Abuja, Nigeria – In a bold move that initially drew criticism, President Bola Ahmed Tinubu’s administration implemented exchange rate reforms in 2024, which have now begun to yield remarkable results. The naira, which initially plunged to ₦1,800 per dollar, has strengthened to ₦1,525/$1, marking a 15.28% recovery in just five months.
From Devaluation to Domination
According to Tanimu Yakubu, Director-General of the Budget Office of the Federation, the reforms have transformed the naira into a competitive currency on the world stage. The unification of Nigeria’s foreign exchange windows and the clearing of over $4 billion in FX backlogs have restored investor trust and created a single, transparent market rate.
Export Boom
The realistic exchange rate has made Nigerian goods more competitive globally, resulting in a significant surge in non-oil exports. From $2.696 billion in H1 2024 to $3.225 billion in H1 2025, non-oil exports have grown by 19.62% year-on-year. Export volumes have also increased from 3.83 million to 4.04 million metric tonnes, indicating that foreign buyers are not only paying more for Nigerian goods but also buying more.
A Perfect Sweet Spot
The current exchange rate regime has created a perfect sweet spot for Nigerian exporters, foreign buyers, and the economy. Nigerian goods are cheaper for foreign buyers, while exporters earn more in naira terms, enabling them to reinvest in value-added processing.
Feedback Loop
The FX reforms have triggered a feedback loop that is driving economic growth. The export boom is pumping foreign exchange back into the system, strengthening the naira without eroding its competitiveness. This, in turn, is boosting investor confidence and attracting portfolio and capital inflows that further bolster reserves.
A New Era of Economic Growth
The success of Tinubu’s FX reforms marks a new era of economic growth for Nigeria. By allowing market forces to determine the exchange rate, the administration has set the stage for a sustainable, export-driven growth path. If Nigeria stays the course, the naira’s recovery will be a testament to the country’s ability to turn its currency into a competitive weapon on the world stage.
Implications for the Economy
The implications of this development are far-reaching. The export boom is expected to drive economic growth, create jobs, and increase foreign exchange earnings. The stability of the naira will also attract foreign investment, boosting investor confidence and promoting long-term economic growth.
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