At the Access Bank Customer Forum held in Lagos on Thursday, Bismarck Rewane, Managing Director of Financial Derivatives Company, made key projections about the dollar to naira rate and the trajectory of economic growth.
Rewane predicted that the country’s currency, the naira, would stabilize at N1,555 per U.S. dollar in the near future. He also forecast that Nigeria’s gross domestic product (GDP) will reach $400 billion by 2026, driven by a combination of factors, including intervention funds, diaspora remittances, and crucial adjustments to the nation’s exchange rate policies.
“These gains are driven by intervention funds, remittances, and adjustments to exchange rate policies,” Rewane stated during the forum. He further projected that petrol prices would stabilize at N900 per litre due to the operational efforts at the Dangote refinery and other modular refineries in the country.
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His forecasts come at a critical juncture for Nigeria, where recent policy decisions, including the removal of fuel subsidies and the liberalization of the foreign exchange (FX) market, have led to economic upheavals, with inflation, social unrest, and hardship weighing heavily on the population.
It Will be Difficult to Stabilise the Naira Exchange Rate Without Supportive Fiscal Policies
Dr. Ogho Okiti, CEO of Think Business Africa, argued in an interview with Arbiterz that it is difficult to predict when the naira will stabilize at a specific exchange rate, as supportive fiscal policies, which are crucial for managing the exchange rate, are lacking.
He pointed out that the initial target of stabilizing the naira at N1,500 to the dollar has “has been breached”, with the exchange rate now exceeding N1,600 per dollar. According to Okiti, Nigeria’s uncontrolled government spending, replete with “leakages and waste,” exacerbates the problem because a significant portion of this spending is used to purchase foreign currency, further weakening the naira. He emphasised that it is critical for the government to cut its expenditure, especially wastes and leakages, if Nigerian leaders want the naira to stabilise.
Okiti also noted that the increased government revenues following the removal of the fuel subsidy should have been saved or used to reduce Nigeria’s debt, which would have lessened the pressure on the currency. Without fiscal consolidation, Nigeria is likely to experience “continued weakening of the naira.” He concluded by stating that monetary policy alone is insufficient to stabilize the exchange rate.

Nigeria’s Liberalization of the Foreign Exchange Market
In the past 15 months, Nigeria has embarked on a significant overhaul of its foreign exchange regime, primarily spearheaded by the Central Bank of Nigeria (CBN). The decision to liberalize the FX market was aimed at addressing long-standing inefficiencies and market distortions caused by a dual exchange rate system. For years, Nigeria operated with multiple exchange rates—an official rate controlled by the CBN and a parallel rate determined by market forces. This created disparities that encouraged speculative behavior, hindered foreign investment, and put undue pressure on the naira.
By June 2023, the naira was trading at vastly different rates across the official and parallel markets, with the official rate hovering around N780 per dollar while the parallel market saw rates as high as N1,200. The pressure to unify these rates and restore market confidence pushed the CBN to adopt a more flexible exchange rate system. The bank subsequently allowed the naira to float, introducing reforms aimed at stabilizing the market through increased transparency and reduced government intervention.
Dr Ngozi Okonjo-Iweala once said while she was Finance Minister under former President Obasanjo that there was greater demand for dollars every month after the Federal Government released the states’ shares of federal revenues.
While taking questions from journalists at the end of the 297th Monetary Policy Committee (MPC) meeting on Tuesday September 24, 2024, the Central Bank Governor Olayemi Cardoso said, “Furthermore, members observed a strong correlation between FAAC releases and liquidity levels in the banking system as well as it impacts on the exchange rates.”
Hence, like Dr. Iweala, Mr. Cardoso noted that monthly disbursement from the Federation Account Allocation Committee (FAAC) increases liquidity in Nigerian banks and this translates into more demand for foreign exchange.
Effects of FX Liberalization: Currency Depreciation and Inflationary Pressure
While the FX liberalization was expected to address inefficiencies, it came at a significant cost. The naira depreciated rapidly, reaching record lows, as it floated closer to the rates seen in the parallel market. The currency devaluation led to higher costs for imports, which fueled inflationary pressures across various sectors of the economy. Essential goods, many of which are imported, saw price hikes, worsening the cost of living for millions of Nigerians.
Inflation, which had been rising steadily, peaked at 32.15 percent in August 2024. While the inflation rate had decelerated for the second consecutive month by August, the situation remained dire for consumers who saw their purchasing power eroded. This rise in inflation was exacerbated by the removal of fuel subsidies in mid-2023, which caused petrol prices to skyrocket, placing additional strain on household incomes.
The liberalization of the FX market and the removal of fuel subsidies were part of broader economic reforms initiated by President Bola Tinubu’s administration, which aimed to reposition the Nigerian economy for growth. However, these reforms were met with social discontent, sparking protests across the country as citizens grappled with the hardships resulting from higher living costs.
Key Drivers of Naira Stabilization: Rewane’s Analysis
Despite the current economic challenges, Rewane expressed optimism that the naira would eventually stabilize at N1,555 per dollar, citing several factors that would aid in the currency’s recovery. A major driver of this stabilization, he explained, would be intervention funds from international financial institutions such as the International Monetary Fund (IMF) and World Bank. These funds are expected to provide much-needed liquidity to support the CBN’s efforts to manage the foreign exchange market.
In addition to intervention funds, Rewane highlighted the importance of diaspora remittances, which are a significant source of foreign currency for Nigeria. Nigeria receives over $24 billion annually in remittances from its diaspora, and this inflow has helped ease some of the pressure on the naira. As more Nigerians abroad continue to send money home, these remittances are expected to play a crucial role in stabilizing the exchange rate.
Another critical factor Rewane pointed to was the CBN’s commitment to implementing sound exchange rate policies. By allowing the naira to float and taking steps to unify the official and parallel exchange rates, the CBN has created a more transparent and market-driven system, which, in the long term, will help attract foreign investments and boost market confidence.

Energy Supply and Macroeconomic Stability
Rewane also turned his focus to Nigeria’s energy sector, projecting that petrol prices would stabilize at around N900 per litre, supported by increased local refining capacity. He noted that the Dangote refinery, which is expected to be fully operational soon, along with other modular refineries, would reduce the nation’s dependence on imported fuel. This, in turn, would help bring down fuel prices, easing inflationary pressures in the medium term.
Nigeria’s reliance on imported refined petroleum products has been a major driver of inflation, as global oil price fluctuations directly impact domestic fuel prices. With increased refining capacity, the country could reduce its exposure to these price shocks, providing some relief to consumers and businesses alike.
Navigating the Path to Economic Recovery
While the liberalization of Nigeria’s FX market and the removal of fuel subsidies have caused short-term disruptions, experts like Bismarck Rewane remain cautiously optimistic about the long-term benefits of these reforms. The path to recovery is fraught with challenges, as inflation remains high and social unrest continues. However, with intervention funds, increasing diaspora remittances, and careful management of exchange rate policies, the naira is expected to stabilize at a more favorable rate.
Moreover, the anticipated boost in local petroleum refining is poised to ease inflationary pressures, helping the country navigate the economic turbulence of the past 15 months. Rewane’s forecasts offer hope that, despite the current hardships, Nigeria’s economy may be on a trajectory toward stabilization and growth, with the GDP expected to hit $400 billion by 2026.