The Nigerian naira is on course to record its strongest annual gain against the US dollar since 2018, despite concerns that the country’s 2027 general election could put pressure on the currency, Bloomberg has reported….
The Nigerian naira is on course to record its strongest annual gain against the US dollar since 2018, despite concerns that the country’s 2027 general election could put pressure on the currency, Bloomberg has reported.
The naira has strengthened significantly this year, reversing some of the sharp losses recorded following the foreign exchange reforms introduced under President Bola Tinubu.
The currency’s improved performance has been supported by increased foreign-exchange liquidity, tighter monetary policy and measures by the Central Bank of Nigeria aimed at improving the functioning of the FX market.
The naira’s recovery has also boosted returns for foreign investors holding Nigerian assets, as currency stability reduces the risk of losses when investments are converted back into dollars.
However, the approaching 2027 election is emerging as a potential test for the currency. Election periods in Nigeria have historically been associated with increased government spending, heightened demand for foreign exchange and greater uncertainty among investors.
Despite those concerns, Bloomberg’s latest assessment suggests the naira could maintain its gains and post its best annual performance in eight years.
The development represents a significant turnaround for the currency, which suffered heavy depreciation in 2023 and 2024 following the removal of the naira’s long-standing exchange-rate controls and subsequent FX market turbulence.
The stronger naira could ease pressure on import costs and inflation, while also improving confidence in Nigeria’s broader economic reform programme.
The outlook, however, will depend on the sustainability of the Central Bank’s FX policies, foreign-exchange supply, inflation trends and how the political environment develops ahead of the 2027 elections.
