W’Bank: Naira Proves More Resilient Than Several African Currencies

The naira was among the more resilient African currencies during the second quarter of 2026, despite widespread exchange-rate pressures linked to geopolitical tensions and higher energy prices, the World Bank has said.

According to the World Bank’s October 2026 Africa Economic Update, the naira’s maximum depreciation between March and June was 2.6 per cent, significantly lower than the losses recorded by several other African currencies.

Ghana’s cedi recorded the sharpest decline among the currencies highlighted, weakening by almost 10 per cent during the period. The currencies of Lesotho, Namibia, South Africa and Eswatini fell by roughly 7.2 per cent, while the Democratic Republic of Congo and Uganda recorded maximum declines of about six and five per cent respectively.

The World Bank reviewed exchange-rate movements in 22 African countries outside the CFA franc zone, comparing their performance with levels recorded before the escalation of the Middle East conflict.

The naira subsequently recovered some of its losses. By August, it had strengthened by 1.9 per cent from its March-to-June low, placing it among the currencies that had recovered from the period of heightened pressure.

By comparison, Ghana’s cedi remained 2.5 per cent below its end-February level by August, while Uganda’s currency was still down 3.1 per cent. South Sudan recorded a remaining decline of 5.5 per cent.

The World Bank attributed part of the naira’s relative resilience to Nigeria’s position as a major crude oil exporter. Higher oil prices increased export earnings and foreign exchange inflows for oil-producing economies such as Nigeria and Angola, helping to cushion currency pressures.

The bank said the broader sell-off across African currencies was also driven by stronger demand for US dollars, capital outflows from emerging and frontier markets and concerns over the rising cost of servicing dollar-denominated debt.

The World Bank has also raised its forecast for Nigeria’s economic growth to 4.3 per cent in 2026, up from an estimated four per cent expansion in 2025. It projects growth of 4.4 per cent in both 2027 and 2028.

However, the bank warned that Nigeria remains exposed to risks including prolonged geopolitical tensions, insecurity, climate-related shocks, disruptions to crude oil production and increased government spending ahead of the 2027 elections.

It said sustaining economic reforms and strengthening policy buffers would be important to protecting the recent gains.