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Naira defies CBN’s forex reforms, tumbled 41% in 2024
By Kayode Sanni-Arewa
The official exchange rate between the naira and the United States dollar ended in 2024 at N1,535/$, an analysis of data from the Central Bank of Nigeria has shown.
This was a 40.9 per cent depreciation over the year when compared to the official rate at the close of 2023, which stood at N907.11/$.
The significant depreciation comes amid the CBN’s introduction of several foreign exchange policies aimed at enhancing market transparency and attracting foreign investors.
These measures included reforms such as the unification of FX windows under the Nigeria Foreign Exchange Market and the introduction of the Nigerian FX Code, which mandated ethical conduct and governance among market participants.
On the parallel market, where the naira trades unofficially, the currency exchanged at N1,660/$ at the end of 2024.
This represents a 26.8 per cent depreciation from N1,215/$ recorded at the close of 2023.
The year saw the CBN aggressively expand market-friendly policies to stabilise the FX market and attract foreign investment.
This year, the CBN announced that it had successfully cleared all valid FX backlogs, fulfilling a key commitment by Governor Olayemi Cardoso to address the inherited $7bn in outstanding claims.
In May 2024, the CBN issued revised guidelines to strengthen the operations of Bureaux de Change operators in Nigeria.
The guidelines define permissible activities for BDCs, such as sourcing foreign currency from specified entities and selling foreign exchange for purposes like Personal Travel Allowance and Business Travel Allowance.
The CBN automated foreign currency trading to replace the over-the-counter system, improving market efficiency and oversight.
Another key intervention was the direct selling of FX to BDCs at different times this year.
The apex bank also sold FX on the official market but at a minimal level.
Also, the Nigerian FX Code, introduced in October, set ethical and operational standards for market participants, with mandatory compliance deadlines by the end of 2024.
To bolster foreign reserves and reduce pressure on the naira, the apex bank initiated the Voluntary Disclosure and Repatriation Scheme, allowing individuals and businesses to deposit and invest internationally tradable foreign currencies in designated domiciliary accounts.
There was also the Nigeria Foreign Exchange Market framework, which consolidated all FX trading windows into a unified market to improve transparency and liquidity.
BDC operators were temporarily allowed direct access to buy FX from authorized dealers with a weekly cap of $25,000, a measure implemented during the festive season to meet heightened demand
Despite these interventions, the naira faced immense pressure from limited foreign exchange inflows, the widening gap between official and parallel market rates, and lingering effects of capital flight by foreign investors.
The World Bank listed the naira among the worst-performing currencies in Sub-Saharan Africa in 2024.
The depreciation of the naira is attributed to several factors, including surging demand for United States dollars in the parallel market, limited dollar inflows, and delays in foreign exchange disbursements by Nigeria’s central bank.
The World Bank’s report further highlights that demand for dollars, driven by financial institutions, non-financial end-users, and money managers, has exacerbated the pressure on the naira.
However, the International Monetary Fund has reported that the naira is showing signs of stabilisation, attributing this to recent interest rate hikes and efforts by the Central Bank of Nigeria to address foreign exchange backlogs.
President Bola Tinubu, during his budget presentation speech, said the proposed budget was based on the projections that inflation will decline from the current rate of 34.6 per cent to 15 per cent next year.
He projected that the exchange rate will improve from approximately N1,700 per US dollar to N1,500 and a base crude oil production assumption of 2.06 million barrels per day.
The President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, earlier said the N1,500/$ peg in the 2025 Appropriation Bill was within reach on the back of recent foreign exchange reforms being pushed by the CBN.
However, Fitch Ratings, a global credit rating agency, noted that a larger-than-expected budget deficit in 2025 could lead to further naira depreciation, higher inflation, and increased borrowing costs, ultimately threatening the government’s reform agenda.
The Presidency has clarified that former Finance Minister Wale Edun and former Housing Minister Ahmed Musa Dangiwa voluntarily resigned their positions before President Bola Tinubu announced their replacements on Tuesday, dismissing insinuations that the two ministers were fired.
Edun, who turned 70 on Monday, submitted his resignation letter on his birthday, citing health reasons.
He paid a valedictory visit to the President at the Villa on Tuesday, holding an hour-long discussion before departing to focus on his private businesses.
“It has been a pleasure and privilege to serve your administration and the Renewed Hope Agenda,” Edun wrote in his resignation letter, adding that Nigeria had emerged stronger and more internationally respected under Tinubu’s leadership.
Dangiwa similarly tendered his resignation and thanked the President for the opportunity to serve in the Federal Executive Council.
Edun, an economist and investment banker, served as Lagos State Commissioner for Finance between 1999 and 2004 under then Governor Tinubu.
He co-founded Investment Banking and Trust Company Limited, now Stanbic IBTC, in 1989, and later founded the Chapelhill Denham Group in 1994.
Dangiwa, an architect, previously served as Managing Director of the Federal Mortgage Bank between 2015 and 2022 and as Secretary to the Katsina State Government before his ministerial appointment in August 2023.
Tinubu expressed appreciation to both men for their contributions to his administration’s economic reform programme and urged the incoming Finance Minister, Taiwo Oyedele, to consolidate ongoing reforms with renewed focus and discipline.
The President is expected to shortly transmit the name of Muttaqha Rabe Darma, also from Katsina, to the Senate for confirmation as the new Housing Minister.
The crisis rocking the Peoples Democratic Party took a fresh turn on Wednesday as its factional national chairman, Tanimu Turaki, was arraigned before a High Court in the Federal Capital Territory.
Turaki appeared before the court sitting in Maitama over allegations of giving false information to the police. The case adds another legal twist to the ongoing internal struggles within the party.
The senior lawyer, who holds the rank of Senior Advocate of Nigeria (SAN), pleaded not guilty when the charge was read to him in open court.
Proceedings were brief but closely watched, given his position and the tension within the party.
The prosecution, led by the office of the Inspector-General of Police, told the court that the defendant had written a petition dated October 5, 2022. In the said petition, he allegedly accused one Saidi Mainasara, with “intent to trigger police action” against him. The authorities argue that the information provided in that petition was false and misleading.
Following his plea, the court considered his bail application. The presiding judge granted him bail in the sum of N100 million. The court also set conditions to ensure his appearance during trial, though details of the sureties were not extensively argued in open court.
After granting bail, the court adjourned the matter to a later date for continuation of hearing. Legal teams on both sides are expected to prepare for a more detailed argument when proceedings resume.
Former President Goodluck Jonathan meets President Bola Ahmed Tinubu
President Bola Ahmed Tinubu on Wednesday met former President Goodluck Jonathan at the Presidential Villa.
This was disclosed by Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga.
A reason for the meeting has not been disclosed as at the time of filing this report.
Former President Goodluck Jonathan meets President Bola Ahmed Tinubu
Meanwhile, Jonathan has responded to erstwhile Vice President Atiku Abubakar over his submission on his competency during his time in office.
Atiku, during a live television interview, claimed that Jonathan made many mistakes while he was President because he was inexperienced.
“I know Goodluck Jonathan very well. He is a decent young man, but also inexperienced, and I believe that contributed to his inability to manage the affairs of the country, particularly when he was faced with challenges,” he said.
Reacting to Atiku’s statement during the 2025 Association of Retired Career Ambassadors of Nigeria awards ceremony in Abuja on Monday, Jonathan said no one who becomes a governor or president would say he did not make mistakes.
He defended his administration, adding that he did his best while in office.
Jonathan said: “So not too long ago, a very senior politician said, ‘Oh, Jonathan was too young and probably that’s why he made mistakes.’
“If I made mistakes, yes, nobody who becomes a governor or a president will say you did not make mistakes. Even when you promote yourself to the level of a god, you become a deity.
“All human beings must make mistakes. I became president in 2010 at the age of 53. I left in 2015 at the age of 58, and they say I was too young. Must it have been 100 years before I ran the affairs of the state?”
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