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The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, has expressed optimism about achieving the 1500/$ exchange rate projected in the 2025 Appropriation Bill, citing recent foreign exchange reforms spearheaded by the Central Bank of Nigeria (CBN).
Gwadebe shared this perspective discussing the naira’s performance during the festive period.
According to FMDQ’s forex data, the naira strengthened slightly, closing at N1,539.55/$ on Monday, up from N1,541.7/$ the previous Friday. In the parallel market, Bureau De Change (BDC) operators in Lagos’ Yaba area quoted the naira at N1,650/$ on Tuesday.
“The naira is stabilizing and steadily appreciating. It is around N1,650/$, with buying rates slightly lower,” Gwadebe noted. “The Electronic Foreign Exchange Matching System (EFEMs) has improved transparency, and the CBN’s consistent interventions have bolstered market liquidity. Additionally, the lifting of the suspension on interbank FX sales to BDCs will soon take full effect, further aiding the retail market. These efforts align with the 2025 budget’s exchange rate target of N1,500/$.”
The CBN’s EFEMs went live earlier this month to enhance the efficiency and transparency of Nigeria’s FX market. Additionally, the CBN has temporarily permitted BDC operators to purchase up to $25,000 weekly from the Nigerian Foreign Exchange Market (NFEM) to meet heightened holiday demand.
This policy, detailed in a circular dated December 19, 2024, allows BDCs access to FX between December 19, 2024, and January 30, 2025. The acting Director of the CBN’s Trade and Exchange Department, T.G. Allu, stated, “BDC operators can purchase FX from one authorized dealer of their choice, fully fund their accounts beforehand, and comply with a maximum spread of one percent for retail transactions. Transactions will be reported to the Trade and Exchange Department.”
The general public is also reminded that Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) remain available through banks for legitimate foreign exchange needs.
Budgetary Projections and Economic Outlook
The 2025 Appropriation Bill revised the exchange rate assumption upward to 1500/$ from the 1400/$ rate indicated in the Medium-Term Expenditure Framework (MTEF) released in November. The MTEF also forecasted crude oil production at 2.12 million barrels per day and set a benchmark price of $75 per barrel. Inflation was projected to decline from 27.85% in 2024 to 16.94% in 2025.
During his budget presentation, President Bola Tinubu outlined further economic projections, including a reduction in inflation from 34.6% to 15% in 2025, an improvement in the exchange rate to 1500/$, and a base crude oil production assumption of 2.06 million barrels per day.
Gwadebe concluded by emphasizing that the ongoing reforms and collaborations between the government, CBN, and private sector stakeholders provide a solid foundation for achieving the projected exchange rate and fostering a more stable and robust Nigerian economy.
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