Decades-old naira devaluation fails to spark export boom

For Nigeria, a weaker currency– long touted as a catalyst for export growth – hasn’t delivered the expected payoff.

Over the past two decades, the country has devalued the naira multiple times, eroding no small chunk of its value, according to data analysed by BusinessDay. The prevailing view among policymakers has been that a cheaper naira would make Nigerian goods more competitive abroad and spur export activity.

But the results have fallen short. Despite repeated devaluations, available data shows export volumes have seen only marginal gains, especially when compared with countries that have successfully leveraged weaker currencies to supercharge trade. For Nigeria, multiple currency devaluations have so far produced more pain than payoff.

Since 2009, the naira has been devalued four times, with each one leading to a surge in export earnings, at least on paper.

BusinessDay’s analysis of the naira’s trajectory between 2009 and 2023 reveals the surge in export earnings has been driven more by the arithmetic effect of a weaker naira & rise in oil prices than by any real increase in export volumes. In other words, the jump in earnings reflects currency adjustments and higher commodity prices rather than a meaningful response from exporters capitalising on improved competitiveness.

In the absence of public data on export volume in Nigeria over the period, this story relies on export value, a metric that can rise purely because of exchange rate movements or commodity price swings.

The naira weakened by 194 percent against the dollar in the period under review (2009-2023) and the price of oil, Nigeria’s main export, rose 106 percent from $40 per barrel to $82.49. Add that up, it is exactly equal to the 300 percent increase in exports in the same period, according to official data from the National Bureau of Statistics (NBS).

The data reveals that Nigeria’s reward from its constant devaluation of the naira is yet to be seen in boosting exports in real terms, questioning whether the end truly justifies the means.

When devaluation is a strategy: The Chinese example

Take China, one of the world’s superpowers, which has historically used currency devaluation as a strategy to boost exports.

In 2008, the Chinese yuan traded at 6.83 per US dollar but by 2023, the currency had been devalued by the government to 7.12 per dollar, a 4.24 percent decline.

In that time, the country’s exports rose 136.12 percent from $1.43 trillion to $3.4 trillion, according to data from the UN COMTRADE.

Like the naira and other currencies, a weaker yuan lowers the price of Chinese goods for foreign buyers, encouraging higher export volumes.

Nigeria’s exports over the past decades were heavily dominated by crude oil, priced globally in US dollars. So, when the naira weakens, the same dollar-denominated revenue is converted into far more naira, inflating export earnings on paper even if the quantity exported remains the same.

A good example of this dynamic played out in 2000, before the devaluation in 2001. That year, the price of Nigeria’s Bonny Light crude surged to $27.06 per barrel, almost doubling from $13.95 the previous year. That price jump did drive up export value.

The data shows that while devaluation may help boost naira earnings in the short term, it doesn’t automatically signify improved trade or that the country is exporting more, or better than it used to.

Counting cash, not cargo

In another sign of how the naira devaluation is masking stagnant trade growth, the Nigeria Customs Service (NCS)’s revenue has soared in naira terms this year, but the headline figures tell only part of the story.
In the first quarter of 2025, the Nigeria Customs Service (NCS) reported a record haul of N1.75 trillion, up from N466 billion in the same period in 2021. The government hailed the rise as a major achievement. Yet, when adjusted for currency depreciation, the numbers suggest a less impressive reality.
An analysis by BusinessDay reveals that the sharp increase in revenue is largely a reflection of the naira’s weakening rather than any meaningful growth in trade volumes. Customs earnings, when measured in US dollars, actually peaked in the first quarter (Q1) of 2022 at $2.3 billion. By contrast, the record N1.75 trillion collected in Q1 2025 translates to just $1.79 billion– 24 percent shy of the haul in the same period of 2022 and slightly more than in 2021.

The figures highlight a broader concern: while Nigeria may be counting more cash, it’s not necessarily moving more cargo.

When China devalued the yuan in 2019, its overall export value still grew by 2.62 percent, despite trade tensions with the U.S. Expert analysis has shown this is because the country maintained the tempo of manufacturing, ensuring infrastructure and trade policies stayed favourable for sustaining export growth.

The case, however, does not seem to be the same as Nigeria’s.

“Trade facilitation has been sacrificed on the altar of revenue collection,” said Obiora Madu, a trade consultant with over 36 years in exports. “Go to the ports and ask. The delays, the problems, they’re all still there.”

While some improvements have come through technology and the disappearance of outdated systems like the long room–a physical space in the ports where clearing agents, customs officers, and other port officials gathered to process import and export documentation manually–Madu said the pace hasn’t kept up with global trade expectations and have undermined real profits.

At the Apapa and Tin Can Island ports–the major ports of entry in Nigeria’s market–delays, interventions, and repeated physical checks continue to bog down operations, despite the deployment of fast-track systems and digital clearance channels.

There might be indications of why Nigeria is losing export earnings here. In addition to obtaining excise fees for government coffers, the Customs is also primarily tasked to encourage, enhance and promote trade facilitation through their services, including reducing the cost and time of clearing goods for import and export and transshipments.

But players in the sector are not convinced export volume corresponds with what is submitted on paper.

“There hasn’t been any significant improvement in efficiency,” said Kingsley Igwe, a freight forwarder and the registrar of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN).

But from where he stands, Igwe, who regularly arranges for cargo transportation, handling logistics and documentation. is neither satisfied nor convinced.

He argued that if Customs revenue has increased without a corresponding increase in cargo throughput, something is wrong.

“If it takes a particular Bill of Lading (BL) an average of two weeks or three weeks to successfully go through the customs station, what that means is there is a delay.

“Within those two weeks, if there are about 500 BLs that were supposed to be served, multiplied by the time spent, that is the man-hours wasted on those BLs. If you translate that to the equivalent of charge per unit BL, in a minute, you’ll find out that we are losing money instead of making money,” Igwe said.

“So, when you hear Customs say they generate trillions of naira over a period of time, I really cannot translate that figure. I measure revenue by throughput.”

Lighting the export match

It is not too late for Nigeria to begin maximising the benefits of its naira’s devaluation. Like China, which implemented structural reforms to increase its earnings from exports, experts say Nigeria must measure trade success by more than just its revenue figures.

“Revenue generation, trade facilitation and security. They are all very, very important,” said Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise.

Yusuf said reforms should prioritise not only setting revenue targets, but also monitoring how well trade is enabled. “There has to be a deliberate effort to ensure that we have a balance in all of this.”