Nigeria Economic Update, Issue 17

According to foreign exchange market data from the Central Bank of Nigeria (CBN), the naira averaged ₦1,361.22 per US dollar in April 2026, representing a 1.3% month-on-month appreciation from ₦1,379.32 per US dollar recorded in March. This follows a period of depreciation linked to global geopolitical tensions, particularly the United States-Israeli/Iran war, which began at the end of February 2026. During that period, the naira weakened by 1.7%, falling from an average of ₦1,355.53 per US dollar in February to ₦1,379.32 per US dollar in March. The modest recovery in April coincided with a 1.7% decline in foreign reserves, from US $49.24 billion at the end of March to US $48.37 billion as of 29 April, suggesting that reserves may have been utilised to support the currency. While the recent exchange rate appreciation is a positive development, the sustainability of the naira’s strength will depend on consistent foreign exchange inflows and favourable macroeconomic conditions. To consolidate these gains, policymakers should prioritise measures aimed at strengthening foreign exchange supplies, particularly by enhancing export capacity and attracting stable capital inflows. This will require targeted investments in export-enabling infrastructure, including roads, ports, and storage facilities, alongside sustained support for domestic manufacturing. In addition, maintaining transparency in foreign exchange market operations and ensuring timely access to foreign currency will be critical to strengthening investor confidence and promoting market stability.