Nigeria’s currency recorded a historic turnaround in 2025 as reforms by the Central Bank of Nigeria (CBN) helped the naira post its first annual appreciation in 13 years. According to a report by Comercio Partners, the naira strengthened by about 6.87 percent against the US dollar, marking a significant shift after years of persistent depreciation. The investment firm described the development as a sign that Nigeria’s economy may be gradually transitioning from instability toward long-term resilience.
The report, titled “Policy Shock to Structural Reset: Charting a Sustainable Economic Path,” noted that 2025 was a transformative period for the country’s foreign exchange market. At the start of the year, the naira traded at around ₦1,541 per dollar in the official market but improved to roughly ₦1,435 per dollar by December 31, 2025. The improvement also helped narrow the gap between the official and parallel exchange rates, a key indicator of growing confidence in the FX market.
Analysts attributed the turnaround largely to targeted reforms introduced by the CBN. Among them were the launch of the Nigerian Foreign Exchange Code, designed to improve transparency and ethical conduct among banks and dealers, and the introduction of an Electronic Foreign Exchange Matching System to make interbank trading more efficient. These measures strengthened liquidity in the FX market, boosted external reserves by more than 11 percent, and restored investor confidence.
The report further revealed that Nigeria attracted nearly $21 billion in capital inflows within the first ten months of 2025, representing a 70 percent increase from 2024. Higher remittances, portfolio investments, and oil-related earnings contributed to the surge, while improved domestic refining capacity reduced pressure on foreign exchange demand. Together, these factors supported sustained stability for the naira and strengthened the country’s external buffers.
Looking ahead, Comercio Partners projected cautious optimism for 2026, noting that the naira opened the year around ₦1,430 per dollar. While inflation is expected to moderate gradually, risks such as policy slippage, foreign exchange shocks, and fiscal pressures remain. Still, the report concluded that if current reforms continue and global conditions remain favorable, Nigeria could move from a phase of stabilization to broader economic recovery and stronger investor confidence.
source: punch