Naira Beats Most African Currencies With 2.6% Q2 Depreciation, World Bank Says

The naira was among the more resilient African currencies in the second quarter of 2026, losing a maximum of 2.6 per cent between March and June, according to the World Bank. The figure is far below the losses recorded by several peer currencies over the same period, the bank said in its October 2026 Africa Economic Update.

The report assessed exchange-rate movements across 22 African countries outside the CFA franc zone. It found that Ghana's cedi posted the sharpest decline, shedding as much as 10 per cent. Currencies in South Africa, Lesotho, Namibia and Eswatini fell by up to 7.2 per cent. The Democratic Republic of Congo and Uganda recorded maximum declines of 6 per cent and 5 per cent respectively.

Oil earnings cushion the naira

The World Bank tied part of the naira's relative stability to Nigeria's position as a major crude oil exporter. Higher oil prices lifted export earnings and foreign exchange inflows for oil-producing economies, including Nigeria and Angola. Other African economies faced stiffer pressure because of their dependence on imported energy products.

The wider currency pressure across the continent was also linked to stronger demand for the US dollar, capital outflows from emerging and frontier markets, and worries over the cost of servicing dollar-denominated debt. Geopolitical tensions and higher energy prices added to the strain during the quarter.

Nigeria's currency later recovered part of its losses. By August, the naira had strengthened by 1.9 per cent from its March to June low, putting it among the currencies that regained ground after the period of heightened pressure.

Growth forecast raised to 4.3%

The World Bank raised its forecast for Nigeria's economic growth to 4.3 per cent in 2026, up from an estimated 4.0 per cent in 2025. It projected 4.4 per cent growth for both 2027 and 2028. The bank cited improving macroeconomic stability, stronger investor confidence and a gradual recovery in private investment.

Still, the lender warned that the outlook remains exposed to risks. These include tighter global financial conditions, insecurity, climate shocks, disruptions to crude oil production and increased government spending ahead of the 2027 elections. It said sustaining economic reforms and building stronger policy buffers would be important to preserving the gains recorded so far.

What it means for the naira

A milder depreciation against peers does not mean the naira escaped pressure in the period. It means the fall was smaller than what Ghana, South Africa, Uganda and others absorbed. For Nigerian importers and businesses pricing dollar goods, the 2.6 per cent slide still fed into costs. The 1.9 per cent August rebound offers some relief, but the World Bank's risk list, from oil production disruptions to pre-election spending, suggests the currency's calm will depend on how those pressures play out.