The Nigerian naira has tumbled to an unprecedented low, trading at N1,700 per dollar in the parallel market on October 14, 2024. This marks a 0.29% decline from its previous rate of N1,695/$1 recorded just days earlier, despite a surge in crude oil prices, which have now surpassed $80 per barrel.

While the parallel market saw a significant drop, the naira remained relatively stable in the official Investors and Exporters (I&E) window, closing at N1,641.27/$1. However, this still represents a 1.14% depreciation from its earlier rate of N1,622.57/$1.

The growing disparity between the official exchange rate and the parallel market continues to expose the pressure on Nigeria’s foreign exchange system.

The naira has experienced a steep decline throughout 2024, losing over 50% of its value since January, when it traded at N907.11/$1. By October, the currency had crossed the N1,500/$1 threshold. After a temporary recovery in March to N1,303/$1, the currency has been on a consistent downward slide.

Key Data Points:
Parallel market rate: Naira dropped to N1,700 per dollar on October 14.
I&E window: Closed at N1,641.27/$1, marking a 1.15% drop from N1,622.57/$1.
Trading volume: Surged to $616.73 million, indicating rising demand for dollars.

Despite global oil prices climbing above $80 per barrel, the naira continues to weaken, largely due to a persistent shortage of dollars, inflationary pressures, and reliance on the parallel market. While higher oil prices would typically provide relief for oildependent economies, Nigeria’s foreign exchange system remains under strain.

Though the naira’s breach of N1,700/$1 is concerning, there is hope for a shortterm rebound. Rising oil prices and new economic policies aimed at curbing demand for foreign exchange may help stabilize the currency, with a potential return to the N1,600/$1 range. However, the broader economic environment, including inflation and forex supply, will determine the naira’s future trajectory.

The Federal Government says it has adopted 88 international standards for Compressed Natural Gas products to bolster the ongoing rollout of various CNG initiatives across the country.

It said this procedure will ensure a smooth implementation of CNG systems in vehicles and to ensure the use of quality products in Nigeria.

The Director-General, Standard Organisation of Nigeria, Dr Ifeanyi Okeke, disclosed this in a statement issued on Sunday to commemorate the World Standards Day celebration in Abuja.

The annual celebration is themed, “Our Shared Vision for a Better World: Standards for Changing the Climate.”

Okeke said the event was aimed at raising awareness about the impact of standards on industrialisation and economic growth.

Recently, there have been growing concerns regarding the conversion of fossil fuel-powered vehicles to CNG vehicles, particularly about the risks of explosions and other safety hazards associated with the use of CNG as a fuel source.

These apprehensions stem from reports of incidents where improperly installed or maintained CNG systems have led to dangerous situations, raising questions about the adequacy of safety regulations and the need for more rigorous oversight.

But reacting, the SON DG said the government adopted international standards to ensure that CNG products meet rigorous safety and quality benchmarks, ultimately supporting the broader transition to sustainable energy solutions.

He said, “Standards are crucial in achieving these goals and in facilitating the development of renewable energy; energy efficiency and sustainable practices.

“The SON, in line with President Bola Ahmed Tinubu’s agenda, has adopted 88 international standards for Compressed Natural Gas products to support the success of CNG initiatives.

“Additionally, the SON is a member of the committee developing the Natural Gas Vehicles Monitoring System, aimed at overseeing the implementation of CNG systems in vehicles and to ensure the use of quality products in Nigeria.”

The SON boss said the organisation has also conducted factory visits to China and India to certify CNG components in its quest for safety and quality assurance.

“As we navigate the challenges of climate change, we must acknowledge that standards are vital for the successful implementation of mitigation strategies.

“Let me assure you that SON is dedicated to improving life through standardisation and quality assurance, fostering consumer confidence, and enhancing the global competitiveness of Made-in-Nigeria products.

“Through global collaboration, Standards bodies around the world align their activities with the Sustainable Development Goals for peace, prosperity and the welfare of people and the planet. International standards offer practical solutions which we must all identify with to become part of the solution since they are the backbone of global progress,” the statement concluded.

The naira continued its downward spiral against the dollar at the foreign exchange market following another round of fuel price increases by the Nigerian National Petroleum Company Limited.

This latest adjustment marks yet another spike in the pump price of Premium Motor Spirit this year.

According to data from the FMDQ, the naira weakened significantly, closing at N1625.13 per dollar on Wednesday, compared to N1561.76 exchanged on Tuesday.

This represents a depreciation of N63.37.

This drop comes after the naira had made some gains on Tuesday, appreciating by N73.39 against the dollar.

However, on Wednesday, the currency reversed its fortunes, also weakening in the black market where it fell to N1895 per dollar from N1780 the previous day.

Foreign exchange market turnover also witnessed a decline, with daily transactions dropping to $170.60 million on Wednesday from the $253.68 million recorded on Tuesday.

In response to the rising fuel costs, the NNPCL announced a fresh hike, increasing the price of petrol to N1030 per litre from N898 per litre, marking the second consecutive increase in September 2024.

An industry insider, speaking anonymously, commented, “The back-to-back price hikes will likely add more pressure on the already volatile exchange rate.”

A market analyst also noted, “We’re seeing the direct impact of NNPCL’s fuel price adjustments on the naira. With each increase, businesses and consumers face higher costs, which in turn affects demand for foreign exchange.”