Naira Among Africa’s Worst-Performing Currencies in 2024, Says Agbakoba

Senior Advocate of Nigeria (SAN) Olisa Agbakoba has expressed concern over the steep depreciation of the Nigerian naira, describing the currency’s performance in 2024 as among the worst in Africa.

According to Agbakoba, the naira has lost over 40 percent of its value against major foreign currencies this year, reflecting deeper structural weaknesses in the Nigerian economy.

Speaking during a recent economic forum, Agbakoba emphasized that Nigeria’s foreign exchange challenges are not just about monetary policy or the nominal value of the naira.

“We place the wrong emphasis on the numeric value of the naira to the dollar. We should be concentrating on the productive value of the naira to the dollar,” he said, pointing to the country’s low production capacity as a key driver of the currency’s slide.

Data from financial reports indicate that by mid-2024, the naira had fallen to around N1,503 to the US dollar, representing roughly a 40 percent decline from late 2023. This places Nigeria among the worst-performing currencies in Sub-Saharan Africa alongside the Ethiopian birr and South Sudanese pound.

The rapid decline in the naira’s value has had significant consequences for ordinary Nigerians. Prices of imported goods, including essential commodities, raw materials, and medical supplies, have surged, fuelling inflation and eroding the purchasing power of households.

Analysts also warn that continued weakness in the naira could further destabilize the economy if underlying production and export challenges are not addressed.

Agbakoba and economic analysts point to several factors driving the naira’s slide:
• Limited foreign exchange inflows due to weak export performance and declining oil revenues.
• High demand for US dollars in the parallel market, exacerbating scarcity.
• Structural economic weaknesses, including over-reliance on imports and low domestic production.
• The liberalization and unification of the exchange-rate regime, which exposed the naira to market forces and accelerated depreciation.

Agbakoba warned that managing the naira’s nominal exchange rate alone is insufficient.

He urged policymakers to focus on increasing domestic production, diversifying exports, and strengthening economic fundamentals to stabilize the currency sustainably.

The steep depreciation of the naira not only affects the daily lives of Nigerians but also threatens investment confidence and long-term economic growth.

Experts believe that unless structural reforms are implemented, the naira could continue to face volatility, with ripple effects on inflation, foreign investment, and economic resilience.

Agbakoba’s remarks underscore the urgency for Nigeria to address the twin challenges of low production and dwindling foreign exchange reserves.

The message is clear: strengthening the economy’s productive capacity is critical to restoring confidence in the naira and stabilizing Nigeria’s financial system.