Nigeria and Kenya suffer worst currency hits in more than 20 years
For Nigeria and Kenya, 2023 certainly had its ups and downs. While both countries recorded significant growth across numerous industries, there were still instances of socio-economic drawbacks. Beyond economic instability, African nations in general were struggling with underperforming currencies. While some African nations managed to maintain the integrity of their currencies, a few African nations struggled. Out of the ten worst-performing currencies of 2023, seven were African.
The Nigerian Naira (NGN) was one of the currencies that were strugling. In fact, 2023 had been the worst year for the currency since 1999, with no rebound in sight. The steep fall of the Naira is a result of the country’s new administration’s decision led by the president, Bola Tinubu, to float the currency. In June 2023, the Central Bank of Nigeria officially confirmed the removal of the rate cap on the naira at the Investor’s and Exporters’ (I&E) Window of the foreign exchange market.
Similarly, the Kenyan Shilling experienced its largest drop in the past 30 years, “as interest rates in major economies rose, offshore investors reduced their holdings and foreign-exchange inflows from exports declined.” Kenya’s central bank increased its benchmark interest rate on December 5th for the second time since Governor Kamau Thugge took office in June, citing the need to support the country’s damaged shilling.