The value of Nigeria’s money, called the naira, is predicted to become steady compared to the US dollar by the end of 2024. It will be in a strong position by then.
This prediction comes from a new report by a bank in Nigeria known as FSDH Merchant Bank Ltd. The report talks about what needs to be done to make Nigeria’s economy stable in the short term.
The report also says that there will be more US dollars coming into Nigeria. This is because of higher interest rates and more help from Nigeria’s Central Bank.
A big thing helping the naira is the Dangote Refinery. Once it starts working well, it will help reduce the pressure on the money market.
During 2024, the naira found it hard to remain steady against the dollar. The last time it gained value was in March when it was close to 1,300 naira per dollar.
Naira’s Journey Against the Dollar
This year, the naira has lost much of its value compared to the start of the year. In January, 1 dollar was worth 907.11 naira, but now it’s 1,541.52 naira.
After January, the naira’s value dropped quickly, hitting a peak of 1,616.53 naira per dollar in February. In March, it got a little better, ending around 1,303 naira due to good news and feelings in the market.
At the start of April, the naira briefly went below the 1,100 mark, even closing at 1,002 during the second week. However, its value kept dropping, reaching 1,668.97 by the end of September.
Things You Should Know
The report shows that more dollars have been coming into Nigeria over the past months, but there are still problems. Nigeria made a trade surplus of 8.9 billion US dollars in 2024, which is more than the 6.1 billion US dollars of the previous year.
The high interest rates have also brought more investments into the country.
But, according to the report, these extra dollars haven’t made the naira much stronger against the dollar.
What’s Coming Next
- The report says that once the Dangote Refinery starts working fully, it will help a lot with the money issues Nigeria is facing.
- Things like petrol make up 30-40% of what Nigeria buys from other countries. If the refinery works well, Nigeria won’t need to buy as much. This will help make the naira stronger.
- Additionally, a new project called the Naira for Crude Initiative will start on October 1st, 2024, which should also help with the money problems.
The report is hopeful about the naira for the end of 2024. It suggests that we will see a more stable money exchange rate as these changes start to help.