The Nigerian Naira’s exchange rates against major global currencies, the United States Dollar (USD), British Pound Sterling (GBP), and Euro (EUR), reflect deep connections to the country’s oil and gas industry, which anchors foreign exchange earnings. This report covers official and parallel market rates for April 29, 2025, alongside analysis of the oil and gas realities impacting the Naira’s performance.
Official Exchange Rates: CBN and NAFEX Figures
According to data from the Central Bank of Nigeria (CBN) and the Nigerian Autonomous Foreign Exchange Market (NAFEX), the official exchange rates today are:
- USD/NGN: Buy – ₦1,601.30 | Sell – ₦1,602.30
- GBP/NGN: Buy – ₦2,127.17 | Sell – ₦2,128.50
- EUR/NGN: Buy – ₦1,818.76 | Sell – ₦1,819.90
The CBN continues to stabilise the Naira by injecting foreign exchange into the market. Its latest intervention, a $197.71 million FX injection on April 4, 2025, aimed to buffer against domestic oil production setbacks and global economic shifts. Oil and gas revenues still constitute over 90% of Nigeria’s FX inflows, underscoring the Naira’s dependence on crude oil fortunes.
Parallel (Black) Market Rates: Reflecting Street-Level Realities
Parallel market activity, driven by non-official traders and higher consumer demand for dollars, paints a slightly different picture:
- USD/NGN: Buy – ₦1,600 | Sell – ₦1,610
- GBP/NGN: Buy – ₦2,100 | Sell – ₦2,130
- EUR/NGN: Buy – ₦1,785 | Sell – ₦1,815
Sources from major hubs like Lagos Island, Abuja Port-Harcourt and Kanu show persistent premiums over official rates. The divergence mirrors Nigeria’s ongoing struggle with oil theft, non-oil import needs, and speculative trading—each factor tightening the squeeze on the Naira’s street value.
How Oil and Gas Shape Nigeria’s Exchange Rates
Oil Production: Recovery and Persistent Threats
Nigeria’s crude production rose by 14% in 2024, averaging 1.54 million barrels per day (bpd). However, this still fell below the national budget target of 1.78 million bpd.
Key highlights include:
- Peak production: 1.7 million bpd in November 2024 following enhanced security around pipelines.
- NUPRC Targets: 2.1 million bpd in 2025 under “Project 1 MMBOPD”, and 2.75 million bpd by end-2026.
Despite improvements, the twin evils of oil theft and aging infrastructure persist. Losses remain significant, diminishing Nigeria’s FX reserves and exposing the Naira to volatility.
Impact on Exchange Rates:
Stable oil production sustains the USD/NGN official rate close to ₦1,602. Any major disruption could see the parallel market rate spike further, widening the gap.
Dangote Refinery: A Game-Changer for the Naira?
The Dangote Refinery, now operating at 85% capacity, has reduced Nigeria’s petroleum imports by 67%, saving vital FX reserves.
Additionally:
- Exports: Refinery exports products to Ghana, Cameroon, South Africa, and Angola.
- Balance of Payments: Nigeria’s trade deficit has narrowed by 15% due to reduced importation.
Impact on Exchange Rates:
These savings have stabilised the parallel market’s USD/NGN band between ₦1,600 and ₦1,610. Yet, logistics bottlenecks and incomplete ramp-up to full capacity remain challenges.
Natural Gas Projects: The “Decade of Gas” Initiative
With proven reserves of 209.26 trillion cubic feet (TCF), Nigeria’s natural gas holds immense potential.
Current progress includes:
- Nigeria LNG Train 7: Expansion project boosting capacity to 30 million tonnes per annum by late 2025.
- Floating LNG Projects: Active projects to diversify FX sources.
- Trans-Saharan Gas Pipeline: A new agreement with Algeria and Niger signed in 2025.
Impact on Exchange Rates:
Increased gas exports will strengthen FX earnings, potentially easing pressure on GBP/NGN and EUR/NGN rates over time. However, project delays and high capital requirements pose risks.
Global Energy Transition: A Looming Threat
The global pivot to renewable energy threatens Nigeria’s long-term oil revenues. Despite reforms like the Petroleum Industry Act (PIA) of 2021 and the CBN’s “Naira-for-Crude” strategy, investment inflows remain cautious.
Impact on Exchange Rates:
With Brent crude trading between $74–$90, Nigeria’s FX base remains vulnerable. A significant downturn in oil prices or continued divestment by international oil companies could weaken the Naira substantially.
Geopolitical and Economic Pressures
Nigeria’s heavy reliance on oil for 50% of its budget and 90% of FX makes the country especially sensitive to geopolitical events like:
- Russia-Ukraine War: Reshaping global oil demand.
- OPEC+ Production Cuts: Affecting Nigeria’s market share in Asia.
- US Tariff Policies: Threatening non-oil exports.
Impact on Exchange Rates:
Such events directly influence the parallel market, where today’s GBP/NGN trades at a higher band (₦2,100–₦2,130), and EUR/NGN hovers between ₦1,785 and ₦1,815.
Linking Currency Movements to Oil and Gas Performance
- USD/NGN: Production gains and Dangote Refinery FX savings support stability. Shortfalls risk pushing the parallel market rate to ₦1,620+.
- GBP/NGN and EUR/NGN: High foreign education and medical tourism demand inflate parallel market premiums. LNG projects could temper this over time.
- Oil Theft and FX Shortages: Persistent theft constrains the CBN’s ability to defend the Naira, exacerbating volatility.
Market Sentiment and Forecast
Conversations on X (formerly Twitter) express cautious optimism.
Analysts like @realkelvin07 highlight fears of “missing barrels” affecting FX reserves.
The World Bank projects 3.7% GDP growth for Nigeria in 2025, contingent on sustained oil production, successful gas exploitation, and reduced dependency on crude.
Smart Advice for Consumers
- Use Official Rates: Prioritise CBN rates for major transactions.
- Monitor Oil and Gas News: Track developments to anticipate FX market shifts.
- Verify Traders: In parallel markets, deal only with reputable sources.
- Prepare for Volatility: Save, hedge, or plan for potential currency fluctuations.
Oil and Gas Hold the Key to Naira Stability
Today’s Naira rates USD/NGN (₦1,601–₦1,610), GBP/NGN (₦2,100–₦2,130), and EUR/NGN (₦1,785–₦1,815) are anchored firmly to the performance of Nigeria’s oil and gas sector.
While projects like the Dangote Refinery and Nigeria LNG Train 7 promise FX relief, persistent oil theft, global energy shifts, and economic uncertainties remain serious threats.
For Nigerians and investors alike, staying informed and adaptable is critical as the Naira’s journey unfolds.
