Market News

The continued rally of the Nigerian naira will be underpinned by a sustained current account surplus, stable or rising reserves, strong structural FX supply, including exports, remittances, and a tight, credible macro policy to curb speculative demand, according to Tilewa Adebajo, chief executive officer of Lagos based consultancy CFG Advisory.

Adebajo, who spoke to this reporter, added that the government will need to ramp up domestic oil production to save the currency, which recorded its best year in 13 years, gaining 7.5 percent last year from global shocks.

“At today’s lower production levels, the naira remains highly exposed to oil prices; a meaningful, sustained drop in Brent would quickly pressure the FX regime,” Adebajo said.

The Nigerian naira is extending its bull run, which began last year, as the local currency has gained roughly seven percent year to date, closing at N1,346.32 on Friday, a rare comeback for a currency that shed 41 percent of its value in 2024.

The naira also decoupled from oil prices, the nation’s main foreign-exchange earner, helped by undervaluation, higher non-oil exports, and the virtual collapse in petroleum products imports.

Adebajo noted that the recent “stability reflects both deeper structural supply, including exports, remittances, more formalised flows and sizeable, potentially reversible portfolio or carry inflows.”

The investment banker cum economist pointed to the role diaspora remittances play in stabilising the currency. Nigeria aims to attract $1 billion in monthly inflows, according to Yemi Cardoso, central bank governor. This is after remittances surge to nearly $25 billion.