Economy

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

Published

2 years ago

June 17, 2024

Naijablitz

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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

Nigerian Airline Operators Issue 7-Day Ultimatum Over Jet Fuel Crisis, Warn Of Flight Shutdown

Published

12 hours ago

April 25, 2026

Admin

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Nigeria’s aviation industry is staring at a possible collapse within days as airline operators warn that flight operations may grind to a halt nationwide if the federal government fails to urgently intervene in the escalating aviation fuel crisis.

Operators under the Airline Operators of Nigeria (AON) say the cost of Jet A1 has reached “unsustainable” levels, with prices reportedly surging by as much as 250 percent in Nigeria, far above global increases estimated at about 70 percent.

Industry players say the distortion is pushing airlines to the brink, with operating costs now heavily dollarised while access to credit remains trapped in a high-interest environment reportedly ranging between 30 and 35 percent.

Air Peace Chairman Allen Onyema warned after a tense industry meeting that carriers may have no choice but to suspend operations if nothing changes within seven days.

“We are being pushed to the wall. At these levels, no airline can continue to operate sustainably,” Onyema said, adding that carriers may be forced to ground operations if no solution emerges within days.

Onyema said Nigerian airlines are under severe pressure due to a sharp rise in aviation fuel prices, which he argued is disproportionately higher than global trends following the U.S.–Iran conflict.

He explained that while aviation fuel prices typically move in line with crude oil increases, Nigeria has recorded a surge of about 250 to 270 percent, compared to roughly 70 percent in other countries, including elsewhere in Africa.

Onyema said the situation is making airline operations unsustainable and has pushed operators to the brink, prompting urgent discussions between government officials, airline operators, and fuel marketers to find a resolution.

“We have deliberated extensively today, and they have also shared their pain points. We have also shared ours. We are going to go back and wait for the outcome of their deliberations with the regulators,” he said.

“When they do that, we expect that within the next 48 hours, something drastic will be done, because no airline in this country will be able to fly within the next seven days if nothing is done.

“Not because airlines do not want to fly, but because the pricing, not only of our tickets but also of the fuel products we need to operate, may become unsustainable.

“We are already operating under heavy financial pressure, borrowing at 30 to 35 percent interest just to stay afloat, and we cannot continue to spend all our revenue on fuel alone.”

“The good news, as we observed yesterday, is that the President is listening, and this is very encouraging for us. We are hopeful. The country should also be hopeful, because the President, even while we were there, made a call to the honourable minister,” he added.

The warning comes amid a worsening standoff between airlines, petroleum marketers, and regulators over pricing mechanisms for aviation fuel, which operators insist has become artificially inflated through inefficiencies and market manipulation.

A crucial meeting convened by the Minister of Aviation and Aerospace Development, Festus Keyamo (SAN), ended in deadlock, with no agreement reached on how to immediately crash or stabilise Jet A1 prices.

Keyamo admitted after the closed-door session that the crisis was threatening the survival of domestic airlines, adding that discussions would continue for 48 to 72 hours in search of a compromise.

He also acknowledged that airlines may be forced to increase ticket prices further if the situation persists, a development that could push air travel beyond the reach of ordinary Nigerians already battling inflation and a weakened currency.

Despite the stalemate, the minister said the meeting was held with presidential backing, noting that President Bola Tinubu had been briefed and was monitoring developments closely.

Operators, however, remain unconvinced, insisting that repeated assurances without concrete price relief will not prevent what they describe as an imminent aviation shutdown.

Economy

See Dollar to Naira exchange rate today, April 23, 2026

Published

2 days ago

April 23, 2026

EMMANUEL AGAJI

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The Nigerian Naira displayed a slight softening against the US Dollar in the early trading hours of Thursday, April 23, 2026, across both the official and parallel foreign exchange markets. Financial analysts are keeping a close eye on the market as mid-week demand for the greenback continues to influence rate stability.

In the Nigerian Foreign Exchange Market (NFEM), the Naira opened the trading day with a modest depreciation.

According to real-time data from the FMDQ Securities Exchange, the Naira is currently trading at an average of 1,351.59 NGN per 1 USD. This represents a marginal decline compared to the opening rates observed earlier in the week, where the currency had seen support near the 1,347 NGN level.

Market turnover at the official window remains a key point of focus for investors, as the Central Bank of Nigeria (CBN) maintains its policy of managed float to curb excessive volatility while ensuring essential sectors have access to foreign currency.

Parallel Market Trends

The informal or parallel market continues to trade at a significant premium compared to the official rate. Early morning reports from Bureau De Change (BDC) operators in major hubs such as Lagos (Ikeja and Broad Street), Abuja (Wuse Zone 4), and Kano suggest that the Dollar is being exchanged at rates ranging between 1,465 NGN and 1,480 NGN.

The spread between the NFEM and the parallel market currently sits at approximately 113 Naira, a gap that experts attribute to the unmet demand from small-scale importers and individuals seeking personal travel allowances (PTA) who often find the official channels more stringent.

Economic Factors and Outlook

The current pressure on the Naira is largely attributed to sustained demand for the Dollar to fund international trade obligations and service foreign debt. Additionally, the recent fluctuations in global oil prices—Nigeria’s primary source of foreign exchange—continue to dictate the strength of the nation’s external reserves.

As the trading session progresses into the afternoon, participants expect the rate to stabilize, though any significant intervention from the apex bank or shifts in market liquidity could alter the closing figures for the day. Market watchers are advised to monitor official closing reports for a comprehensive view of the day’s performance.

Economy

FG, states, LGs share N2.036trn March revenue

Published

3 days ago

April 23, 2026

Admin

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The Federation Account Allocation Committee (FAAC), has shared N2.036 trillion among the Federal Government, states and the Local Government Councils (LGCs).

The revenue was shared at the April meeting of FAAC in Abuja.

The N2.036 trillion total distributable revenue comprised statutory revenue of N1.320 trillion, Value Added Tax (VAT) revenue of N515.391 billion and Agumentation of N200 billion.

A communiqué issued by FAAC indicated that total gross revenue of N2.364 trillion was available in the month of March.

It said that total deduction for cost of collection was N81.084 billion, while total transfers, refunds and savings was N246.872 billion and Agumentation of N200 billion.

The communiqué said gross statutory revenue of N1.699 trillion was received for the month of March 2026.

This is higher than the sum of N1.561 trillion received in the preceding month by N137.914 billion.

“Gross revenue of N664.425 billion was available from VAT in March 2026.

“This was lower than the N668.450 billion available in the month of February 2026 by N4.025 billion,” it said.

The communiqué said from the N2.036 trillion total distributable revenue, the Federal Government received total sum of N789.159 billion and the state governments received total sum of N657.596 billion.

It said that the LGs received N468.826 billion, while the sum of N120.759 billion (13 per cent of mineral revenue) was shared to the benefiting State as derivation revenue.

“On the N1.320 trillion distributable statutory revenue, the Federal Government received N632.260 billion and the state governments received N320.691 billion.

“The LGs received N247.239 billion and the sum of N120.759 billion (13 per cent of mineral revenue) was shared to the benefiting States as derivation revenue,” it said.

It said that from the N515.391 billion distributable VAT revenue, the Federal Government received N51.539 billion, the state governments received N283.465 billion and the LGs received N180.387 billion.

It said that from the N200 billion Augmentation, the Federal Government received N105.360 big government received N53.440 billion, and the LGs received N41.200 billion.

It said that in March, Companies income Tax (CIT), CGT, SDT and Excise Duty increased significantly.

It said that Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Oil and Gas Royalty, Import Duty and CET decreased considerably, while VAT decreased marginally.

(NAN)