeconomic stability, increased investor confidence and a gradual recovery in private investment.
The revised outlook comes amid ongoing economic reforms and efforts to strengthen Nigeria’s macroeconomic fundamentals.
World Bank Warns of Risks to Nigeria’s Economy
Despite the improved growth outlook, the World Bank warned that Nigeria remains exposed to several risks that could affect economic performance.
These include tighter global financial conditions, prolonged geopolitical tensions, insecurity, climate-related shocks and disruptions to crude oil production.
The bank also identified increased government spending ahead of the 2027 elections as a potential risk to Nigeria’s economic outlook.
It advised the Nigerian government to sustain its ongoing economic reforms and strengthen policy buffers to protect the gains recorded so far.
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