Naira Among Africa’s Most Resilient Currencies – World Bank

The naira was among Africa’s most resilient currencies in the second quarter of 2026, recording a maximum depreciation of just 2.6% despite widespread foreign exchange pressures across the continent, according to the World Bank.

In its October 2026 Africa Economic Update, the bank assessed exchange rate movements across 22 African countries outside the CFA franc zone, attributing the pressure on currencies to higher energy prices, geopolitical uncertainty, capital outflows and increased demand for the US dollar.

However, the impact varied across countries, depending on their external positions, export earnings and exposure to global economic shocks.

Naira among Africa’s resilient currencies

The World Bank said most of the currencies monitored depreciated in the second quarter relative to their end-February levels, following heightened geopolitical tensions and rising energy prices.

“The escalation of the conflict in the Middle East initially exerted broad-based pressure on African currencies,” the report said.

Seven of the 22 currencies recorded maximum depreciation exceeding 5%, including those of the Democratic Republic of Congo, Ghana, Seychelles and South Africa.

Ghana’s cedi recorded a decline of as much as 10%, while currencies in South Africa, Lesotho, Namibia and Eswatini depreciated by up to 7.2%. The Democratic Republic of Congo and Uganda recorded maximum declines of 6% and 5%, respectively.

The naira subsequently recovered 1.9% from its March-to-June low by August, placing it among the currencies that regained ground after the period of heightened market pressure.

Naira strengthens from March weakness

Data from the Nigerian Foreign Exchange Market (NFEM) show that the naira weakened to N1,425/$ on March 9, 2026, before recovering in the following months.

The currency closed at N1,390.50/$ on March 10 and N1,387/$ on March 31, with the recovery continuing through the second and third quarters.

By August 3, the naira had strengthened to N1,365/$ and closed at N1,360.15/$ on August 12. It subsequently reached N1,349.99/$ on August 24 before ending the month at N1,335.50/$.

The currency continued to strengthen in September, closing at N1,329/$ on September 1 and reaching N1,320/$ on September 7. It ended September at N1,329.50/$.

On October 7, the naira closed at N1,332.75/$, representing an appreciation of approximately 6.5% from its March 9 closing level of N1,425/$.

This longer-term movement illustrates the naira’s recovery in the supplied daily exchange-rate data, although it covers a different period from the World Bank’s second-quarter depreciation measure.

Oil exports help cushion currency pressure

The World Bank said differences in countries’ export structures and external financial positions played a significant role in determining how their currencies responded to global economic shocks.

Nigeria’s position as a major crude oil exporter provided some protection against external pressure, as higher oil prices supported export earnings and foreign exchange inflows.

Angola also benefited from increased crude oil prices, while South Africa gained from stronger demand for gold and platinum, according to the report.

By contrast, energy-importing countries faced higher import bills as oil and other energy prices increased, putting additional pressure on demand for US dollars.

The report also identified limited foreign exchange buffers and high debt-service obligations as factors that intensified pressure on some African currencies.

Capital outflows and the reallocation of investments away from emerging and frontier markets further contributed to depreciation pressures amid geopolitical uncertainty.

Higher fertiliser prices and other agricultural input costs also added to imported inflation.

The World Bank warned that currency depreciation could increase fiscal vulnerabilities in countries with substantial dollar-denominated debt because governments would need more local currency to service their external obligations.

Naira rebounds as growth outlook improves

By August, the naira had recovered part of its earlier losses, while several other African currencies remained weaker than their end-February positions.

The cedi remained 2.5% weaker than its end-February level, while Uganda’s currency was down 3.1%. South Sudan recorded one of the largest remaining declines, at 5.5%.

Only 10 of the 22 currencies tracked by the World Bank remained weaker than their end-February positions by the end of August.

Nigeria and Angola were among the economies where stronger crude oil receipts helped cushion exchange rate pressures.

The bank said the performance of African currencies reflected a combination of external shocks and existing domestic vulnerabilities, rather than a uniform regional trend.

The naira’s relative resilience also coincides with an improved economic growth outlook for Nigeria.

Nairametrics reported that the World Bank raised Nigeria’s 2026 economic growth forecast to 4.3%, up from 4.0% in 2025, and projected annual growth of 4.4% in both 2027 and 2028.

The currency’s performance highlights the role of export earnings in cushioning external shocks, although sustained stability will also depend on broader economic conditions and the country’s ability to maintain foreign exchange inflows.

Source: Nairametrics