Market News

Bold reforms initiated by the Central Bank of Nigeria (CBN) which include floating of naira and inflation targeting policy leave tremendous impacts on the economy. Naira gains strength against major international currencies. The modest recovery rekindles the hope of $1 to N1000 parity in a no distant time, ABDULWAHAB ISA examines the $1/N1000 scenario as projected by renowned investors

There is no doubt about the current healthy state of the national currency, the Naira. After the initial succumb to the vagaries of challenges, a combination of external and internal influences, Naira makes a rapid recovery, courtesy of Central Bank of Nigeria (CBN) 2023 bold and daring reforms.

Prior to the apex bank’s historic reforms, the currency was on artificial prop up lifesaving support of the CBN. The Naira was on articulated systemic intervention.

Though adjudged unhealthy, it was sustained by the old regime at the CBN. The 2023 reforms, spearheaded by the administration of President Bola Ahmed Tinubu and accelerated by the CBN Governor Olayemi Cardoso dramatically changed the old game.

2023 policy change

In October 2023, CBN policy changed the tide. The introduction of a unified exchange rate, as a replacement of the dual exchange rate regime; Cardoso determined action on reining the high inflation spikes and the restoration of orthodox monetary policy; halting Ways and Means to the government and other measures restored hope to naira.

However, the master stroke was the clearing of $7 billion in FX backlogs, and aggressive rate hikes, which strengthened local currency. Between 2023 and 2026, a combination of reforms by CBN complimented by prudent fiscal policy initiative by the federal government strengthened momentum for the Naira.

Confidence rebounds

Given series of reforms initiated by CBN, investors’ confidence began to abide in the currency. The Nigerian Naira is experiencing a significant recovery in early 2026, driven by rising external reserves. Latest data from the Central Bank of Nigeria show that gross external reserves rose from $45.90 billion recorded on January 13, 2026 to $48.37 billion as of February 16, 2026.

This represents a $2.47 billion increase within one month, translating to a 5.4 per cent rise over the period. The increase in forex inflows rubs on the forex exchange rate, leading to appreciation both in official and parallel markets.

The Central Bank of Nigeria (CBN) actively supplied foreign exchange to banks and BDC operators. This curbs demand pressure.

Rising nonoil sector exports

For a long time, Nigeria was predominantly crude oil exporting nation. Every successive administration played up diversification to the non-oil sector.

The diversification to the non-oil sector, that could earn the nation much of desired forex was a policy in paper that lacked implementation. The current administration took a bold step to change the narrative. The non-oil sector got a lift.

For instance, in 2025, Nigeria exported a total of 281 non-oil products. The products cut across agricultural commodities, processed and semi-processed goods, industrial inputs, and solid minerals, reflecting gradual progress toward value addition and broader product representation in global markets.

Nigeria’s non-oil exports reached markets across 120 countries, with the Netherlands contributing 17.53%, Brazil 10.35%, and India 7.63% of non-oil export. The three countries emerged as the top three destinations by value.

Export to Netherlands increased by 32.46% with products including cocoa beans, cocoa butter, sesame seeds and others. Export to Brazil increased by 19.07%. Within the African market, Nigeria exported nonoil products to 11 ECOWAS member countries.

The exports, totaling 1,234,177.01 metric tons amounted to $271.255 million, constituting 4.46% of the total export value. In 2025, two ECOWAS countries secured a position among the top 20 global destination markets for Nigeria’s non-oil export, with Ghana coming in at 13th position and Cote D’Ivoire coming in at 20th position.

Nigeria also exported to 25 other African countries outside ECOWAS, bringing the total export destinations in Africa to 36. The value of these exports, totaling 967,397.94 metric tons, amounts to$206.941 million, representing 3.40% of the total non-oil export value.

Speaking recently in Abuja at the presentation of 2025 non-oil sector commodity performance, Chief Executive Officer/ Director of Nigeria Export Promotion Council (NEPC) Dr Nonye Ayeni shared data evidence, which suggests that non-oil export is increasing, and all stakeholders are taking advantage of the potentials and opportunities inherent in the sector.

According to her; “It also lays credence to the fact that AFCFTA holds the key to Intra-African trade as it promises to be the largest free trade area in the world both by area and by the number of countries, connecting the 54 countries in Africa with over 1.3 million people.”

She said her agency was working with various stakeholders and the Federal Ministry of Industry, Trade and Investment, to ensure that Nigeria becomes a hub and takes its position as the giant of Africa. In terms of products, Cocoa and its derivatives, Urea, Cashew, Sesame Seed, Gold Dore, Aluminum Ingots, Copper Ingots, Soya Beans and meal, and Rubber emerged as the top-performing non-oil export products for the year.

According to the pre-shipment report, non-oil export value rose to approximately $6.1 billion, representing a year-on-year increase of about 11.5%; over and above the $5.46 billion recorded in 2024.

She disclosed; “This marks the highest non-oil export value achieved in the country for formal documented trade since the inception of the Council, beating our own record and underscoring the growing resilience and relevance of the non-oil export sector to Nigeria’s economy.

“This outstanding performance is not the total story as a lot of exports still go out informally through our various borders. NEPC in partnership with the National Bureau of Statistics and the Central Bank and other stakeholders are working hard to mainstream informal trade.

“In volume terms, total non-oil exports stood at 8.02 million metric tonnes, reflecting a 10% increase compared to the 7.29 million metric tonnes recorded in the previous year. This growth in both value and volume demonstrates improved export activity across multiple value chains and market destinations.”

In 2025, Nigeria exported a total of 281 non-oil products. These products cut across agricultural commodities, processed and semiprocessed goods, industrial inputs, and solid minerals, reflecting gradual progress toward value addition and broader product representation in global markets.

Industrial policy to the rescue

To give fillip to much of the work done by the government in promoting the nonoil sector, the federal government recently launched Nigeria Industry policy.

The policy is a strategic, targeted effort by government to alter the structure of economic activity, shifting it toward sectors or technologies deemed necessary for long-term growth, national security, or societal goals. It is essentially a set of interventions—including subsidies, tax incentives, and regulatory changes—meant to address market failures that prevent private industry from achieving these objectives on its own.

President Bola Ahmed Tinubu, unveiled Nigeria Industrial Policy 2025 with a charge to relevant ministries, departments and agencies (MDAs) to key into the document.

According to him, the policy, which is a roadmap for re-engineering Nigeria’s industrial base, unlocking value across sectors, and placing production, competitiveness, and jobs at the centre of the nation’s economic strategy, established a clear implementation architecture, because policies rarely fail at conception but at execution.

Speaking during the official launch of the Nigeria Industrial Policy 2025 at the Bola Ahmed Tinubu International Conference Centre, Abuja, the President, who was represented by his deputy, Vice President Kashim Shettima, regretted that for too long, Nigeria has grappled “with fragmented value chains, high production costs, infrastructure gaps, policy inconsistency, and insufficient coordination between government and industry.”

Emphatically, the Nigerian leader noted, however, “this stops now,” as the Nigeria Industrial Policy 2025 is an acknowledgement of such deficiencies. “We have realised that industrialisation is not a wish you think about; it is an action you perform.

More than that, we must remind ourselves that this task demands coherence across energy, trade, infrastructure, finance, skills, and innovation. It requires a partnership between the government and the private sector.” Tinubu insisted on timely implementation and execution of the policy, noting that when his administration came on board in 2023, it did so with a promise to redefine Nigeria’s industrial ambition.

He said; “The defining strength of this policy is its insistence on implementation. This administration will not measure success by the number of documents we produce. “We will measure success by the number of factories that open their gates at dawn, by the jobs created for our young men and women, by the exports that leave our ports bearing the mark of Nigerian excellence, and by the value retained within our own economy.”

Outlining key aspects of the policy, the President said it prioritises strategic sector focus anchored on the nation’s comparative and competitive advantages. He continued: “It advances value chain development so that Nigeria moves steadily from exporting raw materials to producing finished goods.

It integrates our micro, small, and medium enterprises into the heart of industrial growth, because prosperity must not be exclusive. “It aligns infrastructure and energy with industrial ambition, for factories cannot run on policy alone. It strengthens skills, technology, and innovation to prepare our people for the industries of today and tomorrow.”

While calling for more private sector participation, the Nigerian leader urged support for the sector “to invest with confidence and responsibility, to deepen local value chains, to create jobs and transfer skills, and to partner with the government in building a productive economy.”

Tinubu commended the Minister of State for Industry, Senator John Owan Enoh; “for his disciplined leadership and clarity of purpose in driving” the process, adding that the Minister “has demonstrated that policy leadership is not about noise, but about substance, coordination, and follow-through.”

He also applauded the Ministry’s technical teams, industry stakeholders, manufacturers, investors, and practitioners for shaping the “policy into a document grounded in reality and informed by experience” with their insights.

Enoh said the campaign marked a turning point aimed at building an industrial Nigeria that produces, competes, and prospers.

Boost in diaspora remittances

Diaspora remittances are funds transferred by migrants to their home countries, serving as a vital, stable source of foreign exchange and household income for developing nations. Nigeria is a top global recipient, receiving over billion annually, which constitutes a major part of its economy and exceeds foreign direct investment (FDI).

These flows support households, boost consumption, and are increasingly channeled into economic development. Remittances often represent a larger, more stable source of foreign income for developing nations than foreign direct investment or foreign aid.

The Central Bank of Nigeria (CBN) has implemented measures to increase formal inflows, such as the “willing buyerwilling seller” model and licensing new International Money Transfer Operators (IMTOs). Remittances are Nigeria’s second-largest source of foreign exchange, trailing only crude oil earnings.

The US is the largest source (30%), followed by the UK (20%), Cameroon (12%), and others like Italy, Ghana, and Germany. As of late 2025, Nigeria’s diaspora remittance inflows reached approximately $23 billion, marking a five-year high. Monthly formal inflows increased significantly to around $600 million, bolstered by central bank policy reforms.

Achieving $1 to N1000 parity

In 1972, when the Naira was created, it was worth almost twice the dollar. You needed almost 2 US dollars just to get only one Nigerian Naira. The naira was at its best…The country boomed with nonoil exports.

The manufacturing firms were in their thriving era; infrastructure delivery was at a top notch. it was a source of attraction to investors. In fact, Nigeria in the 1970s was a pride of every nation – far and beyond. The currency started its dim in the late 1980’s.

The abandonment of non – oil commodities exports which was the source of forex inflow in the past; the concentration of effort on crude oil exports marked the beginning of Nigeria’s currency woes. It got to its lowest crash in the middle of 2000s until the CBN introduced a series of reforms aimed at reviving the naira strength under the watch of Olayemi Cardoso.

The Naira has begun its recovery journey under the new dispensation. Investors’ confidence is building as more nonoil export commodities are being ramped up. Investors have expressed confidence in the Naira momentum, revamp, giving assurance that it could level up to $1 to N1000 in a no distant time.

At the launch of industrial policy document recently in Abuja, business mogul and Chairman of Dangote Group of Companies, Alhaji Aliko Dangote, lauded the federal government for introducing a progressive industrial policy, observing that Nigeria is the only country in Africa where the private sector is bigger than the government.

An optimistic Dangote said domestic manufacturers were pleased with the policy the Tinubu administration has created, expressing firm belief that “the naira, this year, will be at N1,000 to $100.” He said many investors were willing to invest in Nigeria due to FX stability and other reforms.

Dangote suggested that the only thing remaining is the protection of indigenous industries, saying “if there is no protection, there is no way any industry will thrive here.” Addressing Vice President Kashim Shettima and other dignitaries, Dangote noted that manufacturers are already seeing the results of these policies.

However, he described the situation as a “catch-22,” explaining that while a stronger naira lowers the cost of living in an import-dependent nation, the government must balance this with the need to generate revenue. He emphasised that the longterm solution lies in shifting Nigeria from an import-based economy to a manufacturing powerhouse.

To achieve this, Dangote called for the protection of local investors through improved infrastructure, particularly power, which remains a significant hurdle for businesses. He argued that the new industrial policy must be backed by firm protection for industrialists to successfully drive job creation and economic growth.

His optimistic projection mirrors that of Femi Otedola, Chairman of First Bank Holdings, who recently predicted a N1,000/$1 exchange rate, citing the impact of increased local refining capacity.

On his part, the United Nations Resident and Humanitarian Coordinator in Nigeria, Mr Mohamed Malick Fall expressed confidence that with the official launch of the policy, Nigeria has taken a step into its future where hope is turned into action, resulting in inclusive economic growth.

He explained that the policy is the outcome of an ongoing partnership between the United Nations Industrial Development Organisation (UNIDO) and Nigeria, aimed at transforming the country into a beacon of prosperity and a key player in regional and global value chains.

Also, the President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, commended the President over the launch of the policy, noting that manufacturers are focused on the effective implementation of the policy.

He backed the promotion of indigenous entrepreneurship enshrined in the policy, assuring that MAN will give its full support to ensure its successful implementation. Naria had rebounded before after it went to a lower comparison level.

This was in the wake of recession from 2016 to 2017, the naira rose from the ashes to gain more than 30.8% in 2017, moving from 520 to a dollar to 360 in a really short couple of months.

With the current surge in the price of crude oil at the intentional market and mark up in the country’s production capacity, lesser crude oil theft; increased in nonoil export commodities and sustained increase in foreign remittance inflow, the naira could attain N1000 to $1 parity. It’s very doable and achievable.