World Bank: Naira Beats Several African Currencies in Q2 2026

The naira was one of Africa’s more resilient currencies in the second quarter of 2026, the World Bank has said, even as geopolitical tensions and higher energy prices pressured exchange rates across the continent.

In its October 2026 Africa Economic Update, the World Bank found that the naira’s maximum depreciation between March and June was 2.6 per cent. That was smaller than losses recorded by several other African currencies.

How African currencies performed

Ghana’s cedi suffered the sharpest decline among the currencies highlighted, losing as much as 10 per cent during the period. The currencies of 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.

The World Bank reviewed exchange rate movements in 22 African countries outside the CFA franc zone. It compared their performance with levels recorded before the escalation of the Middle East conflict.

Nigeria’s currency later regained some ground. By August, the naira had improved by 1.9 per cent from its March-to-June lows, putting it among the currencies that recovered from the period of heightened pressure.

That recovery was stronger than several regional peers. Ghana’s cedi remained 2.5 per cent below its end-February level by August. Uganda’s currency was still down 3.1 per cent. South Sudan recorded one of the largest remaining declines, at 5.5 per cent. Only 10 of the 22 currencies tracked remained weaker than their end-February positions by the end of August.

Oil exports cushion the naira

Nigeria’s position as a major crude oil exporter helped limit the pressure on the naira, according to the World Bank. The rise in oil prices increased export earnings and foreign exchange inflows for oil-producing economies such as Nigeria and Angola. That helped offset some of the bigger pressure on their currencies.

By contrast, higher energy costs placed greater pressure on countries that depend heavily on imported fuel and other energy products.

The World Bank said the currency sell-off across several African markets was also driven by stronger demand for US dollars, capital outflows from emerging and frontier markets and concerns over the rising cost of servicing dollar-denominated debt.

Growth outlook and risks

The relative resilience of the naira comes as the World Bank sees stronger economic growth for Nigeria. The bank raised its 2026 growth forecast for Nigeria to 4.3 per cent, from an estimated 4 per cent expansion in 2025. It expects the economy to grow by 4.4 per cent in both 2027 and 2028.

The World Bank linked the improved outlook to greater macroeconomic stability, stronger investor confidence and a gradual recovery in private investment.

However, it warned that the outlook remains vulnerable to several risks. These include tighter global financial conditions, a prolonged Middle East conflict, insecurity, climate-related shocks, disruptions to crude oil production and increased government spending ahead of the 2027 elections. The bank said Nigeria would need to sustain its economic reforms and build stronger policy buffers to protect the gains made so far.

What it means

For Nigerian businesses and consumers, the naira’s relative stability matters because it shapes import costs and inflation. The World Bank’s warning that risks remain means the gains are not guaranteed.