The Dangote Group has projected that the naira will trade at N1,330 per dollar by the fourth quarter of 2026, with an anticipated average exchange rate of N1,385 for the entire year. This positive outlook is attributed to several factors, including rising foreign reserves, increased foreign investments, and a reduction in fuel imports due to enhanced domestic refining capabilities.

According to the group's H1 2026 Economic Report, the forecast reflects an improvement in Nigeria's external economic position. The report highlights that the naira appreciated by approximately 4% in the first half of 2026, trading around N1,380 in the official foreign exchange market before strengthening further to about N1,330 in August.

The report outlines quarterly projections for the naira's performance, estimating an average of N1,405 in the second quarter, N1,340 in the third quarter, and N1,330 in the fourth quarter. The full-year average is expected to be close to N1,385. The group emphasized that these projections indicate a trend of stability for the naira, contingent upon favorable developments in foreign investment flows and reserve levels.

A significant factor supporting this optimistic forecast is the expansion of domestic refining capacity, which is expected to reduce Nigeria's reliance on imported fuel. This shift is likely to alleviate pressure on the demand for foreign exchange, thereby improving the country's external balance and supporting the accumulation of foreign reserves. The report suggests that if the current trends continue, Nigeria could see a bolstered foreign exchange market, enhancing investor confidence.

The World Bank has also recognized the naira as one of Africa's more resilient currencies, noting that its maximum depreciation was limited to 2.6% in the second quarter of 2026. This acknowledgment further underscores the naira's relative stability amid broader economic challenges.

As Nigeria's net foreign reserves reached a record $46 billion, the country is witnessing a renewed interest from foreign portfolio investors, drawn by attractive real interest rates. The Dangote Group's projections indicate that the naira could maintain its strength through the end of 2026, although actual exchange rates will ultimately depend on ongoing developments in foreign investment, oil revenues, and demand for foreign exchange.

In summary, the outlook for the naira remains cautiously optimistic, with the Dangote Group's report highlighting key factors that could support the currency's stability in the coming months.