The World Bank has stated that the naira was among the most resilient African currencies during the second quarter of 2026. This assessment was made in the context of heightened exchange-rate pressure triggered by geopolitical tensions, higher energy prices, and stronger demand for the US dollar. According to the World Bank’s October 2026 Africa Economic Update, the naira’s maximum depreciation between March and June was 2.6 percent.
The naira’s performance compared favorably with several other African currencies. Ghana’s cedi recorded the sharpest decline, depreciating by as much as 10 percent. The currencies of South Africa, Lesotho, Namibia, and Eswatini fell by up to 7.2 percent, while the Democratic Republic of Congo and Uganda recorded maximum declines of 6 percent and 5 percent, respectively. These declines were attributed to various factors, including energy prices and foreign exchange demand.
The World Bank reviewed exchange-rate movements across 22 African countries outside the CFA franc zone. The review compared currency performance with levels recorded before the escalation of the Middle East conflict. Nigeria’s currency subsequently recovered some of its losses. By August, the naira had strengthened by 1.9 percent from its March-to-June lows, placing it among the currencies that regained ground after the period of heightened pressure.
The recovery of the naira compared favorably with several regional peers. Ghana’s cedi remained 2.5 percent below its end-February level by August, while Uganda’s currency was still down 3.1 percent. South Sudan recorded one of the largest remaining declines at 5.5 percent. 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 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, providing some support for their currencies. This factor helped shield Nigeria from some of the currency pressures experienced by other African economies.
The World Bank has raised its 2026 growth forecast for Nigeria to 4.3 percent, from an estimated 4 percent expansion in 2025. The bank expects the Nigerian economy to grow by 4.4 percent in both 2027 and 2028, linking the improved outlook to greater macroeconomic stability, stronger investor confidence, and a gradual recovery in private investment. However, the bank cautioned that currency stability and economic growth remain exposed to several risks.
The World Bank stressed the need for Nigeria to sustain its economic reforms and build stronger policy buffers to protect the gains made in macroeconomic stability. For the naira, the latest assessment marks a significant shift from the severe exchange-rate volatility that characterised earlier periods. The bank’s warning underscores that recent resilience will depend on Nigeria’s ability to maintain foreign exchange inflows, strengthen fiscal and monetary buffers, and manage external shocks.
Key points
- The naira’s maximum depreciation between March and June was 2.6 percent.
- Higher oil prices increased export earnings and foreign exchange inflows for oil-producing economies such as Nigeria.
- The World Bank has raised its 2026 growth forecast for Nigeria to 4.3 percent.
