Naira to fall to ₦900/$ in 2023

Andersen, an independent tax and business advisory firm, has warned that the parallel rate of the naira may fall to N900 in 2023 from demand pressure if mitigating measures are not taken.

The firm presented its report titled ‘Nigeria’s 2023 economic outlook’ at a meeting with its partners in Lagos.

The report noted that the value of the naira was relatively more stable in the official market in 2022 than in the parallel market, which widened the premium between the two exchange rate windows. This was due to the heightened demand pressure spurred by foreign exchange (FX) illiquidity.

The report also stated that FX excess demand pressure is expected to continue in 2023, fueled by varying factors such as elevated global interest rates, attracting portfolio investments away from Nigeria, a structurally import-dependent economy, and currency speculations, which will make the naira remain pressured in the foreign exchange windows.

The report warned that the parallel market rate could depreciate to about N900/$ by the end of 2023 unless mitigating measures are taken. However, it noted that the official rate is likely to be devalued to about N500/$, should the Central Bank of Nigeria (CBN) continue to maintain the gap.


The report also highlighted the expected budget deficit of N11.34tn, a 39% increase from the last budget’s deficit of N8.17tn, and how it was expected to be significantly financed through domestic borrowings. The financial services sector also grew by 12.7% in Q3, 2022, driven by several factors such as technology adoption, increasing population, increase in credit to the private sector, the rise of the fintech industry, competitive landscape, and government reforms.