The naira is expected to trade within the N1,400 to N1,500 per dollar band, as improving oil sector reforms, rising capital inflows and stronger diaspora remittances combine to support exchange rate stability, according to Tilewa Adebajo, chief executive officer of CFG Advisory.
Adebajo anchored the projection on clearer pricing signals in the oil and gas sector, improving macroeconomic stability, increased foreign portfolio inflows and more resilient diaspora remittances, which together are helping to rebuild confidence in the foreign exchange market. He, however, warned that government deficit financing remains the biggest risk to exchange rate stability, noting that rising deficits could quickly erode recent gains.
He said if deficits are contained, interest rates are better managed and economic growth resumes on a sustainable path, investor confidence will strengthen and support the naira within the projected band.
At the official market, the naira closed flat on Monday as the dollar was quoted at N1,420.28, marking a slight depreciation of 0.2 percent from N1,417.95 quoted on Friday at the Nigerian Foreign Exchange Market (NFEM), data from the Central Bank of Nigeria (CBN) showed. In the parallel market, also known as the black market, the local currency remained unchanged at N1,490 per dollar, according to traders.
Read also: NESG projects naira to trade at N1,480 with $52bn reserves
The CFG Advisory 2026 Outlook projects Nigeria’s gross domestic product growth at about 5 percent, supported by a single-digit official inflation outlook, a monetary policy rate of 20 percent and an exchange rate range of N1,400 to N1,500 per US dollar.
Speaking at the Finance Correspondents Association of Nigeria (FICAN) 2026 economic outlook forum, Adebajo said that as the country approaches the third year of difficult economic reforms, the urgency of translating reform gains into productivity-led growth is becoming clearer. He noted that Nigeria is at a point of inflection and must now focus on policies that can deliver 8 to 10 percent growth, lift productivity and improve livelihoods for more than 140 million Nigerians living in multidimensional poverty.
Despite the improving outlook, he stressed that fiscal discipline remains the most pressing concern. Adebajo pointed to a three-year cumulative budget deficit exceeding N50 trillion, persistent challenges in funding capital expenditure and a projected 2026 fiscal deficit of N23.85 trillion as indicators of fiscal strain. More worrying, he said, is the 2026 budget provision of N15.2 trillion for debt service, which exceeds the combined N14.97 trillion allocation for defence, security, education and health, a situation he described as a red flag requiring urgent policy attention.
Responding to questions on why foreign portfolio inflows are rising faster than foreign direct investment, Adebajo said portfolio investments are inherently volatile and should not be mistaken for long-term confidence. According to him, sustainable growth depends more on local and foreign direct investments that build productive capacity. He stressed that capital must be mobilised at all levels and that quality spending on productive projects has stronger multiplier effects than consumption-driven expenditure.
He described Nigeria’s current debt profile, estimated at over $100 billion, as unsustainable, noting that the 2026 budget provision of N15.52 trillion for debt servicing is now higher than the combined budgets for security, defence, education and health. According to him, much of the savings from fuel subsidy removal are being absorbed by debt service, leaving limited fiscal space to support growth. He said the 2026 budget needs to be urgently reviewed downward to ensure more realistic and effective implementation.
Adebajo also warned that excessive fiscal spending, large deficits and the failure of social intervention programmes have left many households and businesses under pressure, with the economy showing signs of stagflation. He called for a restoration of well-targeted social intervention programmes to give the ongoing reforms a human face.
To strengthen government revenues and improve foreign exchange flows, he urged the federal government to sell down at least 49 percent of its interest in 74 licensed concession assets to raise about $50 billion. According to him, the proceeds would help improve government revenues, restructure and recapitalise the Nigerian National Petroleum Company’s balance sheet. He also called for the consolidation of NNPC oil forward contracts into a structured debt instrument to improve transparency, accountability and pricing efficiency.
With these measures and the removal of key bottlenecks, Adebajo said Nigeria could restore investment into the oil and gas sector, which has declined from about $22 billion in 2009 and 2014 to less than $3 billion in 2024. He said increased investment would help raise production to about 2.5 million barrels per day, improving revenue sustainability, foreign exchange availability and easing pressure on the exchange rate.
He added that the Central Bank should consider cutting interest rates to stimulate growth as inflation moderates, noting that official inflation could return to single digits by the end of the second quarter. According to him, the government must articulate and implement deliberate disinflation and growth policies, targeting 8 to 10 percent GDP growth to support productivity, employment, exchange rate stability, industrial expansion and long-term investment.