The naira saw a record devaluation of 10.2% in 2022, according to data from the World Bank.
The Punch reported that the World Bank recognized these factors as primary causes of inflationary pressures in the Sub-Saharan area, along with rising food and fuel prices globally and the depreciation of the exchange rate.
The loan-granting financial organization also observed that the Ghanaian cedi had lost around 40% of its value and had lost an additional 20% of its value so far in 2023.
Other currencies that suffered big losses last year were those of Sudan (down 23.6%), Malawi (20.7%), The Gambia (down 14.6%), and Nigeria (down 14.6%), according to the report.
The World Bank revealed that oil production in Nigeria started to increase in late 2022 and highlighted that better security has helped to prevent additional oil theft, although oil production is still below the OPEC+ quota.
Also emphasized was the fact that although oil production in January 2023 rose to a 10-month high of 1.34 million barrels per day, it still fell short of the nation’s OPEC+ quota.
The report stated that despite this, “non-oil economic activity remained poor as the agricultural and industrial sectors saw a quick increase in the costs of energy and raw materials that were compounded by a weaker naira in the foreign exchange market.”
The World Bank reported that data in the sub-region of Western and Central Africa indicated that growth had moderated at the beginning of the year as a result of difficulties with increasing fiscal pressures amid a lack of fiscal space and unsustainable debt positions, as well as with persistently high inflation, which affected the largest countries in the sub-region.
“Just available activity figures from Nigeria indicate conflicting outcomes. On the one hand, the fourth quarter of 2022 saw real GDP growth that was stronger than anticipated. From 2.3 percent in the third quarter, it increased to 3.5 percent year over year. By the end of 2022, activity in the oil and non-oil sectors had improved.
According to reports, non-oil activity growth climbed marginally to 4.4% year-over-year in the fourth quarter of 2022 from 3.3%.
Stronger agricultural growth and a rebounding industry seem to have been the main factors in this rise. Demonetization operations, which began in mid-December, are hindering economic growth, it was claimed.