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Comercio Partners has projected that the naira could strengthen to as high as N1,200 per dollar in the first half of the year under its most optimistic scenario, while warning that the currency could weaken to between N1,500 and N1,600 per dollar in a downside case driven by weaker oil earnings and tighter global liquidity conditions.

The cautious outlook comes as the naira opened March on a weaker note. It depreciated by N14.86 on Monday to N1,378.25 per dollar, a 1.08% decline from N1,363.39 quoted on Friday at the Nigerian Foreign Exchange Market (NFEM), according to data published by the Central Bank of Nigeria (CBN). In the parallel market, the currency also slipped by N5 to close at N1,375 per dollar on Monday from N1,370 on Friday.

In its latest macroeconomic outlook for the first half of 2026, Comercio Partners outlined three exchange rate scenarios, best case, base case and worst case, anchored on oil production performance, global crude prices, capital inflows, policy credibility and Central Bank dynamics.

Speaking at the report’s unveiling in Lagos, Olamide Ologunagbe, research analyst at Comercio Partners, said the worst-case scenario would see the naira trading between N1,500 and N1,600 per dollar. This assumes oil production underperforms government targets and Brent crude falls to between 50 dollars and 60 dollars per barrel amid a potential global recession. Such a development, she noted, would weaken foreign exchange earnings and widen fiscal and external deficits.

The firm added that tighter global financial conditions could further dampen portfolio inflows, while policy uncertainty may erode investor confidence, heighten risk aversion and fuel speculative FX demand. In this scenario, FX supply would weaken, external reserves could face pressure and the CBN’s intervention capacity may be constrained, leading to greater market volatility.

Under the base case, the naira is expected to trade between N1,400 and N1,450 per dollar. This projection assumes oil production meets, but does not exceed, official targets, with Brent crude averaging between 70 dollars and 75 dollars per barrel. That would support steady, though not exceptional, FX inflows.

Portfolio inflows could improve moderately if global interest rates ease and Nigeria maintains a positive interest rate differential. Policy continuity, according to the firm, would help sustain baseline investor confidence, even if it does not trigger major capital reallocation flows. In this central scenario, FX supply would improve modestly from both oil and non-oil sources, while the CBN maintains a tight monetary stance and intervenes periodically to smooth volatility and preserve orderly market conditions.

The most optimistic scenario sees the naira strengthening to between N1,200 and N1,350 per dollar. This outcome is anchored on oil production rising above planned levels and Brent crude holding between 80 dollars and 85 dollars per barrel, materially boosting FX supply and reinforcing fiscal buffers.

Comercio Partners also projects stronger capital inflows in this case, supported by easing global rates and a clear positive real interest rate differential. Foreign direct investment could improve on the back of greater regulatory clarity and sustained reform momentum.

With stronger external flows, the CBN would be better positioned to build reserves and execute firmer, more effective market interventions. Enhanced policy credibility, the firm added, would reduce speculative demand and encourage exporters to repatriate FX earnings, further stabilising the currency.

The outlook builds on what the firm described as a transformative year for the naira in 2025, when the currency recorded its first annual appreciation in 13 years. The naira strengthened by about 6.87% against the US dollar, opening the year near N1,541 and closing around N1,435 on December 31, 2025. Gains in the parallel market narrowed the premium significantly, fostering greater alignment across segments.

The turnaround followed sweeping foreign exchange reforms implemented by the Central Bank beginning in 2023 and deepened through 2025. Key measures included the launch of the Nigerian Foreign Exchange Code to strengthen transparency, accountability and ethical conduct in the market, as well as the rollout of the Electronic Foreign Exchange Matching System, an automated interbank trading platform designed to improve price discovery and reduce opacity.

Additional steps such as clearing FX backlogs, tightening market oversight and allowing supply and demand dynamics to play a greater role in rate determination helped restore confidence. These reforms attracted substantial capital inflows, estimated at nearly $21 billion in the first 10 months of 2025, representing a 70% increase from 2024, supported by higher remittances, portfolio investments and oil-related earnings.

Rising reserves, improved FX liquidity and a strengthening current account contributed to sustained currency stability, shifting Nigeria’s foreign exchange landscape from fragility toward greater resilience. As 2026 unfolds, the trajectory of oil output, global crude prices, capital flows and policy consistency will remain decisive in shaping the naira’s path.