In a significant turnaround for the Nigerian economy, the national currency, the naira, has finally exited the list of Africa's ten worst-performing currencies. This milestone, achieved after nearly two years of being ranked among the continent's weakest, coincides with a notable appreciation of the naira against the United States dollar in both official and parallel markets.
Naira Records Gains in Official and Black Markets
The positive shift was recorded at the close of trading on Friday, January 2, 2026. Data from the Central Bank of Nigeria (CBN) shows that the naira closed at N1,430 to the US dollar in the official market, marking an improvement from the previous day's rate of N1,435/$. This represents a modest but significant gain for the local currency.
The trend was mirrored in the unofficial black market, where Bureau de Change (BDC) operators confirmed the naira's strength. According to Abudullahi, a BDC trader who spoke to Legit.ng, the buying rate for the dollar fell to N1,470, while the selling rate dropped to N1,475. "Previously we sell dollar at N1480," he stated, highlighting the appreciation.
Exit from the Bottom-Ten Ranking
The currency's improved performance towards the end of 2025 proved decisive. An analysis using the Forbes currency calculator indicates that the naira exited the infamous bottom-ten list in October 2025 and had not reappeared as of December. This exit ends a challenging period that lasted close to two years.
While Nigeria's exact continental ranking was not fully disclosed, comparative data provides context. By December 31, the naira traded at about N1,436 per dollar. In contrast, the Rwandan franc, which ranked as the 10th weakest, traded at 1,456 per dollar. This positions the naira likely among Africa's 15th to 20th weakest currencies by the year's end, as reported by BusinessDay.
The Central Bank of Nigeria reported that the naira appreciated by 6.5% year-on-year, strengthening from N1,535.82 per dollar in the same period of 2024.
Drivers of the Naira's Recovery
Several key factors are behind this monetary recovery:
- Rising External Reserves: Nigeria's external reserves climbed to $45.48 billion as of December 30, 2025. This is the highest level in six years, up significantly from $40.88 billion a year earlier, providing a stronger buffer for the currency.
- Improved FX Liquidity: Conditions in the foreign exchange market have seen enhancement, partly due to strategic interventions by the CBN.
- Policy Reforms: Ongoing economic and monetary policy adjustments have contributed to stabilizing the currency.
Africa's Currency Landscape: Weakest and Strongest
Forbes data outlining Africa's currency performance for the year reveals a clear hierarchy. The continent's weakest currency in 2025 was the São Tomé and Príncipe dobra, trading at 22,282 per dollar. It was followed by Sierra Leone's leone, the Guinean franc, the Malagasy ariary, and the Ugandan shilling. The list of the ten weakest also included the Burundian franc, Tanzanian shilling, Congolese franc, Malawian kwacha, and Rwandan franc.
On the opposite end, Africa's most resilient currencies were led by the Tunisian dinar, the Libyan dinar, the Moroccan dirham, the Ghanaian cedi, and the Botswanan pula.
Mixed Outlook for 2026
Despite the current positive trajectory, projections for 2026 present a cautious outlook. David Cowan, Citibank's African economist, has projected that the naira could weaken to between N1,650 and N1,700 by mid-2026. This forecast is based on expected pressures from potentially lower crude oil prices and a new monetary easing cycle anticipated from the CBN.
Nevertheless, the exit from the worst-performing list and the sustained appreciation as the year turned provide a much-needed boost of confidence for Nigeria's economy, marking a hopeful start to 2026.
