Economy
Exchange rate appreciates by N63 to seven-month high

Nigeria’s exchange rate appreciated significantly in January 2025, gaining N63.72 against the dollar to close at N1,474.78 per dollar on January 31 at the Nigerian Foreign Exchange Market.
According to data from the FMDQ Securities Exchange Limited and the Central Bank of Nigeria, this increase of 4.14 per cent pushes the local currency to the highest level it has reached in seven months, with the last time the currency traded at a similar rate being June 11, 2024, when it stood at N1,473.88/$ in the official market.
The sharp increase has been attributed to policies implemented by the CBN, which have influenced market dynamics and contributed to the currency’s strengthening.
Authorised currency dealers quoted the dollar as high as N1,495.01/$ and as low as N1,447.50/$ at the NFEM.
The naira opened the year at N1,538.50/$ on January 2, 2025, and steadily gained value throughout the month.
By January 3, it had dipped slightly to N1,535.00 before fluctuating within a range that saw it hit N1,560/$ on January 16, marking its highest point for the month.
However, the currency embarked on a more sustained appreciation from the third week of January, closing at N1,531/$ on January 24 and further strengthening to N1,520/$ on January 28.
It continued its climb, settling at N1,506/$ on January 29 and N1,493/$ on January 30 before reaching N1,474.78/$ on the last trading day of the month of January.
The naira also appreciated against the US dollar in the parallel market on Friday, closing at N1,610/$, compared to N1,630/$ recorded on Thursday, representing a N20 increase within a day.
This latest movement reflects the impact of recent monetary and foreign exchange measures introduced by the CBN to stabilise the currency and improve market confidence.
The introduction of the Electronic Foreign Exchange Matching System in December 2024 has played a significant role in this development.
The platform, which operates through Bloomberg’s BMatch system, allows authorised dealers to place anonymous orders into a central limit order book, ensuring transparency and efficient price discovery in the foreign exchange market.
This system has helped reduce market distortions and provided the CBN with enhanced oversight capabilities, making it easier to manage fluctuations in the exchange rate.
Another crucial factor influencing the naira’s recent appreciation is the introduction of the Nigeria Foreign Exchange Code, launched on January 28, 2025.
“The FX Code marks a new era of compliance and accountability. It is not just a set of recommendations; this is an enforceable framework. Under CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions,” CBN Governor Olayemi Cardoso said during the launch of the FX Code.
The FX Code establishes principles for ethical conduct, governance, execution, information sharing, risk management, and settlement processes among market participants.
By aligning Nigeria’s foreign exchange operations with global best practices, the initiative has strengthened investor confidence and contributed to the recent improvements in the currency’s performance.
At the end of 2024, the naira stood at N1,535.00 per dollar on December 31, reflecting the challenges that had persisted in the forex market.
However, the policy interventions introduced by the apex bank in early 2025 have helped stabilise the market, allowing the currency to make significant gains over the past month.
The improved transparency in the foreign exchange system has reduced speculative activities, ensuring that exchange rates better reflect actual market conditions.
However, while the local currency is improving, Nigeria’s foreign exchange reserves experienced a significant decline in January 2025, dropping by $1.11bn over the course of the month.
According to data from the CBN, the country’s reserves stood at $40.88bn on January 2, but by January 30, they had fallen to $39.77bn.
This represents a 2.72 per cent decrease within the one month.
The decline in reserves follows ongoing interventions by the CBN in the foreign exchange market, as well as external debt servicing obligations and capital outflows.
While the naira appreciated significantly within the same month, the reduction in reserves seems to suggest that the CBN may have deployed part of its FX stockpile to stabilise the local currency and manage liquidity in the official market.
At the start of January, reserves remained above the $40bn mark, recording $40.88bn on January 2 and fluctuating within that range for the first half of the month.
By January 10, reserves stood at $40.75bn, and they peaked at $40.96bn on January 6 before beginning a gradual decline.
By mid-month, reserves had dropped to $40.42bn on January 15, further sliding to $40.05bn by January 22.
The steepest declines occurred in the last week of January when reserves fell below $40bn for the first time in months, hitting $39.99bn on January 23 and $39.77bn by January 30.
With the FX reserves at a three-month low, the consistent drawdown indicates heightened FX demand and possible interventions by the monetary authorities to maintain exchange rate stability.
The current decline is similar to the significant drop recorded in April 2024, when reserves plunged by $2.16bn within 29 days.
At the time, Cardoso attributed the decline to debt servicing and other financial obligations rather than interventions to stabilise the naira.
Economy
FG’s deficit spending declines 15% to N908.13bn

The Federal Government’s (FG) deficit spending saw a 15 percent reduction month-on-month (MoM), falling to N908.13 billion in November 2024 from N1.07 trillion in October 2024.
This information was disclosed by the Central Bank of Nigeria (CBN) in its November Economic Report, which noted that the decline was linked to a decrease in capital spending, attributed to delays in the release of capital allocations.
The CBN said: “The overall fiscal balance of the FGN narrowed in November 2024.
“Provisional data showed that the overall deficit contracted by 15 per cent relative to the preceding month but was 18.72 per cent above the target.
“The contraction reflected lower capital spending due, largely, to delay in capital releases.”
The CBN also said that FG’s retained revenue rose to N820 billion while its expenditure fell to N1.7 trillion due to lower capital spending recorded during the review period.
According to the CBN, “FGN retained revenue rose during the review period owing, largely, to higher receipts from FGN’s share of VAT pool and exchange gain.”
Economy
Naira records three-day rise against dollar on black market

The Nigerian naira has shown a trend of appreciation against the dollar for three consecutive days in the parallel foreign exchange market, finishing the week on a positive note this past Friday.
Abubakar Alhasan, a Bureau de Change operator located in Wuse Zone 4, Abuja, told DAILY POST that the naira rose to N1,565 per dollar on Friday, up from N1,570 the previous day.
This represents a daily gain of N5 against the dollar, compared to the N1,570 rate recorded on Thursday.
In total, the naira has appreciated by N15 against the dollar in the black market over the last three days.
However, in the official market, the naira continued to depreciate as of Thursday, according to data from the Central Bank of Nigeria.
The apex bank’s exchange rate data showed that the naira fell to N1,507.88 per dollar on Thursday from N1,504.30 on Wednesday.
Overall, exchange rate movements across FX markets showed that the naira ended the week with mixed sentiments of losses and gains against other foreign currencies.
Economy
Nigeria remains Africa’s largest economy, says World Bank

The World Bank’s Country Director for Nigeria, Dr. Ndiame Diop, has confirmed that Nigeria remains the largest economy in Africa by Gross Domestic Product (GDP) despite the challenges faced by its private sector.
Speaking at the Country Private Sector Diagnostic (CPSD) and Stakeholder Engagement in Abuja yesterday, Dr. Diop said while Nigeria receives far less Foreign Direct Investment (FDI) than its potential warrants—especially in comparison to countries like Indonesia and South Africa—it continues to hold its position as Africa’s biggest economy.
He stated that the CPSD report, set to be released in the coming weeks, will reveal the impact of private sector constraints on economic growth.
He noted that if targeted actions were taken to remove these obstacles, Nigeria’s economic potential would be significantly enhanced.
The current macroeconomic reforms, he explained, have created a favorable environment for such changes. He cited the country’s recent economic stabilization measures, particularly exchange rate market adjustments and improved access to foreign exchange, as critical steps that have already enhanced investment conditions.
Dr. Diop outlined four key sectors where strategic reforms could unlock massive investment and job creation. In the Information Communication Technology (ICT) sector, investment opportunities worth up to $4 billion could be realized, potentially creating more than 200,000 jobs.
In agribusiness, reforms could unlock $6 billion in investment and generate over 275,000 jobs.
The solar photovoltaic (PV) industry holds the potential for $8.5 billion in investment and more than 129,000 jobs, while the pharmaceutical sector could attract $1.6 billion and create more than 30,000 to 40,000 jobs.
For the ICT sector, he identified the high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges—comprising 30 to 70 per cent of broadband rollout costs—as a major barrier. Addressing these regulatory inconsistencies, he argued, would be a game-changer for broadband expansion. He acknowledged that the National Economic Council has recognized this issue and that progress is being made through a World Bank-supported initiative.
Additionally, he pointed to challenges such as vandalism, limited financing for rural broadband expansion, and the need for competitive access to wholesale fiber. He noted that efforts are underway in collaboration with government agencies to resolve these issues, and the World Bank, the International Finance Corporation (IFC), and private investors are prepared to support broadband infrastructure development.
On solar power, Dr. Diop described Nigeria’s energy sector as difficult but noted that renewable energy access, particularly solar PV, has been a bright spot. He explained that private sector investment in renewable energy has historically been hindered by high costs and unviable tariffs. However, blended finance mechanisms supported by the World Bank and IFC have helped bridge this gap, making off-grid solutions more viable.
He pointed to the DES project, which aims to connect 17.5 million households and businesses to solar power, as evidence of growing private sector interest. While the solar industry is expanding, he stressed that reforms to improve Nigeria’s grid electricity supply remain crucial for industrialization.
The Regional Director for Central Africa and Anglophone West Africa at the IFC, Dr. Dahlia Khalifa, stressed the importance of consistency in regulatory policies, particularly in customs duties and revenue agency fees. She noted that unpredictability discourages private sector investment, as businesses rely on stable regulatory environments for strategic planning.
Khalifa also pointed out that while direct job creation in the pharmaceutical sector may be lower compared to other industries, improved healthcare services would yield far-reaching economic benefits.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, commended the IFC for its support across critical sectors, including agriculture, infrastructure, and pharmaceuticals. He highlighted key financing partnerships such as the $1.2 billion facility for Indorama’s fertilizer expansion in Eleme, investments in cocoa processing, and a $70 million SME financing initiative with First City Monument Bank.
He also acknowledged IFC’s latest commitment of $70 million to five Nigerian companies under the Distributive Access to Renewable Energy programme, part of the federal government’s broader Mission 300 initiative.
Edun said President Bola Tinubu’s administration has undertaken bold and necessary reforms that have reshaped Nigeria’s economic landscape. He noted that the removal of wasteful subsidies has strengthened government finances, while improved security has boosted oil production and revenue.
He highlighted that private sector confidence is growing, with new investments beginning to materialize in response to the government’s policy changes.
The minister restated the administration’s commitment to addressing the cost-of-living crisis, particularly through increased food production and affordability measures. He acknowledged that reforms such as the removal of fuel subsidies and the adoption of market-based pricing mechanisms have led to short-term inflationary pressures.
However, he assured that targeted interventions, including direct cash transfers to vulnerable citizens with World Bank support, will help mitigate the impact.
He insisted that the government remains determined to leverage technology to ensure swift, biometric-enabled assistance to those in need.
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