African currencies came under renewed pressure following the escalation of geopolitical tensions involving the United States, Israel, and Iran, with currencies across the continent depreciating by 3.2 per cent as global investors retreated from emerging and frontier markets.
This is according to a new report titled “Trade and Development Foresights 2026: Global economy faces a geopolitical challenge” by the United Nations Conference on Trade and Development (UNCTAD).
The report showed that the outbreak of conflict-related shocks disrupted global capital flows, weakened investor sentiment, and triggered heightened volatility across developing economies between February 27 and March 13, 2026.
UNCTAD noted that many emerging and frontier-market currencies had recorded strong appreciation before the conflict intensified, but the gains reversed sharply as global risk aversion increased.
According to UNCTAD, African currencies were among the worst affected globally as investors reduced exposure to riskier assets following the geopolitical escalation.
African currencies depreciated by 3.2 per cent after previously appreciating by 8.7 per cent during the pre-conflict period.
Emerging-market economies, which had gained 5.9 per cent before the crisis, later recorded a 1.3 per cent decline.
Frontier-market economies also reversed from a 3.3 per cent appreciation to a 0.7 per cent depreciation.
The report stated that the Americas recorded the sharpest post-conflict decline among developing regions at 3.6 per cent, after earlier appreciating by 16.6 per cent, while Asia showed greater resilience, recovering from a 0.8 per cent decline to a 2.0 per cent appreciation.
UNCTAD attributed the varying levels of currency depreciation across regions to factors including exchange-rate regimes, debt sustainability concerns, prior capital inflows, and the share of non-resident investors in domestic financial markets.
The report highlighted growing concerns over the vulnerability of African economies to external shocks, especially in countries heavily dependent on imports, foreign portfolio investments, and external borrowing.
Rising global energy prices have increased inflationary pressures across many African economies.
Heightened geopolitical uncertainty has weakened investor confidence in frontier markets.
Tightening global financial conditions have raised concerns about debt sustainability and capital outflows.
Nigeria’s currency movement
Nigeria’s naira also experienced fluctuations during the period, although recent official market data suggested some level of resilience in the foreign exchange market.
According to figures released by the Central Bank of Nigeria (CBN), the naira appreciated to N1,363.5/$ on March 13, 2026, from N1,425/$ recorded on March 9, 2026.
The currency traded at:
N1,370/$ on March 12
N1,373.5/$ on March 11
N1,390.5/$ on March 10
N1,398/$ on March 6
Analysts said the relative stability of the naira may have been supported by improved foreign exchange liquidity, stronger oil earnings, and continued efforts by monetary authorities to strengthen investor confidence.
Global financial markets have remained highly sensitive to geopolitical developments in the Middle East, particularly due to concerns over energy supply disruptions and rising oil prices.
Escalating tensions between the US, Israel, and Iran triggered renewed uncertainty across global markets.
Emerging and frontier economies experienced capital outflows as investors shifted toward safer assets.
African economies remain particularly exposed due to structural dependence on imports and external financing.
Economists also noted that countries with weaker macroeconomic buffers and larger foreign investor participation in local markets experienced sharper currency adjustments.
The recent currency volatility comes as several African central banks continue efforts to stabilise exchange rates and contain inflationary pressures.
Nigeria and other African economies have intensified reforms aimed at improving FX liquidity and investor confidence.
The Naira closed the first trading week of May 2026 on a relatively stable note against the United States dollar, settling at N1,364/$ in the official foreign exchange market.
The naira closed April 2026 at N1,374/$ compared to N1,387/$ recorded at the end of March, marking the first April gain for the currency since 2024.