Nigeria is poised to benefit from a significant reduction in import costs as the naira continues its steady recovery against the US dollar, bringing optimism to importers and economic observers alike.
The naira appreciated notably last week, rising from N1,580 to N1,530 per dollar at the parallel market — a 3.25% gain. At the official market, the currency traded at N1,536 per dollar, narrowing the gap between both markets to just N6. This convergence reflects growing market confidence and improving liquidity conditions.
Following a turbulent 2023–2024 period in which the naira recorded the worst performance among African currencies — weakening by over 131% — recent policy interventions by the Central Bank of Nigeria (CBN) are yielding results.
The naira had previously fallen from N636.13 to N1,474.60 to the dollar due to efforts to unify exchange rates and attract foreign capital amid persistent FX shortages and high inflation.
Import costs in Nigeria, often calculated based on the prevailing exchange rate, are expected to decline as the local currency gains strength.
Import duties, VAT, and other levies — all pegged to the CIF (Cost, Insurance, and Freight) value of goods — are set to become less burdensome.
Data from the United Nations COMTRADE database shows Nigeria’s total imports in 2024 stood at $40.97 billion. Key import partners include China, Belgium, and India.
In Q1 2025 alone, Nigeria imported food and beverages worth N1.67 trillion ($1 billion), a 5% increase from N1.59 trillion during the same period in 2024, according to the National Bureau of Statistics (NBS).
Analysts at Cordros Securities attribute the moderated import costs and improved FX performance to naira gains, which helped absorb the impact of a global fuel price surge linked to tensions in the Middle East.
They expect FX liquidity to remain strong, backed by waning global pressures and increased foreign investor confidence.
“We expect FX liquidity to remain robust, supported by reduced global pressures and stronger market confidence, which continues to attract inflows from foreign portfolio investors,” Cordros analysts stated. “Barring any unexpected shocks, we anticipate that the naira will remain stable in the near term.”
While Nigeria is advancing toward fuel self-sufficiency, the country still relies on imports. A lower fuel import bill in Q1 2025 suggests progress but not complete independence from foreign supply.
On the international front, trade tensions have eased since the US paused its reciprocal tariff hikes in April, allowing negotiations for revised trade terms.
The 90-day window for tariff talks — originally set to expire on July 8 — has been extended to August 1. Countries like the UK, China, and Vietnam have already reached agreements with the US, while others remain in talks.
Despite continued tariff threats and geopolitical uncertainties, market volatility has remained relatively calm compared to Q2 2025. A recent US-brokered ceasefire between Israel and Iran has also contributed to global stability.
Still, risks remain, with ongoing trade negotiations and unresolved tariffs casting a shadow over the global economic outlook. For Nigeria, however, the strengthening naira and improved FX conditions are timely boosts for a nation heavily reliant on imports.
