Market News

Import costs have been tipped to drop significantly as the naira continues to gain more grounds across markets.

The naira appreciated significantly last week, strengthening from N1,580 to N1,530 per dollar, a gain of about 3.25 per cent at the parallel markets. The local currency exchanged at N1,536 per dollar at the official markets, creating N6 per dollar rate gaps between both markets.

The naira posted the worst performance among African currencies, weakening by 131.8 percent against the US dollar between 2023 and 2024. The naira fell from N636.13 to N1,474.60 to the dollar, following efforts by the Central Bank of Nigeria to unify exchange rates and attract foreign inflows amid persistent FX shortages and high inflation.

Importation costs in Nigeria include various taxes and charges, primarily import duties, VAT, and other levies. These costs are calculated based on the CIF value (Cost, Insurance, and Freight) of the goods, which includes the cost of the goods, insurance, and shipping.

The cost, insurance and freight (CIF) price is the price of a good delivered at the frontier of the importing country, or the price of a service delivered to a resident, before the payment of any import duties or other taxes on imports or trade and transport margins within the country.

Changes in exchange rate can significantly impact the cost of imports, as duties and other charges are often calculated based on the prevailing exchange rate. 

Nigeria’s total Imports in 2024 were valued at $40.97 billion, according to the United Nations COMTRADE database on international trade. Nigeria’s main import partners were: China, Belgium and India

New figures from the National Bureau of Statistics (NBS) reveal that Nigerian imported food and beverages worth N1.67 trillion ($1 billion) during the first quarter of 2025 (January–March), reflecting a five per cent increase from the N1.59 trillion recorded over the same period in 2024.

Analysts from Cordros Securities said the naira appreciation helped cushion the impact of the spike in imported fuel prices triggered by tensions in the Middle East.

“We expect FX liquidity to remain robust, supported by reduced global pressures and stronger market confidence, which continues to attract inflows from foreign portfolio investors (FPIs). Additionally, a stronger net FX reserve position enhances the CBN’s capacity to intervene when necessary.

Barring any unexpected shocks, we anticipate that the naira will remain stable in the near term,” they said.

While Nigeria is making strides toward fuel self-sufficiency, it still relies on imports, as seen in the reduced import bill for the first quarter. This indicates a decline in fuel imports but not a complete elimination.

Already, trade tensions have softened from the tariff hike announcements in April. The US President paused the implementation of reciprocal tariffs, allowing countries to negotiate lower tariffs for 90 days (April 9 – July 8), which was recently extended to August 1.

Three countries, including the UK, China, and Vietnam, have so far reached a deal with the US to lower tariffs, while a few other countries remain in active discussions with the US on new trade arrangements.

Despite renewed tariff threats from the US, market volatility has been relatively subdued compared to the heightened swings observed in Q2-25. Additionally, geopolitical tensions have eased after the US brokered a ceasefire deal between Israel and Iran.

However, uncertainty lingers over the broader economic implications of existing tariffs and ongoing trade negotiations, posing risks to global stability.