A member of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC), Professor Murtala Sagagi, has projected that the naira will continue to appreciate and could strengthen to about N1,400 to the dollar before the end of the year.
He based the outlook on recent increases in daily crude oil production, fresh capital inflows, and an improved balance of payments position.
Sagagi made this projection in his personal statement at the MPC’s July meeting, the details of which were released by the apex bank on Friday. He noted that structural reforms implemented over the past three decades had achieved limited success in overcoming rigidities within the economy, citing the country’s limited diversification and the government’s heavy reliance on debt as key vulnerabilities to global shocks and commodity price fluctuations.
“Previous structural reforms implemented over the last three decades have recorded limited successes in overcoming structural rigidities in Nigeria. Limited economic diversification and overreliance on debt by the government have worsened the vulnerability of the economy to shocks and fluctuations in global commodity prices. Since mid-2023, unlocking opportunities for economic diversification and associated welfare improvement has remained the ultimate goal of the current structural reforms,” he said.
He added that despite the removal of fuel subsidy and liberalisation of the exchange rates, government spending had continued to rise. “However, even with the removal of fuel subsidy and liberalisation of the exchange rates, the appetite for unfettered spending by the government has grown even stronger. In the first quarter of 2025, the country has witnessed an increase in total public debt from N144.67 trillion as of December 31, 2024, to N149.39 trillion as of March 31, 2025. The country’s debt profile is deteriorating and thus shrinking the fiscal space due to huge debt service cost.”
Also supporting the outlook for exchange rate stability, another MPC member, Bala Moh’d Bello, in his personal statement, highlighted improved conditions in the external sector. He said the naira had remained relatively stable, reflecting tighter liquidity conditions, growing investor confidence, and effective implementation of adjustments to the foreign exchange management framework.
He stated, “Speculative activities in the FX market have declined significantly, fostering greater transparency and promoting market-based price discovery. This stability is expected to persist over the medium term, supported by rising external reserves which stood at $40.11 billion as of July 18, 2025, equivalent to approximately 9.5 months of import cover.”
