The naira was among the more resilient African currencies in the second quarter of 2026, despite widespread exchange rate pressure triggered by rising geopolitical tensions and higher energy prices, according to the World Bank.
The World Bank, in its October 2026 Africa Economic Update, said the naira’s maximum depreciation between March and June was 2.6 per cent, significantly lower than the losses recorded by several other African currencies during the period.
Ghana’s cedi recorded the sharpest decline among the currencies highlighted, falling by as much as 10 per cent.
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.
The World Bank reviewed exchange rate movements in 22 African countries outside the CFA franc zone, comparing their performance with levels recorded before the escalation of the Middle East conflict.
Nigeria’s currency subsequently recovered some of the ground lost during the period. By August, the naira had appreciated by 1.9 per cent from its March-to-June low, placing it among the currencies that recovered from the heightened pressure.
The recovery was stronger than that recorded by some regional peers. Ghana’s cedi remained 2.5 per cent below its end-February level by August, while Uganda’s currency was still down 3.1 per cent. South Sudan recorded one of the largest remaining declines at 5.5 per cent.
According to the World Bank, only 10 of the 22 currencies tracked remained weaker than their end-February positions by the end of August.
The bank attributed part of the naira’s relative resilience to Nigeria’s position as a major crude oil exporter.
It said rising oil prices boosted export earnings and foreign exchange inflows for oil-producing economies such as Nigeria and Angola, helping to cushion some of the pressure on their currencies.
In contrast, higher energy costs placed greater pressure on countries heavily dependent 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.
The relative resilience of the naira comes as the World Bank projects stronger economic growth for Nigeria.
The bank raised its 2026 growth forecast for Nigeria to 4.3 per cent, up 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 Nigeria’s economic outlook remains vulnerable to 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.