In 2024, the Nigerian naira lost a lot of its value, even though the Central Bank of Nigeria (CBN) tried to improve the foreign exchange system. Data from the CBN shows that by the end of 2024, the official exchange rate was N1,535 for one US dollar. This means the naira dropped by 40.9% compared to 2023, when it was N907.11 per dollar.
The depreciation of the naira was seen both at the official exchange and at the parallel market where it traded at N1,660/$ by the end of 2024, that is, a massive 26.8% from an average of N1,215/$ in 2023. The CBN had adopted several measures to stabilize the foreign exchange market and attract foreign investment, including unifying FX windows, bringing the Nigerian FX Code into effect, and automating foreign currency trading.
Despite these efforts, they were not enough to stop the naira from losing value. Experts say the naira’s fall is due to several reasons, such as a high demand for US dollars in the unofficial market, caused by banks, businesses, and investors, as well as a lack of dollar supply and delays in the Central Bank of Nigeria (CBN) releasing foreign currency.
Among other reasons, the naira deteriorated as a consequence of too high demand for the dollar, limited inflow of dollars, and foreign exchange release delays by CBN. The World Bank tags naira among the poorest-performing currencies in Sub-Saharan Africa in 2024.
President Bola Tinubu expects that the exchange rate will get better, reaching N1,500 per dollar by 2025, and inflation will drop to 15%. However, Fitch Ratings cautioned that if the budget deficit in 2025 is larger than expected, it could cause the naira to lose more value, push inflation higher, and make borrowing more expensive.
