By Dr Tope Fasoranti
Nigeria is taking visible steps to strengthen its economy. As we enter the second quarter of 2025, the signs are encouraging. Key reforms are being implemented with greater consistency and focus. From foreign exchange policy to oil sector management, the message is becoming clearer: Nigeria is moving forward.
The Central Bank of Nigeria (CBN) has taken the lead in restoring clarity to the country’s financial position. In late March, it released long-awaited figures on net foreign exchange reserves. The results were impressive—net reserves reached $23.3 billion by the end of 2024, up from $4 billion a year earlier. Gross reserves rose to $40.9 billion from $33 billion. This reflects strong policy coordination and a commitment to financial discipline. The decision to make this information public is a welcome change. It signals greater transparency and a more open approach to policymaking. The CBN deserves credit for building reserves while managing complex currency market dynamics. With this progress, it is now in a better position to ease pressure on the exchange rate, giving the naira some room to regain value.
This development is part of a broader effort by the Tinubu administration to rebuild confidence in Nigeria’s economy. Reforms in the oil and gas sector are also gaining traction. The government recently restructured the leadership of the Nigerian National Petroleum Company (NNPC), aligning it with ongoing efforts under the Petroleum Industry Act and the removal of fuel subsidies. These changes are designed to improve accountability and increase revenue flows. In addition, NNPC is close to finalising new foreign exchange financing arrangements backed by future oil exports. Reports suggest this could bring in up to $9.5 billion in funding. These funds could be used to clear import-related obligations and support foreign exchange liquidity. If implemented, this would further strengthen Nigeria’s external position in the months ahead.
Other economic reforms under the current administration have also laid a solid foundation for recovery. The push for fiscal consolidation, the unification of exchange rates, and the removal of costly fuel subsidies have helped reduce distortions and promote efficiency. These actions, taken together, point to a more coordinated and forward-looking economic strategy.
Market sentiment has started to shift. In its April 2025 EM QuickTake report, J.P. Morgan listed Nigeria as its top recommendation among frontier local markets. This reflects a growing belief that the country is becoming more stable and more attractive to long-term investors.
The outlook for the naira is more constructive. With net reserves now made public and the central bank possibly reducing its aggressive accumulation strategy, the exchange rate could move gradually toward more balanced levels. Some analysts see USD/NGN trending toward 1450 by the end of the year. There is still work to be done, particularly in areas like data quality and export diversification. However, the policy direction is much more precise than it was just 18 months ago. The commitment to reform is strong, and institutions like the CBN are playing a central role in delivering results.
Confidence takes time to build. What matters now is consistency. Nigeria can move steadily toward a more stable, predictable, and investment-friendly economic environment by continuing to communicate clearly, manage expectations, and deliver on its commitments. The progress so far gives reason to be optimistic.
Dr Tope Fasoranti is an Economist, Banker, and Consultant on Digital Transformation.
