Nigeria’s foreign reserves rose to $34.14 billion as of Friday following a $2.75 billion loan borrowed from the World Bank.

This represents a 4.06% rise from the $32.74 billion recorded on June 3, 2024, according to data from the Central Bank of Nigeria (CBN).

The upward trajectory in the country’s reserves has been bolstered by recent loans secured from the World Bank.

In May, the Bureau of Public Enterprises announced that the Federal Government had obtained a $500 million loan from the World Bank to enhance the country’s electricity distribution sector.

Also, the World Bank has committed $2.25 billion in support to help stabilize Nigeria’s economy, bringing the total recent loan package to $2.75 billion.

The World Bank’s statement on the $2.25 billion package highlighted its dual focus on providing immediate financial and technical assistance for economic stabilization and enhancing support for the nation’s poorest and most vulnerable populations.

This financial injection is expected to support ongoing efforts to increase non-oil revenues and safeguard oil revenues, thereby promoting fiscal sustainability and enabling the provision of quality public services.

This infusion of funds has led to an increase of over $1 billion in Nigeria’s reserves within a month.

Last year, Nigeria faced a severe dollar shortage, prompting the CBN to float the naira to attract more foreign exchange inflow.

Despite these measures, the naira has depreciated significantly, losing over 300% of its value in one year and trading at 1,514.31/$ at the Nigerian Autonomous Foreign Exchange market on Friday.

A Bloomberg report recently ranked the naira as the worst-performing currency globally for the first half of 2024, attributing the decline to devaluation, insufficient dollar liquidity, and market volatility.

The Egyptian pound and Ghanaian cedi were also listed among the worst performers.

Despite these challenges, CBN Governor Olayemi Cardoso expressed cautious optimism, noting that the central bank is “relatively pleased” with the progress in stabilizing the naira.

Cardoso indicated that the worst of the currency’s volatility might be over.

In an effort to further stabilize the naira and improve dollar supply, the CBN has implemented several measures.

Last week, the central bank announced that International Money Transfer Operators (IMTOs) could access the official window to sell foreign exchange, thereby enhancing naira liquidity for timely settlement of diaspora remittances.

Also, the CBN resumed dollar sales to bureau de change operators in February, allocating $20,000 to each eligible operator to boost liquidity in the retail forex market.

The CBN’s efforts, combined with the World Bank’s financial support, aim to address Nigeria’s economic challenges and set the stage for more sustainable growth.

In a significant move to combat food shortages in the region, Tanzania has agreed to supply 650,000 tons of corn to neighboring Zambia.

The agreement signed on Saturday in Dar es Salaam between Tanzania’s National Food Reserve Agency (NFRA) and Zambia’s counterpart, comes as Zambia grapples with a severe dry spell induced by El Niño.

Tanzania’s Agriculture Minister, Hussein Bashe, announced the deal, stating that the NFRA would deliver the maize over the next eight months.

This agreement forms part of Tanzania’s broader strategy to export 1 million tons of corn this year to assist neighboring countries facing staple food shortages.

“Our country has produced 8.1 million tons of corn this season, surpassing our national demand of less than 6 million tons,” Bashe said, highlighting Tanzania’s capability to support its neighbors. “This agreement with Zambia reflects our commitment to regional solidarity and food security.”

Zambia has been particularly hard-hit by the El Niño phenomenon, which has caused widespread drought and led to significant crop failures.

In February, Zambian President Hakainde Hichilema declared the drought a national disaster and appealed for international aid in April.

Secretary to the Treasury Felix Nkulukusa reported that Zambia has received commitments totaling about $500 million from international partners but still requires an additional $400 million to fully address the crisis.

The Tanzanian corn will play a crucial role in alleviating the food shortage in Zambia, ensuring that the nation can sustain its population through the ongoing drought.

The export agreement also underscores Tanzania’s strategic use of its agricultural surplus to foster regional stability and support.

This development marks a pivotal moment in East African agricultural trade, demonstrating how regional cooperation can effectively address crises exacerbated by climate change.

As Tanzania steps up to aid its neighbor, the move is expected to strengthen bilateral ties and enhance collective resilience against future environmental challenges.

Emerging-market currencies surged on the final trading day of the year’s first half, a period otherwise marked by unexpected election outcomes and persistent uncertainty over the Federal Reserve’s interest rate trajectory.

The South African rand and the Chilean peso led the charge on Friday, propelling an index of emerging-market currencies to a 0.2% gain after the core personal consumption expenditures price index in the US showed signs of slowing.

This development has bolstered hopes for potential rate cuts from the Fed in the coming months. Despite the gains, the index ended the first half of the year down by 1%, marking its weakest start since 2022.

Across the developing world, assets have endured significant pressure in recent months due to volatile election results.

Upcoming ballots in major economies, including France, the UK, and the United States, are expected to influence investor sentiment and capital flows in the latter half of the year.

Stock markets, however, have largely shrugged off these uncertainties, posting a 6% return over the past six months, marking the best first half since 2021, according to Bloomberg data.

The equities gauge closed higher on Friday, driven by strong performances in the information technology sector.

Rand Leads the Pack

The South African rand saw a remarkable rally, buoyed by optimism surrounding the formation of a broad coalition government. The currency gained as much as 1.8% against the dollar, its largest single-day gain this year.

Earlier on Friday, Bank of America Corp. strategists closed their bearish trade recommendation for the rand, anticipating that a coalition administration would soon be established by the African National Congress, which lost its parliamentary majority in the May elections, and the centrist Democratic Alliance.

“On confirmation of the cabinet announcement, we expect further gains in South African assets broadly,” said Razia Khan, chief economist for Standard Chartered Bank.

Mexican Peso and Indian Bonds

The Mexican peso also strengthened, rising by 0.7%, after the central bank indicated that policy would remain restrictive, even as some space for future interest rate cuts appeared to be emerging.

In India, government bonds were poised to attract billions of dollars in new inflows following their inclusion in JPMorgan Chase & Co.’s emerging market index.

This move is set to open up India’s $1.3 trillion bond market to a broader range of global investors.

The mixed performance of emerging-market assets highlights the complex interplay of global economic policies and regional political dynamics.

As investors navigate these turbulent waters, the upcoming elections and Fed decisions will likely continue to drive market sentiment and influence currency movements in the months ahead.