Naira Outperforms Several African Currencies as World Bank Highlights Resilience

Nigeria’s naira has emerged as one of Africa’s more resilient currencies in the second quarter of 2026, despite widespread foreign-exchange pressure triggered by geopolitical tensions, higher energy prices and stronger demand for the US dollar.

The World Bank, in its October 2026 Africa Economic Update, said the naira recorded a maximum depreciation of just 2.6 per cent between March and June, significantly better than several other major African currencies.

Naira Records Smaller Decline

The performance placed the naira among the better-performing currencies in the 22 African countries reviewed by the World Bank outside the CFA franc zone.

Ghana’s cedi recorded the sharpest decline among the currencies highlighted, falling by as much as 10 per cent during the period.

Currencies in South Africa, Lesotho, Namibia and Eswatini depreciated 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.

Nigeria’s currency subsequently regained some of its lost ground. By August, the naira had recovered 1.9 per cent from its March-to-June low, putting it ahead of several regional peers that remained weaker than their end-February positions.

Oil Revenue Supports the Naira

The World Bank attributed part of Nigeria’s relative currency resilience to its 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 cushion against the pressure affecting their currencies.

Countries heavily dependent on imported energy, however, faced greater pressure as rising energy costs increased their foreign-exchange requirements.

Across African markets, the currency sell-off was also driven by increased demand for US dollars, capital outflows from emerging and frontier markets and concerns about the cost of servicing dollar-denominated debt.

Only 10 of 22 Currencies Remained Weaker

The naira’s recovery stood out against several regional currencies.

By the end of August, only 10 of the 22 currencies tracked by the World Bank remained weaker than their end-February levels.

Ghana’s cedi was still 2.5 per cent below its end-February position, while Uganda’s currency was down 3.1 per cent. South Sudan recorded a 5.5 per cent decline.

The figures suggest that although African currencies were broadly exposed to the same external shocks, countries with stronger external buffers and export earnings were better positioned to withstand the pressure.

World Bank Raises Nigeria’s Growth Outlook

The improved currency performance comes alongside a more positive outlook for Nigeria’s economy.

The World Bank raised its 2026 growth forecast for Nigeria to 4.3 per cent, up from an estimated 4 per cent growth in 2025. It expects the economy to expand by 4.4 per cent in both 2027 and 2028.

The bank linked the stronger outlook to improving macroeconomic stability, recovering investor confidence and a gradual revival in private investment.

However, the institution warned that Nigeria remains vulnerable to tighter global financial conditions, prolonged geopolitical tensions, disruptions to crude oil production, insecurity, climate-related shocks and increased government spending ahead of the 2027 elections.

Resilience Still Depends on Reforms

The World Bank’s assessment provides a positive signal for Nigeria’s ongoing foreign-exchange reforms, but it also highlights the need to sustain the policies supporting currency stability.

Recent improvements in Nigeria’s external position have included stronger foreign-exchange inflows and higher reserves. Gross external reserves stood at $54.61bn as of September 14, 2026, according to CBN data, up significantly from the previous year.

For businesses and investors, sustained naira stability could improve confidence, reduce exchange-rate uncertainty and make financial planning more predictable.

However, maintaining those gains will depend on continued reforms, stronger foreign-exchange buffers and Nigeria’s ability to protect oil production while expanding non-oil sources of foreign currency.

The World Bank’s latest assessment therefore marks a notable shift in the naira’s recent story: from a currency under severe pressure to one demonstrating greater resilience amid another period of global and regional volatility.