The Nigerian naira is facing a challenging time as the U.S. dollar becomes stronger, due to anticipation of Donald Trump returning as U.S. president in January 2025. On the official market, the naira was exchanged at N1,678 per dollar last Friday, which is N39 less than the day before. Since the naira was adjusted in the free market in June 2023 to help stabilise the economy, the currency has lost more than 70% of its value compared to the dollar.
This situation is already affecting Nigerian businesses, especially those that have debts in dollars, like Nigerian Breweries and Nestlé Nigeria. These companies have seen their debts grow because the naira has become weaker. A recent survey by the Central Bank of Nigeria (CBN) shows that businesses think the naira will keep losing value until December, and they don’t expect it to recover until 2025.
To address these issues, President Bola Tinubu’s government introduced changes to Nigeria’s currency policies, hoping to rebuild trust among investors and boost economic growth. But these changes are facing strong opposition, especially from outside influences.
Trump’s return to office is likely to steer U.S. economic policies in a way that could put more strain on the naira. His “America First” policy, which emphasises energy independence, might lower global oil prices if U.S. production rises. This could affect Nigeria’s oil income and add more stress to the naira.
Trump’s policies, which include higher taxes on imports, could also make the U.S. dollar stronger, making the naira’s situation even more difficult. Experts predict that the naira could drop to as low as N2,000 per dollar if these trends persist.
