Experts explain why the naira is not N1,000/$1 or better despite stronger reserves, increased oil earnings

Nigeria’s stronger oil earnings and rising foreign exchange reserves have improved the country’s external position, but the naira has remained above N1,300 to the dollar, raising questions about why higher dollar inflows have not translated into a significantly stronger exchange rate.

Nigerians’ love for a stronger naira reflects a populist belief that this often leads to a lower cost of goods and services.

Thus, many on social media wonder why we haven’t seen the exchange rate strengthen to as high as N1000/$1.

The divergence has become more evident as crude oil production improves and revenue from the Nigerian National Petroleum Company Limited (NNPC Ltd) remains elevated. NNPC’s monthly revenue rose from N2.57 trillion in January 2026 to N4.97 trillion in April, before moderating to N4.34 trillion in May, N4.39 trillion in June and N3.09 trillion in July.

Meanwhile, Nigeria’s foreign exchange reserves have climbed to about $53.9 billion as of September 1, while the naira has continued to strengthen gradually.

The currency closed at N1,324.50/$ on September 2, although the parallel market rate remained around N1,400–N1,410/$.

According to financial and economic experts, the disconnect reflects the interplay of dollar demand, foreign exchange liquidity, imports, capital flows, monetary policy and the structure of Nigeria’s external payments.

They opine that despite the improvement in oil earnings and reserves, the increase in Nigeria’s dollar inflows has not been enough to eliminate persistent demand for foreign exchange or trigger a sharp appreciation of the naira.

What experts are saying

Economists who spoke separately to Nairametrics say the answer lies in the difference between foreign exchange earnings and the dollars that actually become available to participants across the wider FX…