Despite the Nigerian government’s efforts to implement tough financial reforms, the Nigerian Naira has emerged as the worst-performing African currency in the past three months and is absent from the list of the top ten foreign currencies in the market.
A global currency ranking report titled “Highest and Strongest Currencies in Africa” by Clacified.com has revealed this trend. The report attributes Africa’s exclusion from the list of global currencies to the continent’s status as home to some of the world’s ten most underdeveloped and developing countries. Despite Nigeria having Africa’s largest economy and the highest nominal GDP, its currency has faced significant challenges.
The report highlights that several African countries have stronger currencies than the Naira, including the Tunisian Dinar, Libyan Dinar, Moroccan Dirham, Ghanaian Cedi, Botswana Pula, and Seychellois Rupee, among others. Nigeria is conspicuously missing from the list.
The Nigerian government has taken steps to revamp the economy, including eliminating fuel subsidies and increasing investment in education, agriculture, and job creation. Monetary policy reforms have also been promised.
However, the Naira’s performance has been volatile. The Central Bank of Nigeria (CBN) announced the unification of foreign exchange (FX) windows in June 2023, leading to a significant devaluation of the Naira. Currently, it stands at N762.71/$1 at the official CBN rate and N920/$1 in the parallel market.
Economic experts have differing opinions on whether the Naira is truly the worst-performing currency in Africa. They suggest that the Nigerian government needs to accelerate productivity within the country to reduce the scarcity of foreign exchange. Vandalism in the oil sector has led to a significant reduction in oil exports, resulting in a scarcity of foreign exchange. Experts recommend stopping the patronage of foreign goods and tapping into Nigeria’s vast mineral resources to boost foreign exchange earnings.
This report reflects the challenges faced by the Nigerian Naira in recent times, including foreign exchange instability and devaluation. Economic experts emphasize the importance of improving domestic productivity to address these issues and strengthen the Naira’s performance in the long run.
