Major issues mentioned in the research were Nigeria’s Central Bank’s delayed foreign exchange disbursements, restricted dollar inflows, and rising demand for US dollars.

As of August 2024, the naira, which is the national currency of Nigeria, has lost around 43% of its value, ranking it among the worst-performing currencies in Sub-Saharan Africa.

The South Sudanese pound, Ethiopian birr, and Nigerian naira were the three weakest currencies in the area, according to the World Bank’s Africa Pulse report.

Major issues mentioned in the research were Nigeria’s Central Bank’s delayed foreign exchange disbursements, restricted dollar inflows, and rising demand for US dollars.

The South Sudanese pound, Nigerian naira, and Ethiopian birr were among the poorest performing currencies in the area by August 2024.

“As of the end of August, the value of the Nigerian naira had depreciated by approximately 43% year to date.”

The Nigerian currency persisted in its difficulties in spite of changes made to the foreign exchange market, such as the opening up of the official exchange rate.

According to the report, “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.”

Nigeria’s inflation reached a peak of 34.2% in June 2024, but by August, it had dropped to 32.2%. The burden on Nigerian consumers has increased due to the depreciation of the naira, particularly for imported items.

Conversely, certain currencies have begun to show signs of life, such as the Kenyan shilling, which by August had increased by 21% year to date. Still, there are pressures on currency rates and shortages of foreign exchange in several African economies, including Nigeria.

Nigeria’s GDP is expected to increase by 3.3% in 2024, with a modest acceleration to 3.6% in 2025–2026, according to World Bank projections. “As macroeconomic and fiscal reforms progressively start generating benefits, economic growth in Nigeria is estimated at 3.3 percent in 2024 and 3.6 percent in 2025–2026,” the paper said.

Furthermore, Nigeria’s inflation is still a worry, particularly in light of the government’s decision to end gasoline subsidies in the middle of 2023, which led to a spike in petrol prices and accompanying inflationary consequences.

According to the analysis, gasoline prices are expected to rise by an additional 40–45% by September 2024, which would result in higher transportation and logistics expenses.