The Nigerian naira's fall after exchange rate unification

What happened to the naira in 2023?

The Nigerian naira didn’t just weaken in 2023 — it broke free. For years, the Central Bank of Nigeria (CBN) ran a managed system with multiple exchange rates. There was an official rate, an interbank rate, and a parallel market rate. The official rate had been gradually rising and was approaching 460 naira to the dollar in the months before unification, though few could access it. Most businesses and individuals turned to the parallel market, where the rate was much higher.

On June 14, 2023, the new finance minister, Wale Edun, announced a major shift: the CBN would unify the exchange rates and let the naira float. The official rate jumped overnight from around 460 to 750 naira per dollar. This wasn’t a devaluation. It was a surrender to reality.

Our data shows the average rate for 2023 was 632.44 — up sharply from 423.63 in 2022. The move ended years of currency controls, but it also opened the floodgates. The naira had been artificially strong. Now it had to find its true value.

Why did the naira keep falling after unification?

Unification didn’t stabilize the naira. It accelerated its fall. By November 23, 2024, the dollar bought 1,696.41 (Nov 23, 2024) naira — the all-time high. Even today, at 1,343.17, the currency is not back to stability.

The reason is simple: supply and demand. Nigeria earns foreign currency mainly from oil. But oil production has been stuck at low levels for years, far below its potential. Theft, pipeline vandalism, and underinvestment keep output weak. When global oil prices dip, Nigeria earns even fewer dollars.

At the same time, Nigerians need dollars to import fuel, machinery, and medicine. The country refines little oil, so it imports most of its gasoline. That creates a constant outflow of dollars. When demand for dollars outstrips supply, the naira weakens.

The Central Bank has tried to stabilize the rate by selling dollars from its reserves. But reserves dropped from $40 billion in 2022 to under $35 billion by late 2025. That’s not enough to fight the market forever.

How does the naira’s fall affect everyday Nigerians?

A weaker naira means higher prices. Most packaged goods in Nigeria rely on imported ingredients, packaging, or equipment. When the naira falls, those costs rise, and so do shelf prices.

In 2024, inflation hit double digits. A bag of rice, a tank of fuel, a child’s school supplies, all cost more. Even locally produced goods got pricier because their makers depend on imported inputs. The fall didn’t just hurt the rich. It hit the middle class and the poor hardest.

Public services suffered too. Hospitals couldn’t afford imported drugs. Universities delayed lab equipment orders. Government projects stalled as foreign contractors demanded payment in dollars or euros.

Some businesses adapted. A few manufacturers found local alternatives to imported parts. Others raised prices and cut staff. But for most Nigerians, the weaker naira meant a shrinking household budget and tougher daily choices.

What does this mean for Nigerians sending money home?

Diaspora remittances are a lifeline. Nigeria receives over $20 billion a year in personal transfers, more than any other African country. But the naira’s fall has eroded their value.

Imagine a nurse in London sending £1,000 home every month. In 2022, that bought 1,803,282.53 NGN. Today, even with a strong pound, the same amount buys fewer naira because the exchange rate has shifted.

And that’s before fees. Many transfer services charge a markup of 3% or more. If you send $500, you might only deliver 671,583.61 NGN. That’s less than half what it would have bought in 2015.

Some families have adjusted. They ask for goods instead of cash, phones, laptops, medicine. Others rely on informal channels, like ‘hawala’ networks, though those carry risks. The message is clear: sending money home now delivers less.

How does the naira compare to other currencies?

The naira’s fall stands out, but it’s not alone. Many emerging market currencies have weakened against the dollar since 2020. What’s different is the speed and scale of the naira’s drop.

Over five years, the USD/NGN rate has risen +226.2%. That’s worse than most of Africa. Compare that to the Ghanaian cedi, which weakened significantly over the same period, or the Kenyan shilling, which has also lost ground.

The dollar’s strength plays a role. But Nigeria’s oil dependence and policy delays made the naira more vulnerable. Countries with diversified exports or stronger reserves, like Morocco or Egypt, have seen more stable currencies.

And unlike currencies pegged to the dollar, such as the Saudi riyal, the naira must float. That means no artificial support, just market forces. For now, those forces still favor the dollar.

What’s the long-term outlook for the naira?

The naira won’t recover quickly. Its fate depends on oil, reforms, and confidence. Nigeria has started fixing fuel subsidies and attracting foreign investors. But progress is slow.

If oil prices stay high and production improves, the naira could stabilize. But any drop in global oil demand, or a new round of pipeline attacks, could send it lower.

Our data shows the yearly average has swung wildly: from 632 in 2023 to 1,505 in 2024, then down to 1,365 in 2026. That volatility makes planning hard for businesses and families alike.

For now, the naira is priced by crisis, not growth. Until Nigeria earns more dollars, or spends fewer, the pressure won’t ease. The unification was honest. But honesty doesn’t always bring stability.

How to send money to Nigeria now

If you’re sending money to Nigeria, timing and method matter. The rate changes daily. Sending when the naira is stronger, like near the current 1,320.97 (Sep 9, 2026), can get more value.

Use services that show the mid-market rate. Avoid dynamic currency conversion at ATMs or card terminals, they charge hidden markups. Always choose to pay in naira, not your home currency.

Compare fees. Some apps charge a small percentage, others much more. For a $1,000 transfer, even a 5% markup means losing 67,158.36 NGN. Small amounts add up.

And consider sending goods. A smartphone or laptop shipped from abroad may cost less than buying locally. But check import rules first. Nigeria has strict limits on what individuals can bring in.