When you ask any currency trader in Lagos, Nigeria’s main commercial city, how the naira is doing, you’re most likely to get a shrug. This would have been unthinkable three years ago. Back then the exchange rate was front page news, a number most Nigerians checked the way other people check the weather.
Today the naira trades in a narrow band, week after week, and hardly anyone outside the banks seems to notice. As Nigeria heads into the 2027 election, the currency that once could sink the current government barely comes up on the campaign trail.
This is odd in and of itself given that the naira has lost well over half its value against the dollar since President Bola Tinubu took office in May 2023. That should be a gift to the opposition. Instead, Atiku Abubakar, Peter Obi and other challengers spend their time attacking inflation, subsidy removal and the cost of living crisis. Nobody is campaigning to bring back the old exchange rate system.
Nigeria’s currency policy has always been political
Nigerian currency policy has always served political ends first. Under Muhammadu Buhari, the central bank held the official rate artificially strong. It rationed dollars, blocked importers from the official window and ran several exchange rates at once. The gap between the official price and the street price grew so wide that buying dollars cheap and selling them dear became a business of its own.
Then came the naira redesign of late 2022, when the central bank swapped old notes for new ones in a rush, partly to curb vote buying ahead of the election. Cash disappeared from the economy. People queued for hours at banks. Money supply fell from about 3.3 trillion naira in October 2022 to under 1 trillion by February 2023.
The policy looked political and it made the currency a symbol of government failure.
When he resumed office in 2023, Mr Tinubu promised a clean break. In his first speech as president he called for a unified exchange rate and described monetary policy as needing a thorough clean up. Within two weeks he removed the central bank governor, Mr. Emefiele, whom he blamed for the multiple exchange rate crisis. By June, the bank merged all its exchange rate windows into one. The naira fell 36 percent that month.
Investors and the IMF welcomed the move. Ordinary Nigerians felt it differently. The naira slid from around N470 to the dollar past N1,500. Because Nigeria imports so much, from fuel to rice to medicine, the fall pushed prices up everywhere. Inflation climbed above 30 percent. Combined with the removal of the fuel subsidy, this produced one of the sharpest cost of living shocks Nigerians have faced in years.
Sam Adeyemi, a financial analyst based in Abuja, says this is why the currency touches a nerve. “Naira devaluation holds a visceral point in Nigeria given that it affects all goods and services, as Nigeria is exposed to dollar dominated markets due to heavy importation. Any government would fear that a falling naira could bring bad reputation to his administration even though on paper it may sound like good monetary policy tool at that time,” he tells Businessfront.
The government felt that fear too.
Floated, but not enough to drown
Many expected the political backlash to force the government into reversing course.
Instead, Abuja chose a more cautious path.
Without abandoning the float, it began to lean on the market to keep the naira steady. Officials never pretended otherwise. “There is no country in the world, even the US, that has a completely free float,” Kingsley Obiora, then a deputy central bank governor, said soon after the windows were merged, describing the new system as a managed float rather than a free one.
The management has been real. The central bank sold an estimated $7.5 billion into the market in 2025 to hold the naira steady. Monthly dollar sales reached 654 million dollars in December 2025, up from 318 million the month before. External reserves rose to about $51.4 billion by early 2026, giving the bank room to step in when demand spiked.
Olayemi Cardoso, the current governor, says this is not old style defence of the currency.
He puts the bank’s role at only 1.2 to 1.3 percent of total market turnover in 2025, in a market where daily trading has grown from about 100 million dollars to as much as 1 billion.
“The market is now largely working on its own. Our interventions are very marginal relative to total market turnover,” he said in May.
Whatever it is called, the approach has worked.
In 2025 the naira posted its first full year gain against the dollar since 2012, rising about 7 percent to close near 1,435. The gap between the official rate and the street rate narrowed to roughly 2 percent, down from almost 6 percent a year before.
By July 2026 the naira was trading around 1,362 to 1,380, moving in a tight band day after day. For a currency once known for sudden crashes, this steadiness counts as success.
A researcher who tracks the market puts it simply. “Indeed, the pressure will always be there to defend or intervene in the naira. Nigeria’s economy isn’t strong enough to manage a free float for now. But what the CBN has done is remarkable, ensuring that there’s no multiple exchange rate window and the currency stays stable. We all can see the gains now.”
When the naira stopped being politics
Stability has changed what the opposition talks about. Mr Abubakar and his African Democratic Congress attack the government on inflation, food prices, subsidy removal and claims of misused public funds. Mr Obi presses the government on poverty and insecurity. None of the major candidates is calling for a return to a fixed rate or multiple windows. That kind of reversal would sound less like reform and more like a wish to bring back an era that mainly rewarded insiders.
The reason is simple. Voters feel prices, not exchange rates. When the naira was falling fast, its rate mattered because it predicted next week’s prices. Now that it barely moves, attention has shifted to the damage already done. Inflation, though slower than before, is still high. Food remains expensive. These are the issues the opposition can use.
For the government, a stable naira brings a political relief. It can point to one exchange rate, rising reserves and returning foreign investors. However, it cannot yet point to cheap food. The ruling party argues its reforms are starting to pay off and need time. The opposition argues Nigerians cannot eat reforms.
Floating the naira, once seen as political risk, has become accepted policy. The opposition also seems to have concluded that voters are more concerned about the cost of living than the precise value of the naira against the dollar.
As the 2027 election approaches, one may argue that foreign exchange has not stopped being political in Nigeria. It has simply stopped being the country’s most potent political weapon.
