World Bank Says Naira Lost 10 Percent Value In 2022

The Nigerian currency naira lost 10.2% of its value last year, as per World Bank.

According to Africa's Pulse report dropped in April 2023, the currency value decreased due to a rise in food and fuel prices in Nigeria.

World Bank explained in the report that there are other worst-performing currencies including the Sudanese pound, Malawian Kwacha and Gambian Dalasi.

"Other currencies with significant losses last year include those of Sudan (23.6 percent), Malawi (20.7 percent), The Gambia (14.6 percent), and Nigeria (10.2 percent)," the bank said, Punch reported on Thursday.

It continued, "Rising food and fuel prices, as well as the depreciation of the exchange rate, were the main drivers of inflationary pressures in the region—and, particularly, in countries like Ghana, Sudan, and Malawi."

As per the bank, several countries including Nigeria are suffering from high budget deficits and inflation.

"About half of the Sub-Saharan African countries face both high inflation (low monetary policy space) and wider fiscal deficits (low fiscal policy space)," the bank said. "Notable cases include Ghana, Nigeria, Malawi, Zambia, and Burundi, among others."

Finance Minister Zainab Ahmed disclosed on Wednesday that the World Bank granted a relief package worth $800 for Nigeria in order to expand the national social program before removing the subsidy from petrol in June.

"There's a provision (of the Petroleum Industry Act) that says 18 months after the effectiveness of the PIA that all petroleum products must be deregulated," Ahmed explained, Business Insider Africa reported. "That 18 months takes us to June 2023."

The finance minister explained that the funds received from the World Bank would be distributed in cash form to the "most vulnerable" people in the society that has been registered in a national social register.

"Today, that register has a list of 10 million households," he added. "10 million households are equivalent to about 50 million Nigerians."

Aside from this report, the National Bureau of Statistics announced that the inflation in Nigeria rose to 21.91% in February compared to 21.82% in January.

Debt Management Office (DMO) Chief Patience Oniha disclosed on Wednesday that Nigeria has increased public debt due to constant borrowing and promissory notes alongside the budget deficit.

"I should say very clearly that I am concerned," Oniha said. "These days, I am more of a revenue advocate. As I said, total public debt to GDP is about the lowest in Africa. Countries like Kenya and Angola have over 60%."

"We have been running budget deficits, and those deficits are funded, 85 to 95%, from borrowing," she continued. "The other aspect, we have contracted several loans in the past and disbursements are going on, which add to it."

Oniha noted that all data is publicly available, adding that every year Nigeria borrows, it adds up. She concluded, "If you look at this year's budget, the budget size is N21 trillion, borrowing is N10 trillion."

Nigeria is also going through a major economic crisis since demonetization as it mopped over 70% of the liquid money.