Expert Predicts Dollar To Crash Below N1,000, Gives Reasons

• Tilewa Adebajo, CEO of The CFG Advisory, has predicted that the naira exchange rate could recover below N1,000 or depreciate further in 2025
• He, however, noted that the recovery of the naira will not be straightforward and will be determined based on federal government policy
• The naira in the official and unofficial foreign exchange markets continues to trade above N1,500

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The future of the naira is said to hinge on the Nigerian government addressing its rising debt profile, boosting oil production, and leveraging strategic asset sales.

Tilewa Adebajo, the Chief Executive Officer of The CFG Advisory, stated this in his 2025 economic forecast titled, ‘From Reform Fatigue Quagmire to Sustainable Growth".

According to Adebajo, the naira exchange rate against the dollar could be sub-1000/$ or north of 2000/$, and it is all in the hands of the government fiscal discipline and policy implementation.

Read also

Lagos State government gives employers deadline to submit tax returns

He noted that Nigeria's ambitious 18-month economic reform programme, aimed at guiding the nation toward sustainable growth, has left the country precariously poised between progress and peril.

"Due to poor implementation and a misaligned sequence of policy priorities," he stated, "the programme has faltered in achieving its lofty objectives, leaving the economy stuck in stagflation and households grappling with diminished purchasing power."

Adebajo also stressed that the naira’s devaluation from about N450 to as high as N1,700 per US dollar, coupled with the removal of fuel subsidies, has led to skyrocketing inflation, eroding household purchasing power and driving up interest rates for businesses.

BusinessDay reports that he also described the current state as a “quagmire of reform fatigue,” where “the government has put the cart before the horse,” jeopardising any prospects of immediate recovery.

The CEO said:

"Adding to the challenges, Nigeria’s debt burden has exceeded $100 billion, with debt servicing costs surging from N8 trillion in 2024 to an astounding N16.3 trillion in the proposed 2025 budget.

Read also

Hardship: Tinubu sends fresh message to Nigerians as he releases video, "we have to move forward"

“Debt servicing now surpasses the combined budgets allocated for defense, security, infrastructure, education, and health,” underscoring the severity of the situation.

"The irony is unmistakable: funds saved from the removal of fuel subsidies are being redirected to debt servicing instead of being invested in critical capital projects that could drive economic growth."

Adebajo observed:

“The loss of $300 billion in GDP over eight years is a testament to the prolonged policy inconsistency and the failure to implement a coordinated economic strategy."

Solutions to economic challenges

Adebajo proposed bold measures to address these challenges, including restructuring Nigeria’s capital base by selling joint venture oil assets, which could generate $30–$50 billion.

Such a move, he argued, would reduce debt, stabilize the foreign exchange market, and improve the naira’s value.

He also stressed the need for a coordinated policy framework focusing on inflation control, lower borrowing costs, and an investment-friendly environment to spur growth.

Read also

Naira gains N125/dollar after CBN launches platform for forex trading

While the oil and gas sector showed promise with a 10.2% GDP growth in 2024, Adebajo called for increased investments to sustain optimal production.

He said:

“Replicating the $22 billion annual investment levels of 2009 and 2014 could revitalise the sector and contribute significantly to economic recovery."

Adebajo cautioned that the nation faces a critical juncture, with three consecutive years of deficit budgets and cumulative deficits surpassing N36 trillion.

He concluded.

“The sincerity and competence of the government in implementing coordinated economic policies will decide whether Nigeria overcomes this reform fatigue or falls further into economic despair.”

Naira to dollar exchange rate

Ealier, Legit.ng reported that the Nigerian Naira experienced a slight depreciation against the US dollar to N1,543.03.

The 42-day window, introduced in December 2024 to stabilise the naira, is set to close on January 19, 2025.

The expiration of the EFEMS window for BDCs is expected to test the resilience of the naira in the coming weeks.

Source: Legit.ng