₦airaland Forum

The naira-dollar exchange rate, which stabilised in the official foreign exchange (FX) market between July and December 2024, is projected to maintain its stability through 2025.

This optimistic outlook comes from Muda Yusuf, director and CEO of the Centre for the Promotion of Private Enterprise (CPPE), who shared his insights in an economic review for 2024 and a forecast for 2025.

“The naira experienced a significant period of calm in the latter half of 2024, following a turbulent 18 months. Regulatory reforms and periodic interventions by the Central Bank of Nigeria (CBN) played a pivotal role in achieving this moderation in exchange rate volatility,” Yusuf explained. By the close of the year, the official exchange rate at the Nigerian Foreign Exchange Market (NFEM) stood at N1,537, a modest rise from the average rate of N1,455.59 in January 2024 and N907.1 in December 2023.

Several factors underpin this stability and support a positive outlook for 2025. Yusuf highlighted critical developments such as Nigeria’s foreign reserves exceeding $40 billion and anticipated further improvement in reserve accretion.

“This progress is largely driven by increased inflows from International Money Transfer Operators (IMTOs) and robust diaspora remittances,” he said.

Additionally, measures like the $2 billion Eurobond proceeds, a $500 million domestic dollar bond, and the clearance of $7 billion in legacy forex obligations by the CBN are expected to bolster the central bank’s capacity to intervene in the forex market effectively.

Another game-changer is the import substitution impact of the newly operational Dangote and Port Harcourt refineries. “With these refineries easing the demand pressure on forex for fuel imports, the naira will benefit from reduced dependency on external currency flows,” Yusuf observed. He also noted a gradual recovery in the non-oil export sector, which could contribute positively to foreign exchange inflows.

Inflation, which soared to 34.2 percent in November 2024, is expected to moderate slightly in 2025. Yusuf attributed this potential easing to a reduction in exchange rate volatility, geopolitical shifts following Donald Trump’s return to the U.S. presidency, and a possible stabilisation of global oil markets.

“The rebound of the naira and the easing of energy costs could provide much-needed relief to the inflation trajectory,” he said. Additionally, the base effect of elevated inflation in 2024 could make 2025 figures appear comparatively moderate.

Despite these optimistic projections, Yusuf cautioned that certain inflationary pressures may persist in 2025. “Challenges such as high energy costs, transportation expenses, and insecurity affecting agricultural output will continue to influence the inflation landscape. Climate change, flooding, and global supply chain disruptions will also remain factors to watch,” he warned.

Reflecting on the impact of inflation in 2024, Yusuf described its far-reaching consequences. “Rising costs of living worsened poverty, while businesses faced escalating operational expenses and shrinking profit margins. Weak consumer purchasing power meant that businesses could not pass on the additional costs to consumers,” he stated. This economic strain also led to elevated risks of loan defaults, skyrocketing project costs, and abandoned initiatives across various sectors.

As Nigeria navigates the complexities of a dynamic global and domestic economy, the projected stability of the naira offers a silver lining. “The groundwork laid in 2024 through reforms, interventions, and strategic measures provides a solid foundation for economic resilience in 2025,” Yusuf said, stressing the importance of maintaining and enhancing these efforts in the coming year.

PsaIm:
The currency will bounce back and God i will put to shame those wishing the country evil.

God will smile on Nigeria again. Amen

PsaIm:
The currency will bounce back and God i will put to shame those wishing the country evil.
God will smile on Nigeria again. Amen

PsaIm:
The currency will bounce back and God i will put to shame those wishing the country evil.

God will smile on Nigeria again. Amen

Validated:
Noone is wishing Nigeria evil. Tinubu is the one who is not capable of differentiating left from right, playing Nigeria economy on Trial & Error. Yet pushing propaganda to your likes to "swallow, hook, line and sinkers, with the fisherman's boot".
No government world over would stupidly implement duo of subsidy removal without plan and deregulation Floating of its national currency at the same time. Only a mad man does that. If such was to be done in Asia, South America or Europe, some people who are also mad would take him down immediately.

PsaIm:
The currency will bounce back and God i will put to shame those wishing the country evil.

God will smile on Nigeria again. Amen

Great100000:
Source: https://businessday.ng/news/article/why-naira-will-remain-stable-in-2025-muda-yusuf/

VirginOlosho:
Naira has no business appreciating if it won't reflect on the prices of goods. It can climb up to 2000 for all I care

ElSudani:
You are talking nonsense. I bet you didn't listen to his media chat. Perhaps that could have given you a little insight into what he is doing to put Nigeria back on track.
How many countries in the world spend 40% of its revenue to subsidize just one commodity?
Nigerians should praise him for taking a bold step to save the country from bankruptcy.

Great100000:
Source: https://businessday.ng/news/article/why-naira-will-remain-stable-in-2025-muda-yusuf/

sparko1:
Look at this one, seriously, same way some Nairalander were happy about the new naira note that was destroying the economy, Nigerians have this selfish blood that only care about themselves.

You are angry because farmers can earn a living, you expect the government to open border so farm produce can be cheap not minding the economy disadvantage or the effect on local production.

If you want to make money in agriculture, start your own farm, Nigeria has enough land, stop being lazy and bitter.🙄🙄

Padipadi:
People are just managing.

GboyegaD:
Please, stop being silly. What local production are you talking about here? Or farmers can't sustain a quarter of the economy and until real industries farming is practiced, closing the borders will only worsen the inflation situation.

docdes:
Away with your negative energy. Always running when no one is chasing you due to a guilt-ridden soul. Remember where your evil party picked the Naira from.