A recent World Bank report reveals that Nigeria’s naira is among the worst-performing currencies globally in 2024. By August, the naira had depreciated by approximately 43% year-to-date, ranking alongside the Ethiopian birr and South Sudanese pound. This sharp decline stems from an intense demand for U.S. dollars in Nigeria’s parallel market, a limited inflow of dollars, and delayed foreign exchange disbursements by the Central Bank of Nigeria (CBN). Despite government efforts, such as liberalizing the official exchange rate in June 2023, the measures have not stabilized the naira effectively.
The currency’s depreciation has exacerbated the cost of living in Nigeria, particularly impacting the prices of imported goods. Inflation, worsened by the removal of fuel subsidies, has tripled gasoline prices and increased transportation and logistics costs, further straining Nigerian households.
While the naira saw a brief recovery in mid-October, appreciating by 5.69% against the dollar, challenges like dwindling foreign reserves and inflationary pressures persist. The World Bank projects modest economic growth for Nigeria, forecasting a 3.3% growth rate in 2024, potentially increasing to 3.6% by 2026 if economic reforms take hold.