Renowned economist Bismarck Rewane has stated that the naira remains undervalued by over 13% despite large-scale foreign exchange reforms and recent currency market stability. Rewane, the Managing Director of Financial Derivatives Company (FDC), made this assertion during his presentation at the Lagos Business School Breakfast Session held on Wednesday, June 3, 2026.
Rewane's Analysis Based on Purchasing Power Parity
During his presentation, Rewane provided an analysis of the naira's valuation using the Purchasing Power Parity (PPP) concept, a commonly used economic tool for evaluating currencies. According to his findings, while the efficiency and transparency of the local foreign exchange market have improved following reforms implemented by the Central Bank of Nigeria (CBN), the local currency is trading below its fundamental value.
He stated: "We can see that on a PPP basis, with NFEM rate N1,374.92 to the dollar, the naira is still undervalued by 13.22%." His analysis projected that the PPP rate for the naira stands at N1,193.22 per dollar, while the current NFEM rate is N1,374.92 per dollar. The analysis involved comparing prices of various goods and services in Nigeria with international prices, including beverages, food, electronics, transportation, and household goods.
Impact of FX Reforms on the Naira
The economist noted that the naira has been volatile since the FX market liberalization, which led to its devaluation from approximately N410/$ in 2021 to over N1,900/$ in 2024. He emphasized that the reforms have removed distortions that plagued the currency. Despite the steep devaluation, Rewane asserted that the reforms have increased transparency, improved FX market efficiency, and significantly narrowed the gap between the official and parallel FX markets.
According to BusinessDay, Rewane said: "The naira has depreciated by over 200% from 2023 to 2026, yet there is improved FX market efficiency and reduced distortions."
Naira Stability Projection
Rewane also predicted that the naira is likely to remain in a range of N1,390 to N1,420 per dollar in the short-to-medium term, given the country's improving economic outlook. During his presentation, he highlighted that Nigeria's gross external reserves grew from $32.91 billion in 2023 to $49.58 billion in 2026, while remittance flows rose from $19.55 billion to $23 billion over the same period.
Other Expert Views on the Naira
Earlier, Legit.ng reported that the naira is projected to trade between N1,350 and N1,450 per US dollar in 2026. Yemi Kale, Chief Economist at the Africa Export-Import Bank (Afreximbank), made this projection while delivering the keynote address at the FirstBank Nigeria Economic Outlook 2026. Kale outlined scenario-based forecasts for the USD/NGN exchange rate, taking into account oil prices, foreign exchange inflows, inflation trends, and policy consistency.
This report was authored by Dave Ibemere, a senior business editor at Legit.ng with over a decade of experience in business journalism, covering the Nigerian economy, stocks, and general market trends. He holds a Master's degree from the University of Lagos and is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations, and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria.
