{"id":96933,"date":"2023-10-05T11:09:51","date_gmt":"2023-10-05T10:09:51","guid":{"rendered":"https:\/\/www.africa-press.net\/nigeria\/uncategorized\/naira-among-worst-performing-currencies-in-africa-world-bank"},"modified":"2023-10-05T13:45:31","modified_gmt":"2023-10-05T12:45:31","slug":"naira-among-worst-performing-currencies-in-africa-world-bank","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/nigeria\/economy\/naira-among-worst-performing-currencies-in-africa-world-bank","title":{"rendered":"Naira among worst-performing currencies in Africa \u2013 World Bank"},"content":{"rendered":"

Africa-Press – Nigeria. <\/strong><\/span>The World Bank has described the Nigerian naira as one of the worst-performing currencies in Africa.<\/p>\n

The currency, according to the report, weakened by nearly 40 per cent against the US dollar since a mid-June devaluation.<\/p>\n

In a report by the global bank titled, \u2018Africa\u2019s Pulse: An analysis of issues shaping Africa\u2019s economic future (October 2023 | Volume 28),\u2019 it stated that so far this year, the Nigerian naira and the Angolan kwanza are among the worst performing currencies in the region, saying that the currencies have posted a year-to-date depreciation of nearly 40 per cent.<\/p>\n

According to the report, \u201cThe weakening of the naira was triggered by the central bank\u2019s decision to remove trading restrictions on the official market.<\/p>\n

\u201cFor the kwanza, it was the decision of the central bank to stop defending the currency as a result of low oil prices and greater debt payments.\u201d<\/p>\n

Other currencies, according to the World Bank report with significant losses so far in 2023, included South Sudan (33 per cent), Burundi (27 per cent), the Democratic Republic of Congo (18 per cent), Kenya (16 per cent), Zambia (12 per cent), Ghana (12 per cent), and Rwanda (11 per cent).<\/p>\n

The report explained that the Central Bank of Nigeria in June 2023, directed Deposit Money Banks to remove the rate cap on the naira at the official Investors and Exporters\u2019 window of the foreign exchange market, and allow the free float of the naira against the dollar and other global currencies.<\/p>\n

Since then, the naira has fallen from N473.83\/$ to around N800\/$ officially, the report said.<\/p>\n

The bank stated that this had been the case from March 2020 until June 2023 with the widening difference between the parallel and official exchange rates of the naira.<\/p>\n

The report stated that the Central Bank\u2019s interventions to restrict foreign exchange demand and keep the exchange rate artificially low were met with declining FX supply from oil revenues, stressing that the parallel rate premium increased to 80 per cent in November 2022, and then to about 60 per cent in June 2023.<\/p>\n

It added that the unification and liberalisation of the exchange rates in June 2023 allowed the NAFEX rate to converge to the parallel one, closing the gap, saying that the resistance toward the increasing pressure on the Nigerian naira coupled with limited supply of FX at the official window has led to the reemergence of the parallel market premium.<\/p>\n

The Washington-based bank highlighted that the Nigeria\u2019s growth rate would decelerate from 3.3 per cent in 2022 to 2.9 per cent in 2023<\/p>\n

The country\u2019s oil production, according to the report, had remained below OPEC quota amid capacity issues and lower international oil prices and while non-oil economic activity, particularly industry and services still supported growth, policy actions to remove fuel subsidies and unify the exchange rates might be weighing on those activities in the short term.<\/p>\n

It noted that the weak business confidence and rising input costs are driving the contraction of activity as business confidence appears to have weakened in Nigeria.<\/p>\n

The World Bank noted that activity in Nigeria\u2019s manufacturing and services\u2019 sector contracted in August.<\/p>\n

The global bank disclosed that purchasing power of households was expected to suffer in the short term following the recent reforms of the new administration of Bola Tinubu.<\/p>\n

It stated that the incoming Tinubu administration implemented a series of reforms that included the removal of fuel subsidy and the devaluation and unification of the exchange rate system, stressing that petroleum prices have more than tripled since the subsidies were lifted at the end of May.<\/p>\n

It said that the naira has weakened by nearly 40 per cent against the US dollar since the mid-June devaluation.<\/p>\n

The bank noted that the measures were intended to improve the fiscal and external accounts of the nation but their inflationary effects in the near term can erode the purchasing power of households and weigh on economic activity.<\/p>\n

For More News And Analysis About Nigeria<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Nigeria. The World Bank has described the Nigerian naira as one of the worst-performing currencies in Africa. The currency, according to the report, weakened by nearly 40 per cent against the US dollar since a mid-June devaluation. In a report by the global bank titled, \u2018Africa\u2019s Pulse: An analysis of issues shaping Africa\u2019s […]<\/p>\n","protected":false},"author":84,"featured_media":96932,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[1570,2140,254,580],"class_list":["post-96933","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-nigeria-2","tag-nigeria","tag-world-bank"],"yoast_head":"\nNaira among worst-performing currencies in Africa \u2013 World Bank - Nigeria<\/title>\n<meta name=\"description\" content=\"The World Bank has described the Nigerian naira as one of the worst-performing currencies in Africa. 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