Meet Andy. 
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Andy owns an electronics business in Lagos and imports most of his supplies. The naira’s volatile performance over the years has shaped how he runs his business; continuous depreciation has led to higher procurement costs, forcing him to raise the prices of his goods and watch his profits shrink. 
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Projections for the naira’s 2026 performance could be the turning point for his business. The Nigerian Economics Summit Group (NESG) projects that the exchange rate will average ₦1,480 per US dollar. At the same time, Veriv Africa’s Macroeconomic Outlook offers a slightly more bullish forecast, predicting that the naira will remain below ₦1,500 and average around ₦1,471 per US dollar. If the exchange rate remains below ₦1,500, Andy will finally enjoy stability in his business. He will be able to plan his stock more accurately, negotiate better deals, and stabilise product prices for his customers. 
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Throughout 2025, Nigeria’s exchange rate found a level of stability, hovering between  ₦1,450 and ₦1,650 per US dollar. This stability was driven by a cooling import demand and the steady increase in foreign reserves. As we move further into 2026, projections for the naira remain cautiously optimistic. However, these forecasts remain tethered to the volatility of the global oil market, foreign exchange earnings, and inflationary pressures. The shadow of the Middle East conflict looms large; global oil price shocks could disrupt the naira’s stability so far. Given this, Andy’s business in 2026 still stands on shaky ground. Can the naira withstand these external pressures and meet 2026 projections?
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Nigeria’s Forex History 

Once upon a time, the naira held more ground than the US dollar. Between 1972 and 1985, the naira hovered between ₦0.55 and ₦0.647 per US dollar, bolstered by the 1970s oil boom, robust agricultural exports, and a stable economic climate. In response to crashing oil prices and mounting external debt, Nigeria introduced the Structural Adjustment Program (SAP) in 1986. This marked the naira’s first fall, devaluing it to ₦2 per US dollar and later to ₦4 per dollar. By 1993, the naira hit its first double digit: ₦17.30/$1. The decline continued as Nigeria implemented different exchange rate regimes: fixed, floating and managed floating to stabilise the naira. 
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Nigeria adopted a floating exchange rate regime in 1995, and the naira dropped to ₦21.89. By 2001, the naira hit triple digits, standing at ₦106/$1. In 2016, Nigeria adopted the managed floating exchange rate regime, and the Central Bank of Nigeria (CBN) introduced the Investors’ and Exporters’ Foreign Exchange window, with the rate floating between ₦280 and ₦315 per US dollar. 
 

By 2023, the CBN shifted to the free buyer, free seller model, to let market forces determine the rate, leading to a further devaluation to an average of ₦632 per US dollar. Looking back, the naira never truly recovered from the initial 1986 devaluation; instead, it has been on a journey of adjustment and management since then. 
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In 2026, the naira averages ₦1,387.96, outperforming the ₦1,477 Q1 projections. While the currency is tracking well with Veriv Africa’s projections, the naira’s history reminds us that stability is often fragile. The performance so far aligns with projections, but with global oil markets in turmoil, the risks remain high.
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What Will Influence The Naira’s Performance in 2026?

Nigeria’s exchange rate remains heavily influenced by global oil prices, persistent import dependence, and the performance of both oil and non-oil exports. Currently, escalating military tensions between the US, Israel and Iran have pushed global oil prices above $100 per barrel. Nigeria could see a positive fiscal impact from this hike, especially as threats to the Strait of Hormuz stunt global oil supply. If Nigeria can successfully ramp up production to capitalise on this supply gap, the resulting influx of foreign exchange could significantly strengthen the naira. However, this global windfall is a double-edged sword. Domestically, fuel prices have already surged to ₦1,300 per litre, with the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) warning of a climb to ₦2000 should the conflict persist. The increasing fuel prices will trigger a cascade of higher transportation and energy costs, raising input expenses for businesses and ultimately driving up general inflation. This internal pressure threatens to offset Nigeria’s recently cooling inflation rates, potentially stalling the country’s economic progress. Ultimately, while the naira is relatively stable, these external shocks and the resulting domestic inflationary pressures remain primary risks that could undermine the 2026 projections.

Conclusion

For Nigerians like Andy, these figures represent potential business growth, stable pricing, and a reprieve from years of volatility. Beyond individuals, a stable naira will boost investor confidence, sparking investments across various sectors of the economy. However, as its history teaches us, the only constant in Nigeria’s economy is change. With the Middle East conflict threatening to push fuel prices to ₦2000, the naira’s performance remains tightly tethered to global oil shocks and internal inflationary pressures. 
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How well the currency holds its ground in 2026 will depend largely on the management of our internal resources and continued external reserve strength. There is still room to hope: in 2025, Nigeria earned a record $6.1 billion in non-oil exports, a momentum that is expected to carry through 2026. Furthermore, foreign reserves hit $50.45 billion, providing the nation with a sturdy buffer. When considering all these factors, the road ahead for the naira and Nigerians remains one of cautious optimism. 

References

Aliyu, A. (2026, March 10). Petrol Hits N1,300/L As Dangote Increases Price. Daily Trust.

https://dailytrust.com/petrol-hits-n1300-l-as-dangote-increases-price/
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Crude Oil Prices (1946-2026). (2026). Macro Trends. 

https://www.macrotrends.net/1369/crude-oil-price-history-chart
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Exploring the History of Dollar to naira Conversion: Key Milestones and Changes. (2023, July 8). Monierate. https://monierate.com/blog/exploring-the-history-of-dollar-to-naira-conversion-key-milestones-and-changes

Ibemere, D. (2026, January 15). NESG Releases naira to Dollar Exchange Rate Projection for 2026. Legit NG. https://www.legit.ng/business-economy/economy/1692603-nigerian-economic-summit-group-releases-naira-dollar-projection-2026/

Idenedo, A. (2026, January 24). Non-oil exports: Nigeria’s fast track to growth and fX  stability. nairametrics. https://nairametrics.com/2026/01/24/non-oil-exports-nigerias-fast-track-to-growth-and-fx-stability/

Naira to Dollar exchange rate record over 51 years (1972-2023). (2023, July 19). Spark Gist. 

https://sparkgist.com/naira-dollar-exchange-rate-record/

Olaleye, A. (2026, February 17). Naira Strengthens Against Dollar: What the Exchange Rates Mean for You in 2026. Connect Nigeria. https://articles.connectnigeria.com/naira-strengthens-against-dollar-what-the-exchange-rates-mean-for-you-in-2026/

Raji, A. (2024, May 28). Nigeria’s multiple exchange rate windows: How do the markets operate, and who can access them? CrossBoundary Advisory. https://crossboundary.com/nigerias-multiple-exchange-rate-windows/

Structure of Nigeria’s FX Market. (2024). Central Bank of Nigeria. 

https://www.cbn.gov.ng/intops/FXStructure.html

Tunji, S. (2026, March 3). Nigeria’s Net Reserves Jump 772% to $34.8bn in Two Years. Punch NG. https://punchng.com/net-reserves-jump-772-to-34-8bn-in-two-years/

USD to NGN Exchange Rate History for 2026. (2026). Exchange Rates. 

https://www.exchange-rates.org/exchange-rate-history/usd-ngn-2026

Veriv Africa. (2025). Nigeria Macroeconomic Outlook 2026. 

https://www.verivafrica.com/2026outlook

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