Naira Gains 5% As African Currencies Slide, UNCTAD Reports

A stack of Nigerian naira banknotes next to a US dollar bill

AFRICAN STOCKS AND FINANCEOctober 11, 2026 at 3:05 AM UTC

TLDR

The Nigerian naira gained 5% against the US dollar this year, defying a broader trend of weakening African currencies.
The Central Bank of Nigeria's liquidity support and higher oil prices contributed to the naira's stability.
Despite currency strength, Nigerian households face significant energy price increases due to insufficient refining capacity.

The Nigerian naira has gained approximately 5% against the US dollar this year, according to the United Nations Trade and Development (UNCTAD) Report 2026. This contrasts with other African currencies, which collectively weakened by 1.2% against the dollar between January 1 and September 11. Africa was the only developing region whose currencies lost ground during this period.

The naira's official rate moved from N1,400 to the dollar on January 28 to N1,330 by October 2, with the Central Bank of Nigeria (CBN) quoting N1,331.77 on October 7. Reuters reported CBN liquidity support was a factor in this stability, as Governor Olayemi Cardoso affirmed the bank's commitment to a transparent foreign exchange market. The gap between official and parallel markets also narrowed to N24 per dollar on October 6, down from N30 the previous weekend.

Globally, currencies in developing Americas gained 3.3%, and developing Asia rose 0.7%. Emerging market economies collectively saw a 2.1% gain, while frontier markets increased 0.5%. The UNCTAD report highlighted Brent crude prices surging from $70 to over $110 a barrel, benefiting energy exporters like Nigeria. Despite this, Nigerian households faced significant energy cost increases, with diesel prices up 82.7% and petrol up 48.1% since February 23.

Nigeria, as an oil exporter, is positioned to benefit from higher crude prices. However, its exposure to foreign investment in local-currency government debt makes it sensitive to shifts in global financial conditions. The report noted that insufficient domestic refining capacity means gains from higher crude prices are partly offset by costlier refined products, impacting households.

UNCTAD projects Africa's economy to grow 4.1% in 2026, significantly outpacing the global forecast of 2.6%. Despite the naira's recent stability, the report indicated the calm might be fragile, citing a fall in trading volumes at the official foreign exchange window in the week to October 6. This suggests potential underlying pressures.

Key Takeaways

The naira's recent appreciation, gaining approximately 5% against the US dollar this year, contrasts sharply with the broader trend across Africa, where currencies collectively weakened by 1.2% between January 1 and September 11. This resilience is partly attributed to liquidity support from the Central Bank of Nigeria, which has aimed for a transparent foreign exchange market rather than targeting a specific rate. The narrowing gap between official and parallel market rates, from N30 to N24 per dollar in a week, further indicates improved stability. Nigeria, as an oil exporter, has also benefited from the surge in Brent crude prices from $70 to over $110 a barrel following the Middle East conflict, a factor that generally supports exporter currencies. However, this advantage is partially negated domestically, as insufficient refining capacity means Nigerian households still face significant energy shocks, with diesel prices up 82.7% and petrol up 48.1% since February. Furthermore, Nigeria's reliance on foreign investment in local-currency government debt makes it vulnerable to global financial shifts, adding a layer of sensitivity despite the current currency strength. While UNCTAD projects robust African economic growth of 4.1% in 2026, signs of a "thin calm," such as falling trading volumes at the official window, suggest that the naira's stability may face ongoing pressures.

Nigeria