Economy

FX market harmonisation: Naira depreciates by 215% in one year

Published

2 years ago

June 17, 2024

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Since the harmonisation of the foreign currency market segments in Nigeria one year ago, the naira has depreciated by about 214.64 per cent against the dollar.

At the close of trade on Friday, the naira stood at N1482.72 to a dollar, compared to the N471/$ it was a year before.

The statement from the CBN abolishing the segmentation of the FX market into different windows partly read, “All transactions will now be done through the Investors and Exporters window, where the exchange rate will be determined by market forces. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.”

The CBN also announced reintroducing the ‘willing buyer, willing seller’ model at the I&E window, which allows eligible transactions to access foreign exchange based on the guidelines outlined in the circular dated April 21, 2017.

Since the floating of the Nigerian currency, it has remained unstable despite spirited efforts by the CBN under Dr Olayemi Cardoso to stabilise it.

At the end of 2023, the naira closed at 911/$, signalling a significant drop in six months.

In a commentary in February, Fitch Ratings put the drop in the value of the naira at about 40 per cent, saying, “The Nigerian naira was recently devalued sharply (end-2023: 899/USD; 13 February: 1,516/USD; about 40 per cent devaluation), exceeding our expectations of a more moderate depreciation in 2024. The large devaluation is the second within a year (70 per cent devaluation since end-2022) and has converged the official exchange rate with the parallel market rate.”

In the New Year, the local currency recorded high volatility, depreciating to almost 2,000/$, which raised claims that activities on peer-to-peer trading platforms were impacting the value of the naira.

The currency also went from being the top-performing currency in March to the worst-performing currency in the world in April, according to a Bloomberg report.

Amid all of this, the CBN has issued draft circulars and taken steps to stabilise the naira and boost forex supply.

Commenting on the status of the naira, one year after the major reform, economist and the Chief Executive Officer of Economic Associates, Ayo Teriba, applauded the Olayemi Cardoso-led CBN for its handling of the fallouts of the FX market harmonisation.

He said that compared to the fuel subsidy removal bit, the FX market had done better.

“I will say that the naira has done better than the pump price of the petroleum product. They were both policies hurriedly embarked upon without adequate preparation. But in the case of the foreign exchange market, the necessary reforms have been done post-liberalisation and you have to commend the central bank governor and his team.

“He (Cardoso) was appointed three months after the harmonisation. He has tried to resolve the issue of lack of transparency in the market. There is more transparency and he has been very forthright about the arrears that he had inherited at the time, very open about how much they were repaying until they repaid everything, and the portion of it that was fraudulent.

“He has also opened the market to foster more inclusiveness. You have to applaud the current regime; they have abolished the ban on the 43 items, admitted Bureau De Change operators, and licensed International Money Transfer operators. Everyone deserves a seat at the table and it is not surprising that the rates have converged.”

Teriba, however, expressed concern about the persistent volatility in the market but expressed optimism that the CBN and the monetary policy committee would be able to get a handle on it.

“The only persistent concern with the FX is the volatility, which the central bank and the monetary policy committee are trying their best to deal with and will eventually be able to deal with. You cannot say that with the fuel subsidy removal reform,” he asserted.

A former Chief Economist for Zenith Bank, Marcel Okeke, described the floating of the naira as a calamity.

“It is one of the wrong policy initiatives of the government, especially coming so close to the removal of the fuel subsidy. The impact of the two policies has brought the economy to where we are today where we cannot see any light at the end of the tunnel.

“Floating the naira in June 2023 was like putting the naira in a wrestling ring with other currencies of the world like dollars, Pounds Sterling and others, it lost value and strength so much that it was almost on a tailspin,” he posited.

A Relationship Manager Of Corporate Banking at FSDH Merchant Bank Limited, Ayodele Akinwunmi, stated that some of the objectives of the reform had been achieved, which included the convergence of the segments of the market.

“The gap between the official and parallel market rates is now very narrow if not almost the same, so there is no roundtripping from one segment of the market to the other, which was one of the objectives.

“Also, there has been improved confidence from foreign investors in bringing money to the country. They have invested a lot in fixed-income securities and they have also tested the market to see whether they can exit the market after making a profit, and yes, they have been able to do that successfully.

“So, they have the confidence that if they bring in their money into the country, they are able to exit when they want to, which was one of the objectives of the reform,” he stated.

According to Akinwumi, it is to increase supply in the forex market.

“We need as a nation to grow our economy, to enable us to export more, not only for oil but also from non-oil sectors. We have solid minerals, agriculture, and manufacturing products, and we can add more value to the agricultural produce than the raw materials that we sell today. We need to make the economy more competitive, and security in the nation must improve, so that we do not import the things we can produce locally.

“With Dangote promising to supply PMS from next month, that means the import bill for petrol will drop significantly and if we can supply crude significantly, which I don’t think we should be able to,” he noted.

He stated that the project could meet local demand and even supply the West African market and some parts of Europe.

“He has been supplying fertilizer to America, Brazil, the Caribbean and parts of Europe and when you supply such, you are bringing in foreign exchange. What do we need to optimise the plant? Gas, which we have in abundance, is being flared. Whatever the government needs to do to make that project work, they need to do it,” he explained.

Meanwhile, the Economist Intelligence Unit has projected a stronger dollar this year and 2025, which may add to naira woes.

In its latest report titled ‘A stronger dollar for longer, predicting the effects on emerging markets’ the EIU said, “The dollar’s dominant role in international trade and finance prompts us to ask, how long can the global economy withstand above-average strength in the US dollar?

“In terms of financial crisis risk, emerging markets are more vulnerable, owing to a frequent dependence on external funding in major global reserve currencies–most often the US dollar–to finance public expenditure and plug shortfalls in the balance of payments. A stronger US dollar raises the local currency burden of repayments, compounding the impact of higher rates on the cost of borrowing.

“Moreover, these effects often play out against a backdrop of private sectors that are squeezed by tighter financing conditions; domestic central banks are obliged to keep local rates high amid tight US policy, and foreign investment is instead directed towards developed markets with higher returns. These trends serve to further undermine economic growth and government tax revenues.”

Economy

Again, NNPCL Increases Fuel Price For Second Time In Two Days

Published

3 days ago

July 23, 2026

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The Nigerian National Petroleum Company Limited, NNPCL, has increased the pump price of Premium Motor Spirit, PMS at its retail outlets for the second time in less than two days.

A market survey by DAILY POST showed that NNPCL raised its petrol price to N1,335 per litre on Wednesday from N1,270 per litre on Tuesday.

This means that the state-owned filling station increased its fuel price by N65 per litre.

The new price has been implemented at NNPCL filling stations in Wuse Zone 6 (Berger), Zone 4, and other outlets in Abuja and its environs.

Recall that on Tuesday, NNPCL increased its petrol pump price by N115 per litre to N1,270 per litre.

The latest increase comes amid continued petrol price volatility in the country’s downstream oil sector following Dangote Refinery’s resumption of the sale of refined petroleum products in U.S. dollars.

DAILY POST reports that crude oil prices rose by nearly 4 percent on Wednesday as airstrikes intensified in the Middle East.

Economy

Old telecom rules can’t handle AI, digital era, says NCC

Published

4 days ago

July 22, 2026

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The Nigerian Communications Commission has said Africa’s telecommunications regulators must overhaul traditional regulatory approaches to keep pace with rapid technological changes, warning that existing frameworks were no longer adequate for an industry increasingly driven by artificial intelligence, satellite services, cloud computing and digital public infrastructure.

The Executive Commissioner for Stakeholder Management at the NCC, Rimini Makama, stated this on Tuesday in Abuja during the Head of Regulators Roundtable held on the sidelines of the ongoing 7th Ordinary Session of the Conference Preparatory Committee of the African Telecommunications Union.

Makama said the telecommunications landscape had become significantly more complex, requiring regulators to rely on data and market intelligence rather than conventional regulatory methods.

“Our discussion today turns on one question that matters to every regulator in this room. How do we use data and evidence to make decisions that are smarter, more transparent, and more focused on our consumer? Our markets are no longer simple,” she said.

She added, “Broadband is expanding, satellite services are arriving, AI, cloud computing, and digital public infrastructure are reshaping our sector. The old regulatory approaches were built for a simpler time. They are no longer enough.”

According to her, regulators across Africa now possess unprecedented volumes of technical, market and consumer data, but the real challenge lies in converting that information into better regulatory decisions.

“To stay ahead of the problem and not just react to it, we need trusted intelligence,” Makama said.

She explained that because African digital markets were becoming increasingly interconnected, regulators faced similar responsibilities in protecting consumers, promoting competition, attracting investment and strengthening network resilience.

“The challenge is not collecting it. The challenge is turning it into better decisions,” she said.

Makama said the NCC had developed a regulatory intelligence ecosystem that integrates multiple data sources, including quality of service and quality of experience indicators, consumer complaints, compliance analytics and market intelligence to support evidence-based policymaking.

“It brings several data sources into one place, so that our decisions rest on evidence, quality of service, and quality of experience data, consumer complaints, compliance analytics, and market intelligence. We will walk you through some of the recent cases where this intelligence led to real and measurable outcomes,” she said.

She urged regulators across the continent to deepen collaboration by sharing practical experiences and developing trusted approaches to data verification, advanced analytics and consumer-focused regulation.

Makama also challenged participants to examine how regulators could ensure the independence and accuracy of regulatory data, remove barriers to information sharing and measure consumer experience beyond conventional quality-of-service metrics.

Earlier, the Executive Vice-Chairman of the NCC, Dr Aminu Maida, said African regulators were increasingly confronted with common challenges despite operating under different legal and institutional frameworks.

According to him, discussions among regulators now routinely revolve around investment, infrastructure resilience, satellite communications, cybersecurity, affordability, artificial intelligence and emerging technologies.

“We may regulate markets of different sizes, operate under different legal frameworks, and respond to different national priorities. But the realities of our work are often remarkably similar,” Maida said.

He added, “Someone asks, how are things back home? Five minutes later, we are discussing investment, infrastructure resilience, satellite services, cyber security, affordability, artificial intelligence, or the latest technology that has arrived just in time to test the regulatory framework we thought had finally settled.”

Maida said such shared experiences underscored the need for stronger collaboration among African regulators to avoid addressing similar problems independently.

“The challenge that one regulator is trying to solve has already been encountered in one form or another by a colleague elsewhere on the continent. So, the question really is how we make that exchange of experience more deliberate, more systematic, and more useful to our institutions,” he said.

He described the roundtable as an opportunity to strengthen evidence-based regulation by encouraging the use of data, market intelligence and practical experience in policymaking.

Also speaking, the Executive Commissioner, Technical Services, Sunday Oshadami, said the NCC had prioritised transparency by ensuring operators clearly understood regulatory obligations and by making key performance information available to subscribers.

He said the commission had also invested in satellite monitoring capabilities to strengthen oversight of satellite communications and improve regulatory compliance.

According to Oshadami, the commission had established facilities to monitor developments in satellite communications and continued to invest in standard monitoring solutions to support effective regulation as new technologies gain prominence.

The PUNCH earlier reported that stakeholders in Nigeria’s telecommunications sector on recently backed the Nigerian Communications Commission’s draft business rules for Mobile Virtual Network Operators, while urging the regulator to strengthen enforcement to resolve persistent operational and commercial disputes between MVNOs and Mobile Network Operators.

Economy

Nigeria’s external reserves rise to $52.52bn – Cardoso

Published

4 days ago

July 22, 2026

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Governor of the Central Bank of Nigeria, Yemi Cardoso, says Nigeria’s foreign exchange reserves has presently risen to 52.52 billion dollars.

Cardoso said this on Tuesday in Abuja, while presenting a communique issued at the end of the 306th meeting of the apex bank’s Monetary Policy Committee (MPC).

The News Agency of Nigeria (NAN) reports that he had earlier announced the decision of the MPC to retain the Monetary Policy Rate (MPR) at 26.5 per cent.

The committee also retained the Standing Facilities Corridor around the MPR at +50/-450 basis points.

Cash Reserve Requirement (CRR) for Deposit Money Banks was retained at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent

According to Cardoso, gross external reserves rose to 52.52 billion dollars as of July 17, from 50.47 billion dollars
as at end-May.

He said that the rise was mainly as a result of receipts from crude oil-related taxes and third-party inflows.

“This is sufficient to finance approximately 11 months of imports of goods and services, surpassing the international benchmark of three months cover,” he said.

The CBN governor said that headline inflation (year-on-year) eased marginally to 15.91 per cent in June, from
15.93 per cent in May, ending the three consecutive months of uptick in price levels.

He said that the decline resulted from a decrease in the non-food component which offset the increase
in food inflation.

“Food inflation rose to 17.52 per cent in June, from 16.96 per cent in May, reflecting supply constraints.

“However, core inflation moderated to 15.92 per cent in June, from 16.82 per cent in May, largely on the back of exchange rate stability.

“Similarly, the 12-month average inflation rate sustained its decline to 17.63 per cent in June, from 18.36 per cent in May,’ ‘ he said.

He said that it marked the sixth month of consecutive moderation and reflected a slower pace of price increases over the medium term.’

According to him, on a month-on-month basis, headline inflation declined to 1.66 per cent in June from 1.75 per cent in May, driven by a slowdown in core inflation.

He said that real Gross Domestic Product (GDP) expanded by 3.89 per cent in the first quarter of 2026, compared with 4.07 per cent in the preceding period.

“This is largely driven by the resilience of the non-oil sector, which grew by 3.94 per cent, supported by improvements in telecommunications, financial services, trade, transportation, and other services sub-sectors.

“Oil sector GDP growth rate declined to 2.57 per cent in the first quarter of 2026 from 6.79 per cent in the fourth quarter
of 2025, due to the maintenance of oil facilities and installations.

“However, recent data showed improvement in economic activities as composite Purchasing Managers Index (PMI) rose to 50.1 index points in June from 49.6 index points in May,” Cardoso said.

He said that output growth was projected to remain resilient into 2026, anchored on the recent improvement in crude oil production, expansionary PMI and the positive impact of timely policy reforms.

“Inflation is projected to moderate further in the medium term on the back of continued stability in the foreign exchange market.

“This will also be due to lagged effect of previous monetary policy tightening and improved food supply conditions as the harvest season approaches,” he said.

He, however, said that the key risk to the outlook remained the severe and prolonged escalation of the
Middle East conflict.

“In the light of these considerations, the MPC reaffirmed its commitment to preserve price and financial system stability.

“The committee remains prepared to take appropriate policy measures guided by evolving macroeconomic conditions,” he said.

NAN