The Nigerian Naira staged a remarkable comeback in January 2025, closing the month at N1,475 to the US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM). This represents a significant appreciation from December’s closing rate of N1,535/$1, marking the Naira’s strongest performance since June 2024.
While this month-on-month gain of 3.91% offers a glimmer of hope, it’s crucial to remember that the foreign exchange market remains inherently volatile. External factors like global oil prices, the flow of remittances into the country, and investor sentiment towards Nigeria’s economy will undoubtedly continue to influence the Naira’s trajectory.
Compared to January 2024, when the NAFEM rate closed at 1,455.59/$1, the Naira has seen a modest year-on-year appreciation of approximately 1.33%. However, these figures tell only part of the story. Throughout January 2025, the Naira experienced a rollercoaster ride, trading between N1,560 and N1,506 to the dollar for most of the month. It wasn’t until the final days that the currency began its impressive climb, culminating in the January 31st close at N1,475/$1.
The Central Bank of Nigeria (CBN) has been actively working to stabilize the Naira through a series of interventions and policy adjustments. These efforts include tightening regulations on Bureau De Change (BDC) operators to curb illicit activities and injecting much-needed dollar liquidity into the official market.
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Recently, CBN Governor Olayemi Cardoso emphasized the importance of adhering to the newly launched Nigeria Foreign Exchange (FX) Code. “This is not just a set of recommendations; this is an enforceable framework,” Cardoso stated, underscoring the severity of penalties for any violations. “The FX Code marks a new era of compliance and accountability in Nigeria’s foreign exchange market.”
Furthermore, the CBN recently announced a waiver of the 2025 non-refundable annual license renewal fee for BDC operators. This move, aimed at easing the financial burden on these businesses, is part of the CBN’s broader strategy to support the transition to a more robust and transparent regulatory framework for BDC operations.
While the Naira’s recent strength is encouraging, it’s crucial to maintain a cautious optimism. The journey towards a truly stable currency will require sustained and coordinated efforts from the government, the private sector, and international stakeholders. By fostering a more predictable and transparent foreign exchange market, Nigeria can unlock its economic potential and attract much-needed foreign investment.
