The World Bank has reported that the naira, Nigeria’s currency, has experienced a significant depreciation of 10.2% in 2022 due to global food and fuel price increases and exchange rate fluctuations, contributing to inflationary pressures in the Sub-Saharan region. Similarly, the Ghanaian cedi has also depreciated by about 40% and weakened an additional 20% in 2023.
Other currencies, including those of Sudan, Malawi, The Gambia, and Nigeria, have also experienced significant losses. The World Bank noted that while oil production in Nigeria has picked up in late 2022 and improved security has helped curb oil theft, it remains below the OPEC+ quota.
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However, non-oil economic activity in Nigeria has remained weak, with the agriculture and industrial sectors facing challenges such as increased energy and raw material costs exacerbated by a weaker naira in the foreign exchange market. The World Bank also highlighted moderation of growth in Western and Central Africa subregion at the beginning of the year due to fiscal pressures, unsustainable debt positions, and high inflation in the largest countries of the sub-region.
Despite some positive signs of real GDP growth and improved sector activity in Nigeria, demonetization efforts initiated in mid-December have impacted economic activity.