The naira weakened by 2.31 per cent, or N38.12, on Monday at the National Autonomous Foreign Exchange Market, closing at N1,690.37/$ compared to N1,652.25/$ at the end of the previous week. Data from FMDQ showed a sharp decline in daily turnover, which stood at $173.14 million, a 42 per cent drop from $296.63 million on Friday.
At the parallel market, however, the naira slightly strengthened, closing at N1,735 to the dollar, an improvement from N1,740 in the last trading session. Despite Monday’s depreciation, the naira had appreciated by 159 basis points by the close of the previous week, when it traded at N1,652.25/$.
The National Autonomous Foreign Exchange Market segment saw increased activity last week, with the average turnover rising by 154.6 per cent to $527.5 million. Meanwhile, the Central Bank of Nigeria’s foreign reserves grew by 0.5 per cent week-on-week to $40.2 billion as of November 13, the highest level since January 2022.
Amid these fluctuations, Veriv Africa, a data insights firm, released its Nigeria Macroeconomic Outlook 2025, predicting continued volatility in the naira’s exchange rate. The report highlighted Nigeria’s failure to meet its crude oil production quota of 1.5 million barrels per day as a key factor disrupting the trade balance and further straining the local currency.
Veriv Africa warned that high inflation and a lack of growth in non-oil exports could exacerbate the naira’s depreciation. The report attributed the currency’s struggles to poor aggregate supply, limited export potential, and insufficient foreign exchange inflows, all of which have constrained external reserves.
The firm suggested that unless foreign exchange inflows and external reserves improve significantly, the naira’s underperformance is likely to persist into 2025. It also noted that the Central Bank of Nigeria’s hawkish monetary policy has not effectively curbed inflation, largely due to supply-side challenges driving inflationary pressures.
Veriv Africa recommended that the CBN pivot to supply-side strategies that encourage productivity while collaborating with federal and subnational governments to strengthen the non-oil sector. The report emphasized the need for investments in quality assurance infrastructure, affordable energy for manufacturing, improved transport and storage systems, and targeted export promotion initiatives to enhance Nigeria’s economic prospects.
While the naira continues to face mounting pressure, analysts agree that structural reforms and strategic investments are critical to reversing its decline and stabilizing the economy.
