For years, the national conversation has been hijacked by a singular, almost obsessive question: what is the true value of the naira? Pundits on television have preached their own gospels, often demanding devaluation as if it were a divine commandment. Yet, time and again, the naira has defied these predictions, strengthening when experts swore it would collapse. The debate has been fueled by rigid academic formulas, such as the crawling peg, which would condemn Nigeria to endless devaluation, stifling growth in a developing economy that needs a healthy dose of inflation to thrive.
Now, the narrative has shifted. The International Monetary Fund, in its latest Article IV report on Nigeria, declared the naira undervalued, suggesting it should trade at no more than 1,142 naira to the US dollar. Some local economists, like Professor Uche Uwaleke, argue for an even stronger naira, perhaps below 1,000. The IMF’s analysis relies on the Real Effective Exchange Rate, which tracks the currency’s strength against a basket of major currencies. A falling REER, they note, is good for exports—and Nigeria is seeing a surge. Non-oil exports have jumped over 30% for two consecutive years, and the country has posted three straight years of trade surpluses under President Tinubu. The question is: should we maintain this trajectory or reverse it? I argue we should not truncate this momentum.
This news of an undervalued naira is a breath of fresh air. It signals better economic management, a departure from the era of reckless spending fueled by oil wealth. That exceptionalism turned Nigeria into a global importer of everything from French champagne to Toyota Landcruisers, even sand for mansions. We became the world’s top importer of luxury SUVs and a major player in medical tourism, while local industries withered. But the reforms championed by President Tinubu and CBN Governor Cardoso are changing the game. The forex market now operates with transparency, the naira oscillates gently between 1,350 and 1,380, and the parallel market premium has largely evaporated.
Yet, some voices clamor for a stronger naira, citing suffering and nostalgia for the days when the official rate was 470 naira. They forget the rot: the massive arbitrage that allowed connected individuals to buy dollars at official rates and sell them at black market prices, making billions while legitimate businesses and students struggled. Strengthening the naira now would be a return to those locust years, a betrayal of the discipline hard-won over the past three years. As the Apostle Paul asked, “Shall we continue in sin that grace may abound?” God forbid.
The Marshall-Lerner Condition teaches that a weaker currency benefits exports if demand is price-elastic. Nigeria is proving this theory right. Our exports now include solar panels, ATM cards, cars from Innoson, leather goods, and fintech services dominating Africa. These industries employ millions and deserve our respect, not the relentless negativity from pressure groups. We must spotlight the heavy lifters and counter the doom-mongers.
So, instead of chasing the elusive “true value” of the naira, which changes daily in a transparent market, let us focus on its “productive value”—the value that keeps us engaged, productive, and focused on our own economy. This is the value that discourages us from being just another import-dependent nation. The African Continental Free Trade Agreement is gaining steam, and the World Bank now encourages industrialization for African countries after decades of opposition. The temporary inconvenience of expensive imports is a price worth paying for long-term gains.
Imagine if we strengthened the naira overnight: imports would flood in, local industries would collapse, unemployment would soar, and we would lose the export markets we’ve painstakingly built. Instead, let us continue building the fiscal, monetary, industrial, and mental muscles we are developing today. In time, the naira may strengthen gradually to 500 naira per dollar, but only through sustained productivity. Let us think for Nigeria and her future.
