The World Bank says Nigeria’s Naira is among the worst performing currencies in Africa. The Nigerian currency is ranked among floundering currencies in the continent, others include the Angola and Sierra Leone currencies, the Bretton Wood US based global financial institution said.
The bank statement is coming on the heels of a remark by Yemi Cardoso, Nigeria’s Central Bank Governor, that a weak naira is good for the economy.
The currency is experiencing its worst performance in years, as it’s not exchanged for N1, 650 to the dollar.
The CBN governor made this known on Wednesday during the Nigerian Economic Summit, NES, in Abuja, the nation’s capital.
Cardoso explained that a weak naira will strengthens Nigeria’s export, stressing that Nigerians should take advantage of the moment.
The World bank revealed this in it latest Africa’s Pulse report, noting that the naira has lost as much as 43 percent in its value in the last one year, with no end in site to recovery.
According to the global financial institution, the naira woes has been worsened due to the high demand for the US dollars mostly at the parallel foreign exchange market.
The bank said, “By August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region. The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 per cent as of August.
“Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank, explain the weakening of the naira.”
The magazine reported that Cardoso, had earlier in February claimed that the naira was undervalued, promising to ensure that the currency regained its actual value among other major currencies.
He blamed the continued devaluation of the currency on manipulation and distortion in the forex market, which he promised to fix.
“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate,” he said.
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