Matthew Ryan, Head of Market Strategy at Ebury, forecasts further depreciation of the Naira in 2025, though less severe than the declines seen in 2023 and 2024.
In an interview with CNBC Africa, Ryan highlights Nigeria’s foreign reserves, oil prices at $74 per barrel, and a narrowed gap between official and parallel market exchange rates as factors providing some stability to the currency.
Ryan explains, “We expect continued devaluation of the Naira, but at a smaller scale. The gap between official and parallel exchange rates has shrunk significantly, down to about 5%, and foreign exchange reserves remain strong, covering 16 months of imports. These factors allow the Central Bank of Nigeria (CBN) room to intervene and stabilize the currency.”
Ebury’s 2025 outlook for seven African currencies presents a mixed forecast. According to their report, four currencies are projected to either remain stable or appreciate, while three—including the Nigerian naira, Angolan kwanza, and Ghanaian cedi—are expected to lose value. The analysis is based on each country’s economic fundamentals and commodity price projections.
The Naira is projected to lose 2.4% of its value in 2025, settling at approximately N1,700 to the dollar.
Naira’s 2024 Performance Shows Sharp Decline
The Naira has experienced significant volatility throughout 2024, starting the year at N907 per dollar and closing the third quarter at N1,541, marking a nearly 70% depreciation in the official market. The parallel market shows even greater instability, with the Naira trading as high as N1,700 per dollar in September.
