Economists Predict N1,300/$ Naira to Dollar Exchange Rate in 2025, Give Reasons

• A new exchange rate has been projected for 2025 amid growing expectations of the naira's strong performance
• Economists observed that the naira would be helped by higher oil earnings and improved manufacturing
• There was also an optimistic outlook for GDP growth and inflation due to expected increased food production and forex stability

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 Nigerian Economic Summit Group (NESG) has forecasted a massive naira appreciation to an average exchange rate of N1,300 to the US dollar in 2025.

The optimistic projection was stated in its 2025 economic outlook, released on Thursday, January 23, 2025.

According to NESG, the exchange rate forecast was based on higher foreign exchange earnings, driven by increased crude oil sales, revitalised manufacturing output from the oil refining sub-sector, and improved agricultural productivity.

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The group noted that Nigeria, a largely crude oil-based economy, is expected to benefit from stable global demand and enhanced local production, boosting export revenues.

NESG optimistic about Nigerian economy

The private think-tank group projected Nigeria's real GDP growth to reach 5.5% in 2025, contingent on implementing comprehensive stabilisation reforms.

According to NESG, this marks a significant shift from 2024, where only four out of 20 key sectors achieved growth rates exceeding 5%, BusinessDay reports.

Additionally, inflation is expected to decline substantially to 24.7% in 2025, reflecting improved macroeconomic stability.

NESG said its projection is possible if fiscal and monetary policies are effectively coordinated, forex market stability is enhanced, and agricultural output is increased.

Also, improved security in farming regions and better access to farmlands are anticipated to boost food production, reduce scarcity and ease price pressures.

NESG stated:

“Increased food production will alleviate scarcity and help stabilise food prices, which remain a key driver of inflation in Nigeria.”

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NESG on CBN policies

Speaking at the unveiling of the outlook for 2025, Olaniyi Yusuf, Chairman of NESG, highlighted the naira's steep depreciation in 2024, when the official exchange rate fell by 41.4% to close at N1,536.5 per US dollar.

However, he lauded the Central Bank of Nigeria’s (CBN) commitment to policies fostering price discovery and narrowing the gap between official and parallel market rates.

Yusuf said:

“The optimal pathways to stabilisation policies envision a consolidation of monetary, fiscal, trade, and regulatory frameworks, paving the way for economic transformation in the next twelve months."

Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), attended the outlook launch.

Speaking virtually, he expressed confidence in the naira's competitiveness, attributing its stability to recent forex reforms.

FG launches new programme to help farmers

Earlier, Legit.ng reported that the federal government has a new initiative that it believes will help boost food security in the country.

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The initiative, which is the brainchild of the Federal Ministry of Agriculture and Food Security, is called ‘Operation Empty The Stores.’

The Ministry of Agriculture believes the project will help farmers across the country increase food production.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng