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How exchange rate stability and local production can rebuild Nigerian science 10 Mar 2026

Conversations around Nigeria’s exchange rate often focus on inflation, foreign investment, imports, and purchasing power. However, one critical sector of the economy that should top such conversations is scientific research. In university laboratories across the country and in national research institutes, the value of the naira is one of the key determinants of whether scientific research – the backbone of a knowledge-driven economy – thrives or stagnates. 

Between January and mid-June 2023, the exchange rate ranged from N445 to N465 per dollar. But after the Central Bank of Nigeria (CBN) liberalised the foreign exchange market in mid-2023, the naira began to depreciate. For the first time in decades, the exchange rate between the naira and dollar at the official Nigerian Autonomous Foreign Exchange Market (NAFEM) closed for the year at N907.11 per dollar. While the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), the benchmark rate derived from NAFEM and used for daily valuation and settlement of OTC FX futures contracts, closed at N1,034.78 per dollar, the parallel market rate was N1,215. 

By the end of 2024, the naira steeped further downwards to N1,535 per dollar officially and N1,656 per dollar in the parallel market. The nadir was reached in May 2025, when the nation’s currency weakened further to N1,590 per dollar officially and around N1,620 per dollar on the parallel market. 

Although there is no single official national dataset to precisely track yearly original research outputs in Nigeria before, during, and after the high exchange rate period, scientists – particularly laboratory-based researchers in academia – faced hardships due to the high exchange rate, in addition to other economic challenges. One such hardship was a severe disruption to research projects. 

A significant number of funded projects became impossible to complete as originally designed due to unaffordable reagents. Unfortunately, the majority of undergraduate and postgraduate level research in Nigeria relies on out-of-pocket funding. High exchange rates worsened hardship by making researchers pay more in naira for reagents and chemicals whose prices had barely changed over the years. Most of these reagents have to be purchased and shipped from developed countries such as the United States of America and the United Kingdom. 

In my case, as a university lecturer and researcher, the most convenient option at those times was to avoid studies that required buying items in foreign currencies. But this created a significant limitation on conducting high-impact research. Like many other researchers, I was forced to reduce the sample size and the scope of the experiment. This situation was tougher for early-career researchers who didn’t have reagents on hand. Attending both local and international conferences became a luxury rather than a norm due to financial constraints at both the personal and institutional levels. This situation contributed to burnout and a decline in morale within the academic community.

Another implication of the weakened naira was a decline in research quality and competitiveness. Researchers began to focus more on theoretical or computation-based studies and reviews due to cost constraints. Hence, Nigerian researchers struggled to compete with research from the developed world and from countries with stronger currencies and better-funded systems, even within Africa, such as South Africa and Egypt. 

To be sure, Nigeria ranks third in Africa in terms of scientific research output. Despite economic challenges and periods of sharp depreciation of the naira, Nigerian science-based researchers have continued to stretch themselves thin to achieve scientific excellence. According to the Nature Index, Nigeria’s research output from 2024 to October 2025, during the early appreciation of the naira in late 2025, reached 80 publications. Much of this high-impact research can be traced to collaborative efforts with well-funded institutions abroad, as well as to data-driven studies that require fewer imported consumables.  

The recent appreciation of the naira began in the second half of 2025, when it gradually strengthened and stabilised as reform efforts and external reserves improved. By the end of December 2025, the naira closed at N1,429 – N1,436 per dollar. In February 2026, the naira appreciated further to less than N1,350 per dollar. Just as the scientific community began to experience some relief as the naira appreciated, the CBN, on 24 February, decided to mop up dollars by buying about $190 million in the foreign exchange market to slow the pace of naira appreciation deliberately. 

By this move, the CBN signals that it prefers a gradual, orderly currency movement rather than sharp swings, largely from a macro-stability perspective to maintain investor confidence, protect foreign reserves and avoid speculative pressure. Although a rapidly appreciating naira appears beneficial for researchers, as discussed earlier, it can reverse swiftly if appreciation is driven by short-term capital inflows, which can shatter research implementation efforts. A currency that appreciates too quickly can be as disruptive as one that depreciates rapidly. Therefore, the CBN’s decision has important second-order effects on scientific research in the country.   

If naira appreciation occurs too quickly and then reverses, researchers risk cost overruns, incomplete experiments, and an inability to meet grant deliverables in situations where grants were awarded during the naira appreciation period. 

Therefore, the CBN’s intervention, if properly managed, could reduce these risks by flattening volatility to improve the real value and efficiency of public and private research spending, allowing institutions to plan annual research travels, collaboration budgets, and reduce last minute cancellation of scientific studies as a result of foreign exchange shocks, thereby improving the country’s reliability as a research partner.  

While the policy is advantageous, there are risks if dollar mopping is overly extended. Perception of excessive market control can negatively affect long-term research investment. For scientific research, an ideal outcome would be a properly managed naira stability, with a gradual strengthening trend and not artificial suppression. The CBN’s decision would have a much greater impact on scientific research in the country if complemented by targeted research support, foreign exchange windows, or concessions for science. 

The CBN must recognise that scientific research, which is a strategic mechanism for public good, is highly dependent on imported inputs priced in foreign currencies. The CBN should create a special framework for foreign exchange access to protect scientific research and higher education from exchange rate volatility and foreign currency scarcity. Foreign exchange access could be limited to verifiable research needs for both public and private academic and research institutions, such as laboratory reagents and consumables, scientific equipment and spare parts, publication fees in reputable journals, research software, databases and data access, bench fees, and training linked to approved projects. 

More importantly, encouraging local production of research consumables is a move in the right direction. Government support is essential for the establishment and provision of enabling infrastructure and amenities to function for manufacturing industries that can locally produce routing research consumables, including basic laboratory chemicals such as hydrochloric acid, sodium hydroxide, acetone, absolute ethanol, laboratory grade urea, among others; buffers and solution kits such as Tris buffer, Tris-HCl, Tris-acetate-EDTA, phosphate buffered saline and so on; culture media such as nutrient agar, Muelle-Hinton agar, MacConkey agar among others; glass wares and plastic wares; sample collection and field consumables; laboratory reagents; and staining dyes. 

Local production would make these items available for institutions of higher learning and research at reduced cost and also create more employment opportunities for young people. Other research items that are currently difficult to produce locally are antibodies, cell culture sera, restriction enzymes, polymerases, and molecular biology kits, to mention a few. 

We don’t have to produce everything to save foreign exchange. Still, if the country can produce 50-60 per cent of routine consumables, scientific research will be more affordable for both researchers and students. Nigeria can also become a highly competitive knowledge-based economy, as the country is already uniquely positioned to lead plant-based and natural products research to support pharmacology, toxicology, nutrition, and ethnomedical research globally. 

For the scientific community, a suitable science-economy narrative is not about whether the naira strengthens quickly or slowly, but, more importantly, whether it strengthens predictably and sustainably. If the CBN’s policy is well managed, prioritising macroeconomic stability over short-term gains, it will benefit research planning, human capital development, and national knowledge and innovation capacity. 

Mojisola Karigidi, PhD, a Financial Nigeria Columnist, is a Nigerian biochemist and the founder and product developer at Moepelorse Bio Resources. She is also a Global Innovation Through Science and Technology (GIST) awardee and an Aspen New Voices fellow.