The best ways to buy dollars in Nigeria

What’s happening in the Nigerian market? 

A new president — and a host of economic challenges — have been on the minds of Nigerian investors across the country. During his inaugural speech in May, President Tinubu said the country must work towards a unified exchange rate, allowing market forces to determine the value of the naira, the Nigerian currency. This also means there would no longer be multiple different exchange rates for the naira, which often hindered economic opportunities for the country and discouraged investment. 

Previously, the various exchange rates for the naira included the official one set by the central bank, plus an interbank rate (for banks to lend to one another), a rate for import and export, a rate for international money transfer companies, and a black market rate. 

Plus, in June 2023, the Central Bank of Nigeria announced a major change to the country’s foreign currency market: while foreign currencies used to only be available for purchase and sale at rates set by the central bank, they can now be bought and sold at rates determined by the market. This could encourage foreign investment in Nigeria. 

Via Unsplash // Obinna Okerekeocha

Trends in the Nigerian economy

According to the World Bank, Nigeria’s economy is set to grow by 2.9% a year in 2023, 2024, and 2025. However, the country continues to face many economic challenges that have prevented many of the country’s citizens from saving and getting ahead: the number of Nigerians living under the poverty line is set to increase by 13 million from 2019 to 2025 — and the naira has hit record lows this year. 

Foreign exchange shortages

Until very recently, the naira’s multiple exchange rates and the volatility of the oil sector have led to a scarcity of foreign exchange, including dollars. 

Inflation

Like much of the rest of the world, Nigeria is battling inflation. At time of writing, the inflation rate in Nigeria was 22.79%. This means Nigerians are dealing with prices that are over 20% higher than usual, without a corresponding boost in income. 

Unemployment 

Between 33 and 40% of Nigerians are unemployed, which leads to increased poverty and weak economic growth.  

Opportunities for investors in Nigeria

Investors in Nigeria can consider mutual funds or ETFs, fixed deposit accounts, gold, real estate, fintech apps, and stocks as ways to grow their wealth — but each come with varied levels of risk and volatility. 

Learn how Cenoa can provide an alternative saving and investment strategy for Nigerian investors.

Foreign currency for saving and investing

Many investors in emerging countries look to foreign currencies when their own country’s currency is facing volatility and depreciation caused by anything from wars to global inflation. 

That’s why investors in Nigeria seek to buy USD, a reliably stable currency that’s less likely to crash from one day to the next. 

Exchange rates between NGN and USD

The exchange rate between the Nigerian naira and the US dollar is steep: 1 US dollar is equivalent to 780 naira at the time of publishing. 

Via unsplash // Sunday Abegunde

Ways to buy and sell U.S. dollars in Nigeria — and what to know about each

Buying or selling USD in Nigeria can be complicated. Here are a few options and considerations for each: 

     1. Local or regional currency exchanges

Local exchange booths, plus newer Nigerian currency exchange companies like Grey, are an option for those looking to access USD in Nigeria. However, it’s very important to compare the exchange rates provided by private businesses with the official, international exchange rate. Also, look into fees associated with each transaction. 

     2. Commercial banks

Banks often let customers buy USD, but Nigeria has faced dollar shortages due to a lack of foreign investment thanks to the complexities of their old multiple exchange rates system (amid other instabilities).

Super wallets like Cenoa

Cenoa is a great option for investors looking to sustainably build their savings by buying digital dollars (USDC) that are always on par with USD. 

Access USDC from Nigeria with Cenoa

Cenoa is a super wallet that lets investors in emerging markets access USDC. Just download the Cenoa app, make an account, add your funds, and Cenoa will hold them in your super wallet in the form of USDC. With up to a 5% yield, you can watch your funds grow steadily and sustainably, and withdraw your funds at any time with no penalties.