Nigeria’s Naira has successfully exited Africa’s top 10 worst-performing currencies list, marking a significant shift after nearly two years of volatility and foreign exchange shortages. This positive development, observed by the end of 2025, is attributed to a combination of improving external reserves, strategic policy reforms, and enhanced liquidity conditions within the Nigerian economy. The analysis, utilizing data from sources like Forbes currency calculator and the Central Bank of Nigeria (CBN), indicates a strengthening of the naira against the dollar. While the exact ranking is not precisely disclosed, by December 31, 2025, the naira stood at N1,436 per dollar, a notable improvement from previous periods. This performance suggests it is now among Africa’s 15-20 weakest currencies, a considerable step up from its earlier position. The naira appreciated by 6.5 percent year-on-year, demonstrating a tangible recovery from N1,535.82 in the same period of 2024. This resurgence is a direct result of targeted economic measures aimed at stabilizing the currency and fostering a more predictable financial environment. The journey for the naira to exit the bottom ten reflects a broader economic strategy implemented by the Nigerian government. The country had been on the list for a substantial period, a consequence of sharp devaluations that created significant challenges for businesses and individuals alike. The exit from this unfavorable ranking in October 2025 and its subsequent sustained position outside the bottom ten highlight a period of renewed economic confidence and stability. What is the significance of the Naira exiting Africa’s top 10 worst currencies list? It signifies a period of economic recovery and improved financial stability for Nigeria. This exit suggests that policy reforms and increased liquidity have positively impacted the naira’s performance, reducing volatility and strengthening its position against other African currencies. The reforms initiated by President Bola Tinubu, including the removal of currency controls and significant devaluations in mid-2023 and early 2024, were pivotal in this transformation. While these initial steps caused considerable stress and pushed the naira to its weakest points, they have ultimately paved the way for reduced volatility and a strengthened external position. This is further evidenced by the rise in foreign-exchange reserves and a healthy current-account surplus, as noted in the World Bank’s Africa Pulse report. The World Bank’s assessment suggests that a more competitive naira will continue to bolster export diversification and manage import levels effectively. However, the report also emphasizes the ongoing need for vigilance regarding price pressures, necessitating continued monetary policy efforts to control inflation expectations. The journey towards sustained economic health requires a balanced approach to currency management and inflation control. Examining the exchange rate trends, CBN data reveals a significant weakening of the average official exchange rate to N1,450/$ in 2024, a stark contrast to N645.10/$ in 2023. However, the naira showed resilience in 2025, trading predominantly between N1,500 and N1,600 per dollar in the first eight months before strengthening to N1,480.30/$ by September 26, its highest in eight months. Crucially, it has maintained a position below N1,500/$ since then, indicating a more stable trading band. Nigeria’s external reserves, a key indicator for managing foreign exchange volatility, also saw a substantial increase, reaching $45.48 billion as of December 30, 2025. This represents a significant jump from $40.88 billion a year prior and is the highest in six years. The apex bank projects further growth to approximately $51.04 billion in 2026, supported by improved FX liquidity, enhanced oil earnings, sovereign bond issuances, and increased diaspora remittances. Before its exit from the bottom ten, the naira was ranked ninth weakest in Africa in September, a slight improvement from its sixth position the previous month. The stability achieved in the exchange rate has been a primary success, with the naira consistently trading within the N1,440–N1,500/$ band. This stability has been credited with boosting business confidence, mitigating imported inflation, and restoring predictability to economic planning and investment. The improved foreign exchange stability has coincided with a notable deceleration in headline inflation. Inflation eased from a high of 24.48 percent in January 2025 to 14.45 percent by November. The average inflation for 2025 also decreased significantly to 20.96 percent, down from 33.2 percent in 2024 and 24.66 percent in 2023. This disinflationary trend is linked to moderating currency pressures, reduced petrol costs, and more stable supply chains, leading to outright price declines in several food items and imported consumer goods. Despite these positive developments, the World Bank advises caution, noting that the disinflationary path remains susceptible to exchange-rate fluctuations, supply chain disruptions, and global market volatility. Therefore, continuous monitoring and adaptive policy measures are essential. Structural developments are also playing a crucial role in supporting the naira. The commencement of operations at the Dangote Refinery, a facility with a massive refining capacity, has significantly reduced the demand for refined product imports and, consequently, FX outflows. Refined product imports dropped to 3.1 million tonnes in the first quarter of 2025. Furthermore, Nigeria’s renewed currency-swap agreement with China facilitates trade settlements in yuan and naira, easing dollar demand. In 2024, Nigeria’s trade with China involved imports worth N14.14 trillion ($9.56 billion) and exports exceeding N3 trillion ($2.03 billion). The CBN anticipates further capacity expansion at the Dangote Refinery, which will continue to reduce import dependence, support reserve accumulation, and reinforce FX stability. While the naira has climbed out of the bottom ten, the continent’s strongest currencies include the Tunisian dinar, Libyan dinar, Moroccan dirham, Ghanaian cedi, and Botswanan pula, showcasing a diverse economic landscape across Africa. The journey of the naira exemplifies the impact of strategic reforms on currency stability and overall economic health.

Read Original

Keywords: how to strengthen naira, what is naira devaluation, naira vs cedi, best african currency for investment, currency trading for beginners nigeria, naira news today, central bank of nigeria update, best african currency 2026, naira exchange rate guide 2026, african currency performance