Local currency lost 2.6% at its worst point between March and June, while Ghana’s cedi fell 10%…..
The naira has emerged as one of Africa’s more resilient currencies this year, weathering a period of intense exchange rate pressure triggered by geopolitical tensions and rising energy costs, the World Bank has said.
In its October 2026 Africa Economic Update, the bank reported that the naira’s steepest depreciation between March and June stood at 2.6 per cent, placing Nigeria among the countries that recorded relatively smaller currency losses during the period.
The performance stood in contrast to several African currencies. Ghana’s cedi recorded the largest decline among the currencies reviewed, losing as much as 10 per cent, while the currencies of South Africa, Lesotho, Namibia and Eswatini weakened by up to 7.2 per cent.
The Democratic Republic of Congo and Uganda also recorded maximum declines of six per cent and five per cent respectively.
The World Bank assessed exchange rate movements in 22 African countries outside the CFA franc zone, measuring their performance against levels recorded before the escalation of the Middle East conflict.
The naira subsequently recovered part of its losses. By August, Nigeria’s currency had strengthened by 1.9 per cent from its March-to-June low, placing it among the currencies that regained ground after the period of heightened pressure.
Several regional peers recorded weaker recoveries. Ghana’s cedi remained 2.5 per cent below its end-February level in August, while Uganda’s currency was still down 3.1 per cent. South Sudan recorded one of the largest remaining declines at 5.5 per cent.
Overall, only 10 of the 22 currencies monitored by the World Bank remained weaker than their end-February positions by the end of August.
The bank attributed part of the naira’s relative resilience to Nigeria’s position as a major crude oil exporter. It said higher oil prices boosted export earnings and foreign exchange inflows into oil-producing economies such as Nigeria and Angola, helping to cushion some of the pressure on their currencies.
The situation was different for countries heavily dependent on imported energy, where rising fuel and other energy costs added to pressure on their currencies.
Beyond energy prices, the World Bank identified stronger demand for the US dollar, capital outflows from emerging and frontier markets and concerns over the rising cost of servicing dollar-denominated debt as factors behind the currency sell-off across several African markets.
The relatively stronger performance of the naira comes alongside an improved economic outlook for Nigeria, with the World Bank raising its 2026 growth forecast for the country to 4.3 per cent, compared with an estimated 4 per cent expansion in 2025.
The bank expects Nigeria’s economy to expand by 4.4 per cent in both 2027 and 2028, supported by improved macroeconomic stability, stronger investor confidence and a gradual recovery in private investment.
Despite the more positive outlook, the World Bank warned that Nigeria remains exposed to several risks that could undermine the gains recorded so far.
These include tighter global financial conditions, a prolonged conflict in the Middle East, insecurity, climate-related shocks, disruptions to crude oil production and increased government spending ahead of the 2027 elections.
The bank said sustaining economic reforms and building stronger policy buffers would be critical for Nigeria to consolidate its recent gains and withstand potential external and domestic shocks.
