The naira was among the more resilient African currencies during the second quarter of 2026, despite a wave of exchange rate pressure caused by rising geopolitical tensions and higher energy prices, the World Bank has said.
The World Bank’s October 2026 “Africa Economic Update” found that the naira’s maximum depreciation between March and June was 2.6 per cent, significantly smaller than the losses recorded by several other African currencies.
Ghana’s cedi suffered the sharpest decline among the currencies highlighted, losing as much as 10 per cent during the period.
The currencies of South Africa, Lesotho, Namibia and Eswatini fell by up to 7.2 per cent, while the Democratic Republic of Congo and Uganda recorded maximum declines of 6 per cent and 5 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.
Nigeria’s currency subsequently regained some ground. By August, the naira had improved by 1.9 per cent from its March-to-June lows, putting it among the currencies that recovered from the period of heightened pressure.
The recovery was stronger than that recorded by several regional peers. 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 one of the largest remaining declines, at 5.5 per cent.
The World Bank said only 10 of the 22 currencies tracked remained weaker than their end-February positions by the end of August.
Nigeria’s position as a major crude oil exporter helped limit the pressure on the naira, according to the World Bank.
The rise in oil prices increased export earnings and foreign exchange inflows for oil-producing economies such as Nigeria and Angola, helping to offset some of the bigger pressure on their currencies.
By contrast, higher energy costs placed greater pressure on countries that depend heavily on imported fuel and other energy products.
The World Bank said the currency sell-off across several African markets 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 relative resilience of the naira comes as the World Bank sees stronger economic growth for Nigeria.
The bank raised its 2026 growth forecast for Nigeria to 4.3 per cent, from an estimated 4 per cent expansion in 2025.
It expects the economy to grow by 4.4 per cent in both 2027 and 2028.
The World Bank linked the improved outlook to greater macroeconomic stability, stronger investor confidence and a gradual recovery in private investment.
However, it warned that the outlook remains vulnerable to several risks.
These include tighter global financial conditions, a prolonged Middle East conflict, insecurity, climate-related shocks, disruptions to crude oil production and increased government spending ahead of the 2027 elections.
The bank said Nigeria would need to sustain its economic reforms and build stronger policy buffers to protect the gains made so far.
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