Nigeria’s currency recorded its first annual appreciation in more than a decade in 2025, signalling a shift toward greater stability after years of volatility, according to investment house Comercio Partners.
In its 2026 economic outlook titled “Policy Shock to Structural Reset: Charting a Sustainable Economic Path,” the firm said the Nigerian naira strengthened by about 6.87 percent against the U.S. dollar during the year — the first annual gain for the currency in 13 years.
The report said the performance reflects a gradual transition of Africa’s largest economy out of a period of turbulence triggered by sweeping economic reforms and the short-term adjustment costs that followed.
Data cited in the report show the naira began 2025 trading around 1,541 per dollar in official markets and closed the year near 1,435 per dollar on December 31.
The strengthening also helped narrow the gap between the official and parallel exchange markets, which had widened sharply in recent years amid foreign-exchange shortages.
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Comercio Partners attributed the turnaround largely to deliberate reforms introduced by the Central Bank of Nigeria aimed at improving transparency and efficiency in the country’s foreign-exchange market.
Among the key measures was the launch of the Nigerian Foreign Exchange Code on January 28, 2025, which adapts global best practices to guide banks, dealers and market participants. The framework is designed to promote transparency, accountability and ethical conduct while reducing opportunities for manipulation in the FX market.
The central bank also introduced the Electronic Foreign Exchange Matching System to streamline interbank currency trading and improve price discovery.
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According to the report, these reforms built on earlier steps taken between 2023 and 2024 to unify and liberalise Nigeria’s exchange-rate system.
For years, the naira had been under persistent pressure due to structural imbalances in the economy, including limited export diversification, strong demand for foreign currency, and supply constraints in official markets.
The reforms helped attract significant capital inflows and improved liquidity in the FX market.
Comercio Partners said Nigeria received nearly 21 billion dollars in capital inflows in the first ten months of 2025, representing a 70 percent increase compared with the previous year.
The inflows were supported by stronger remittances from Nigerians abroad, increased portfolio investments and higher earnings from the oil sector.
The report also noted that improvements in domestic refining capacity helped reduce the country’s reliance on imported petroleum products, easing pressure on foreign-exchange demand.
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At the same time, Nigeria’s external reserves rose by more than 11 percent during the year, strengthening the country’s financial buffers and boosting investor confidence.
“These reforms attracted substantial capital inflows and improved FX liquidity,” the report said, adding that the combined effects helped stabilise the currency and support a stronger current account position.
As a result, the naira recorded gains through much of the year, marking a significant reversal after years of steady depreciation.
Looking ahead, Comercio Partners said early indicators suggest that currency stability could continue in 2026 if the reform momentum is maintained and global economic conditions remain favourable.
The naira opened the new year trading around 1,430 per dollar, reflecting sustained confidence in the country’s foreign-exchange framework.
“Overall, these actions shifted Nigeria’s FX landscape from fragility to resilience, laying a foundation for broader economic recovery,” the report said.
Alongside the currency’s recovery, the firm said Nigeria’s inflation trend also began to change during 2025.
Rather than being driven primarily by sudden economic shocks, inflation dynamics increasingly reflected tighter policy conditions and supply-side adjustments within the economy.
Economists say the combination of exchange-rate stability, stronger reserves and sustained policy reforms could support Nigeria’s efforts to restore macroeconomic stability and rebuild investor confidence in the coming years.
