The naira of Nigeria and the cedi of Ghana are currently the two worst-performing currencies in the world, with the naira losing 37% and 55%, respectively, of its value against the dollar.
Bloomberg reports that while the naira was performing admirably against the dollar on the official market, it had plunged 37% on the black market, placing it second only to the Ghana cedi in terms of performance.
Despite the fact that Nigeria's official exchange rate is strictly controlled, the value of the country's money on the black market is largely determined by the level of demand for the dollar, which has been very high as a result of the country's strict regulatory policies against the circulation of the dollar in the country.
The naira’s depreciation has continued in the wake of the Central Bank of Nigeria’s decision to redesign the currency and the long-standing ban on Bureau De Change operations.
Godwin Emefiele, the governor of the central bank, declared in October that new naira notes would be released by December 15.
However, experts have predicted that the currency’s depreciation is likely to continue in the short term given the CBN’s announcement of plans to restructure the country’s currency, the prolonged ban against BDC operators, the low oil revenue, and the increased outflows due to uncertainty surrounding the upcoming presidential election.
In order to halt the country’s currency’s rapid depreciation, the CBN 2021 outlawed the sale of foreign exchange to BDC operators. The central bank accused the BDCs of making illegal foreign exchange sales above the market they were authorised to serve.
Before the ban, BDC operators were an important part of the black market, assisting people who couldn’t lawfully get foreign currencies directly from the CBN to maintain their exchange rates.
Prime 9ja Online reported that the naira traded at N890 against the dollar on Saturday, an unprecedented rise from the N700 mark which it traded between September and early October.
With the rate at which the value of the currency is falling, experts have also predicted that before the end of the year, the naira will exchange at N1000 to the dollar.
In October, the Ghanaian cedi was rated as the worst-performing currency in the world after it lost 45.1 per cent of its value to the U.S. dollar this year.