Why has the Exchange Rate Policy Failed in Nigeria?

This policy brief examines the primary cause of the exchange rate policy failure in Nigeria by evaluating the motivating factor for exchange rate regime changes in the country and reviewing the role of politics and interest groups in the Nigerian exchange rate management. The findings show that politics, institutional incentives, and group interest mostly play a significant role in Nigeria’s exchange rate and exchange rate regime determination, leading to a high level of inconsistency that contributes significantly to the policy failure.