By Becky Usman

According to the World Bank’s recent report, the Nigerian naira has depreciated by nearly 40% against the US dollar since a mid-June devaluation, making it one of the worst-performing currencies in Africa. The decline was attributed to the central bank’s decision to remove trading restrictions on the official market, allowing the naira to free float against global currencies. The report also highlighted the widening gap between parallel and official exchange rates, leading to inflationary challenges in the country. Additionally, Nigeria’s growth rate is expected to decelerate from 3.3% in 2022 to 2.9% in 2023 due to factors such as low oil production and policy actions like the removal of fuel subsidies and exchange rate unification. The World Bank emphasized that while these measures aim to enhance fiscal and external accounts, they may temporarily impact household purchasing power and economic activity.