LAGOS, Nigeria — Naira don gain ground against dollar on Friday, for different foreign exchange markets. Dis na happen as liquidity improve, as World Bank don talk say naira dey more stable.
For the Nigerian Foreign Exchange Market (NFEM), naira close on Friday for N1,599.54, which show slight improvement from last week wey dem close for N1,599.79, according to Central Bank of Nigeria (CBN) data. For the black market, naira also maintain steady level for N1,605, a rate wey e don dey hold since Wednesday.
World Bank Group don highlight say naira dey strengthen well, and dem attribute am to several government policies, better foreign exchange liquidity, and less market volatility. “Policy efforts dey aimed at unifying and market-determined exchange rate to make the naira more competitive,” na wetin World Bank talk. Dem add say, “improved foreign exchange liquidity and reduced volatility don lead to more stable naira for this year.”
The report explain say as financial conditions dey less tight and the benefits of foreign exchange market reforms dey come forth, many African currencies don start to regain ground. “For example, Kenyan shilling don appreciate 20 percent throughout 2024 and dey remain relatively stable for 2025,” na wetin the report talk. Dem also mention say while currencies like South African rand don dey show small fluctuations around 2023 levels, many African countries wey dey face foreign exchange shortages due to heavy external debt and low export revenues don experience sharp depreciations, especially for 2024.
Among di weakest currencies past year, South Sudanese pound, Ethiopian birr, and Nigerian naira lead, all recording over 40 percent value loss in 2024. Despite this, di report show say, “compared to di two years wey don pass, naira don dey relatively stable for 2025.”
Afrinvest Securities Limited don confirm wetin World Bank talk. Dem report say, as of April 23, 2025, naira don lose just 4.0 percent against U.S. dollar, trading at N1,602.30 per dollar. Dis stability, according to Afrinvest, dey largely supported by CBN frequent interventions wey dey try close di liquidity gap for di FX market.
However, sustaining dis momentum get plenty challenges. Analysts dey warn say CBN ability to keep di interventions dey limit as resources dey dwindle. “Di firepower to maintain interventions dey lack some critical strength,” Afrinvest comment, as dem point focus to weak inflows from major FX sources for Nigeria, crude oil sales and portfolio investment flows.
Notably, portfolio investment flows fall by 51.9 percent quarter-on-quarter in Q3 2024, dropping to $1.3 billion. Dis squeeze don also affect Nigeria’s foreign exchange reserves. From $40.9 billion wey start di year, reserves don drop to $37.2 billion, due to mismatch between outflows and inflows.
Dis increasing pressure on FX reserves, analysts dey warn, fit drive away risk-averse foreign investors and hinder economic growth. E fit also contribute to International Monetary Fund (IMF) recent decision wey dem downgrade Nigeria growth projections.
Even with all dis challenges, naira performance so far for 2025 show say e dey provide a more stable and predictable FX environment, unlike di wahala wey dey happen for previous years.
