The naira has taken a sharp dive, but not everyone is mourning. At ₦1,500 to the dollar (down from ₦460) a new wave of economic opportunities is unfolding in Nigeria. While some see a crisis, others, like forex traders and exporters, are cashing in. But what does this mean for Nigeria’s long-term economic future?
A Currency Crash or a Competitiveness Boost?
According to a Chatham House report, Nigeria’s economic competitiveness is at a 25-year high, all thanks to the naira’s hefty 70% devaluation. This move has supercharged exports, giving Nigerian goods an edge in the global market. In 2024 alone, Nigeria recorded a staggering ₦16 trillion trade surplus, one of the highest on record.
Exporters like Amina Yusuf, who manages a thriving factory in Lagos, are celebrating as international demand for Nigerian products surges. Lower export prices have made Nigerian goods highly attractive, bringing in foreign capital and strengthening key industries.
The Forex Traders’ Goldmine
For forex traders like Chukwuma Okoye, the currency plunge has been a jackpot. With higher exchange rates driving increased trading volumes, Nigeria’s forex market is more lucrative than ever.
However, Chatham House warns that allowing the naira to appreciate significantly could undermine these gains. Keeping the naira competitive is crucial for sustaining the current economic momentum and ensuring long-term stability.
Foreign Investment: The Slow but Promising Climb
Despite these gains, foreign direct investment (FDI) remains a weak spot. With only £1.5 billion trickling in annually, Nigeria is still struggling to attract large-scale foreign capital. However, economists believe the naira’s devaluation could change this. By making investments in Nigeria more affordable for foreign investors, the country is starting to woo back capital.
Reforms and Inflation: Striking a Balance
Economic reforms under President Bola Tinubu have played a crucial role in reshaping Nigeria’s financial landscape. The scrapping of fuel subsidies in 2023 and the devaluation of the naira helped reduce the fiscal deficit from 6.4% of GDP to 4.4% by early 2024.
But these changes came at a cost. Inflation surged to a 30-year high of 34% before cooling to 24% in early 2025. In response, the Central Bank of Nigeria (CBN) raised interest rates to a record 27.5% to curb rising prices.
The Road Ahead: Challenges and Opportunities
While the naira’s depreciation has boosted exports and narrowed the fiscal deficit, challenges remain. Nigeria still grapples with high inflation, weak infrastructure, and a massive 129 million people living in poverty.
The Chatham House report suggests that improving deposit rates to match borrowing costs could help stabilize inflation, promote financial inclusion, and encourage domestic savings. Additionally, continued investment in infrastructure and industrial growth will be crucial for locking in Nigeria’s economic gains.
Conclusion
The naira’s tumble may have sparked concerns, but it has also unlocked new economic possibilities. If Nigeria can balance currency competitiveness with structural reforms, the country could emerge stronger than ever. As the world watches, Nigeria’s economic transformation continues to unfold, proving that even in currency turbulence, there’s room for growth.