KEY POINTS
- The naira gained 6.87 percent in 2025, its first annual appreciation since 2012.
- Capital inflows reached nearly $21 billion in the first ten months of 2025, up 70 percent.
- Comercio Partners projects 2026 headline inflation at 14-16 percent in a base-case scenario.
The naira posted its first annual appreciation in 13 years in 2025, gaining approximately 6.87 percent against the United States dollar as deliberate Central Bank of Nigeria reforms reshaped the country’s foreign exchange landscape, investment firm Comercio Partners says in a new report.
The currency started 2025 at around N1,541 per dollar in official markets and closed the year at approximately N1,435, narrowing the gap between official and parallel market rates in the process. Comercio Partners, in its 2026 economic outlook titled “Policy Shock to Structural Reset: Charting a Sustainable Economic Path,” attributes the turnaround directly to CBN action rather than favorable luck.
How the CBN Engineered the Turnaround
A key milestone came on January 28, 2025, when the CBN launched the Nigerian Foreign Exchange Code, adapting global best practices to reduce manipulation and strengthen trust among banks and dealers. The bank also introduced the Electronic Foreign Exchange Matching System to make interbank trading more efficient.
Together, those moves helped attract nearly $21 billion in capital inflows during the first ten months of 2025 alone, a 70 percent surge compared to the same period in 2024. Higher remittances, portfolio investments and oil-related earnings all contributed, while growing domestic refining capacity eased import pressure on the currency.
What This Means for Inflation in 2026
Comercio Partners also addressed Nigeria’s inflation trajectory, noting that 2025 marked a shift from shock-driven price increases to a more stable, policy-shaped environment. The NBS rebasing of the Consumer Price Index in January 2025, shifting the reference year from 2009 to 2024, reset the headline figure from 34.8 percent to 24.48 percent, though the firm clarified that change reflected measurement adjustments rather than an immediate drop in prices.
Looking ahead, the firm projects headline inflation settling in the 14 to 16 percent range in the first half of 2026 under a base-case scenario, assuming policy continuity and FX stability. A best-case outcome of 10 to 11 percent requires a strong agricultural cycle and disciplined coordination. However, policy slippage or renewed FX stress could push inflation back to 18 to 22 percent in a worst-case scenario.
One significant constraint persists. Nigeria’s 2026 debt servicing budget stands at N15.52 trillion, representing roughly 45 percent of projected revenues, squeezing the fiscal space available for infrastructure and social investment even as the broader economic picture brightens.
