The Nigerian naira and Zambian kwacha are expected to strengthen further against the U.S. dollar over the coming week, while the currencies of Ghana, Kenya, and Uganda may remain stable or face pressure, traders said on Wednesday.
In Nigeria, the naira has benefited from improved foreign exchange (FX) supply, buoyed by strong oil receipts and renewed flows from foreign investors attracted by high yields on government debt. The unit was quoted at 1,364 to the dollar in interbank trading on Thursday, up from 1,388 a week earlier. On the parallel street market, the naira was exchanging at around 1,445 per dollar.
“Market sentiment has swung firmly bullish on the naira, lifted by high oil prices and clearer FX rules,” a Lagos-based trader said. “If the upcoming bond auction is strongly oversubscribed, liquidity could tighten further and push the currency toward the 1,350 level.”
Nigeria, Africa’s largest oil producer, has seen foreign exchange inflows improve as crude prices remain elevated, supporting government revenue and enabling greater allocation of dollars to the official market. Analysts also point to clearer regulations for FX transactions and increasing investor confidence in debt instruments as key drivers behind the naira’s gradual recovery.
Meanwhile, Zambia’s kwacha has also posted gains against the dollar, trading at 19.09 per dollar, improving from 20.29 a week ago. The currency’s strength is underpinned by improving macroeconomic fundamentals, robust copper prices, and cautious optimism over fiscal management. Zambia, the continent’s second-largest copper producer, benefits from resilient global demand for the metal, which continues to support export earnings and FX liquidity.
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“Zambia’s kwacha remains on the front foot, largely thanks to the positive performance of copper prices and steady inflows from mining exports,” a Lusaka-based currency dealer said. “This trend is likely to continue unless global copper prices weaken significantly or domestic liquidity conditions tighten unexpectedly.”
Elsewhere in East Africa, the currencies of Kenya and Uganda are expected to remain stable against the dollar, traders said, reflecting limited market volatility and moderate FX demand. In contrast, Ghana’s cedi may face depreciation pressures due to persistent balance-of-payments challenges and slower-than-expected inflows of foreign currency.
Market observers note that regional FX performance is increasingly influenced by commodity prices, investor sentiment, and central bank policies. Oil-exporting nations such as Nigeria benefit directly from higher crude prices, while mineral exporters like Zambia rely on strong metals markets to sustain FX liquidity. Conversely, economies reliant on imports and external debt financing face currency vulnerabilities when inflows slow or global interest rates rise.
Analysts also highlight the impact of government debt instruments on currency movements. In Nigeria, strong demand for Treasury bills and bonds can tighten liquidity in the interbank market, creating upward pressure on the naira. Similarly, Zambia’s government continues to manage debt issuance and foreign reserves to support the kwacha.
“The outlook for African currencies over the next week will largely be determined by commodity price trends, investor appetite for local debt, and central bank interventions,” said Ayo Olagunju, a West Africa-focused economist. “Nigeria and Zambia are positioned favorably given current oil and copper prices, but policy consistency and liquidity management remain key to sustaining gains.”
As FX markets across sub-Saharan Africa continue to react to global commodity trends, investors and importers are closely monitoring currency movements to manage exposure and plan cross-border transactions.
The coming week will also see the release of key macroeconomic data from several countries, which could influence sentiment further, particularly in Ghana, where external imbalances and debt service pressures remain closely watched by traders.
