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The short answer
Using official exchange rates of about ₦415 to the dollar in October 2021 and ₦1,332.75 in October 2026, ₦5 million converted to dollars and kept at 1% a year would be worth about ₦16.9 million five years later. Naira savings would have needed to earn roughly 27.5% a year to match it. That is a record of the past, not a forecast.
"Should I have saved in dollars?" is easy to answer looking back and hard to answer looking forward. This article does the backward-looking sum carefully, with exchange rates from named sources, so you can see the size of the effect. It then explains why the next five years may not repeat it.
The two exchange rates used
- October 2021
- The official rate on FMDQ closed at ₦415.10 to the dollar on 28 October 2021, according to Prime Business Africa. The parallel market rate that week was reported at ₦570.
- October 2026
- The official NFEM rate closed at ₦1,332.75 to the dollar on 7 October 2026, according to Nairametrics, citing CBN data.
Between those dates the dollar bought about 3.21 times as many naira. Today's rate will be different; check it on the CBN's website or your bank's app before using any of these figures.
The worked example
All interest rates below are assumptions chosen to illustrate the comparison. They are not the rates any particular bank or fund paid.
Path A: convert to dollars in October 2021
- ₦5,000,000 ÷ ₦415.10 = $12,045.29.
- Kept in a dollar account at an assumed 1% a year for five years: $12,045.29 × 1.01⁵ = $12,659.72.
- Converted back at ₦1,332.75: about ₦16,872,243.
Path B: keep naira savings
| Assumed naira return per year | Value after five years |
|---|---|
| 12% | ₦8,811,708 |
| 20% | ₦12,441,600 |
| About 27.5% (break-even) | Roughly ₦16.9 million |
In this example, naira savings had to compound at about 27.5% a year for five years just to keep level with dollars earning 1%. Most savers did not get that.
Path A, bought at the parallel rate
Many people in 2021 could not buy dollars at the official rate. At the reported ₦570, ₦5,000,000 bought $8,771.93. At 1% a year that becomes about $9,219 and converts back to about ₦12,287,000. That is still more than the 12% naira path, but slightly less than the 20% path. The rate you could actually buy at changes the answer a great deal.
What the example leaves out
- Conversion costs. Each conversion carries a spread or fee. Two conversions on ₦5 million can cost tens of thousands of naira.
- Tax. Interest on either path may be taxed; this example ignores it.
- Inflation. ₦16.9 million in 2026 does not buy what ₦16.9 million bought in 2021. Measuring in dollars only tells you about dollar purchasing power.
- Timing. The result depends heavily on the start and end dates. A different five-year window gives a different answer.
- Access. Money you needed during the five years would have had to be converted at whatever rate applied then.
Why the past may not repeat
The 2021–2026 window saw the official rate move from about ₦415 to more than ₦1,300 to the dollar, a fall of roughly two-thirds in the naira's dollar value. A move of that scale over the next five years is not something anyone can predict or promise. If the naira is stable or strengthens, naira savings at high local rates can beat dollars earning little. Nobody knows which path the next five years will take, which is why many savers hold some of each.
Running the sum with your own numbers
You can repeat the comparison for any amount and any period with four figures: the rate you could have bought dollars at on the start date, the rate today, the dollar return you would have earned and the naira return you actually earned. Then work through it in order:
- Divide your naira amount by the start rate to get the dollars you would have bought.
- Multiply by (1 + dollar return) once for each year to grow the dollar balance.
- Multiply by today's rate to bring it back to naira.
- Grow the naira amount by (1 + naira return) once for each year and compare the two results.
- Subtract conversion costs from the dollar path, since it involves two conversions and the naira path none.
Use the rate you could really have dealt at, not the best rate quoted in the news that day. If you bought through a bank or app, your statement shows the rate you got.
Using this for your own decision
- Decide what currency your future spending will be in. School fees abroad are dollars; rent in Lagos is naira.
- Hold savings for each goal in the currency of that goal.
- For money with no fixed purpose, split between currencies rather than betting it all on one.
- Compare real offers: the naira rate you can earn now against what a dollar product pays, after fees.
For the split question, see how much of your money to keep in dollars and protecting savings from naira devaluation.
Where Pryme fits
A Pryme multicurrency account lets you hold both currencies in one place. Money stays in the currency it arrived in, and Swap converts only when you choose, with the rate shown first and the fee on its own line. Naira savings can go into Savings Boxes, with rates shown in the app.
Questions people ask
Is it better to save in dollars or naira in Nigeria?
Looking back at 2021 to 2026, dollars held their value far better because the naira fell sharply. Looking forward, nobody knows, so many people match savings to the currency of each goal and split the rest.
What was the dollar to naira rate in 2021?
The official FMDQ rate closed at ₦415.10 on 28 October 2021, with the parallel market around ₦570 that week, according to Prime Business Africa.
How much would ₦5 million saved in dollars in 2021 be worth now?
In our illustrative example, about ₦16.9 million at the October 2026 official rate, assuming 1% a year in dollars. Your own result depends on the rate you bought at and today's rate.
What naira interest rate beats dollar savings?
Over 2021–2026 in our example, about 27.5% a year compounded. In future it depends entirely on what the exchange rate does.
Sources
- Prime Business Africa: Exchange rate update, Friday 29 October 2021 · accessed Oct 2026
- Nairametrics: Naira slips to N1,332.75 as NFEM turnover hits $1.01 billion (8 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.