The Nigerian Naira is projected to weaken to a fair value of N1,804 per dollar at the official market in 2025, according to a report by Afrinvest titled “Beyond The Rhetorics: Transforming Reforms to Tangibles.” The report attributes this forecast to anticipated constraints on the Central Bank of Nigeria (CBN) in meeting foreign exchange demands, alongside expectations of continued FX volatility.
Afrinvest noted that the projected depreciation stems from the CBN’s reliance on foreign exchange reserves boosted by “inorganic sources,” which often come with restrictive conditions on usability. The report highlighted that while volatility in the foreign exchange market would persist, it might do so at a more moderate pace compared to previous years.
This projection contrasts with the N1,500 per dollar exchange rate proposed in the 2025 budget presented to the National Assembly. The forecast underscores the challenges of achieving this target, given the current economic conditions and the pressures on Nigeria’s foreign reserves.
As of Friday, the Naira showed some gains, closing at N1,534 per dollar in the official market and trading at N1,650 in the black market. While currency fluctuations were a recurring issue throughout 2024, the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in October has contributed to relative stability in the foreign exchange market.
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