A new report by CSL Research says the 15 per cent import tariff on fuels introduced by President Bola Tinubu will help the Naira stay strong.
The Naira recorded a strong performance in October, appreciating to around N1,420 and N1,450 across several segments of the Foreign Exchange (FX) market.
Last week, President Tinubu approved a 15 per cent import tax on Premium Motor Spirit (PMS), otherwise known as petrol, and diesel, to help local production and reduce import dependency.
However, there have been fears that this will lead to rise in the price of petroleum products, especially PMS, to above N1,000 per litre from the current N920 per litre in Lagos.
The CSL report said, “A key driver behind this performance has been the resilience of the external sector, even amid relatively weak global oil prices. According to recent data, the current account balance recorded a surplus of about $5.3bn in Q2 2025, up from $2.9bn in Q1 2025.”
The firm noted that fewer goods are coming into the country while exports have slightly increased. It said this has helped reduce pressure on foreign exchange and allowed the Naira to gain strength.
“We believe that one of the major contributors to this trend is the increase in domestic refined petroleum output, primarily driven by the Dangote refinery,” the report said.
The report also said foreign investors now have more confidence in Nigeria. “We estimate that offshore investors who subscribed to one-year OMO bills in late 2024, when stop rates averaged around 24 per cent and the exchange rate was roughly N1,650/$, would be realising a net return of about 36 per cent in US dollar terms at current exchange rates.”
CSL added that the Central Bank of Nigeria (CBN) support, foreign inflows, and better trade balance have also helped the Naira.