Economy

Nigeria Likely to Adopt Single Exchange Rate 2020—Fitch

Published

7 years ago

13/04/2019

By Dipo Olowookere

The multiple exchange rate system operated by the Central Bank of Nigeria (CBN) has been talked about and kicked against by several financial experts and economists in and outside the country. They have always argued that the system was absurd.

In the wake of this present administration, former CBN Governor and now Emir of Kano, Mr Sanusi Lamido, said the system was making few individuals millionaires and billionaires at the expense of the nation.

This is because the central bank has a rate of N305 per Dollar that is far lesser than the rates at the black market as well as the investors and exporters forex window of N363 to a Dollar.

The traditional ruler had argued that with the present system, it was easy for few powerful Nigerians to obtain forex at the interbank rate and make a profit of over N50 per Dollar selling to black market traders.

But the CBN has always argued that it would gradually unify the different rates at the forex market segments.

Business Post reports that the major market windows in the country are the Interbank, Investors & Exporters, Bureau De Change (BDC) and the black market.

Recently, renowned rating agency, Fitch, released a report, where it said the country’s apex bank will likely not carry out any forex reform this year but in 2020.

Before the February 2019 presidential, which was won by the incumbent President Muhammadu Buhari, his opponent at the poll, Mr Atiku Abubaker, had promised a unification of the rates to allow a more free-market.

With the election over, Fitch said in the short-term, “We believe that there will be little change to Nigeria’s current exchange rate regime in the immediate aftermath of the February 2019 general election.

“The official interbank rate currently sits at N305.87/$, while the ‘investor and export’ window (also known as the Nigerian Autonomous Foreign Exchange Rate, NAFEX) is trading at N362.68/$.

“The official interbank rate is officially pegged to the US dollar at the current level and used primarily as a reference rate for transactions by the state-owned Nigerian National Petroleum Corporation (NNPC).

“The NAFEX rate – at which investors, importers and non-state oil exporters buy and sell FX – is ostensibly free-floating but is also in effect managed.

“We believe that the authorities will remain determined – and able – to hold rates around their existing levels in the months ahead,” Fitch said in the report obtained by Business Post.

In terms of ability, Nigeria’s total gross reserves stood at $43.1 billion in late January – some 6.2 percent above levels seen at this point last year.

Import cover stands at more than 8 months, which although down from the October 2017 level of more than nine months is well above Nigeria’s recent low of 4.8 months in 2014.

“This level of reserves will give the authorities the resources to keep the market supplied in the context of slowing dollar inflows,” the agency stated.

Fitch said it has the strong believe that in the long-term, “We expect a shift away from the multi-tiered exchange rate and a consolidation of exchange rates, initially around the prevailing NAFEX level.

“However, this is unlikely to take place in 2019, and we thus expect the interbank rate – the rate that we forecast – to end the year at N306/$.

“Rather, we believe it is far more likely to take place in 2020, alongside the projected completion of the 650,000bbl/day Dangote oil refinery,” it said.

According to the National Bureau of Statistics (NBS), Nigeria’s downstream oil and gas sector imported petrol worth N1.02 trillion in the third quarter of 2018 alone. The coming online of the refinery will go some of the way towards easing the size of the import bill and making the effective devaluation of the interbank rate (which is used primarily for fuel imports) less painful.

“We thus expect the new Naira rate to end the year at some N370$.

“Following the unification, we believe that a gradual depreciation of the new Naira rate is likely. The authorities are likely to continue heavily managing its exchange rate regime.

“However, deteriorating fundamentals will put downward pressure on the currency. This underpins our forecast that the Naira will end 2020 at N370/$, and will continue to depreciate steadily thereafter.

“We expect the price of Brent crude to average $75.0/bbl in 2019 and $82.0/bbl in 2020, and while this is an improvement on the $71.7/bbl in 2018, oil prices will remain well below their 2011-14 highs, and risks are weighted to the downside,” Fitch said.

“Our Oil & Gas team currently see limited growth in the sector beyond 2019 given a very restricted pipeline of projects, although there is an upside risk that genuine reform of the industry will spur a resurgence in much needed investment.

“In the context of only muted growth in oil revenues, we expect the Central Bank of Nigeria (CBN) to allow the unified rate to devalue slowly in a bid to ease the pressure on reserves,” it concluded.

Economy

Dangote Values Refinery at $39bn, Seeks $1bn in Private Placement

Published

12 hours ago

11/06/2026

Adedapo Adesanya

By Adedapo Adesanya

Dangote Petroleum Refinery is seeking to raise about $1 billion through a private placement that values the company at $39.1 billion.

According to reports, the refinery is offering 3 billion ordinary shares at $0.35 per share. Investors must subscribe for at least 1 million shares, equal to $350,000, with additional subscriptions accepted in multiples of 500,000 shares. The shares will be subject to a 365-day lock-up period from allotment.

It was reported that demand for the offer has already exceeded $2 billion, suggesting that the placement may be oversubscribed.

The operation is already attracting the interest of local investors. Recall that Nigerian billionaire, Mr Femi Otedola, has committed $100 million, while Afrobeats superstar, Mr David Adeleke, popularly known as Davido, also announced he would participate.

The proceeds will be used for expansion projects and general corporate purposes as the refinery deepens its role in Nigeria’s fuel supply market.

The facility has a nameplate capacity of 650,000 barrels per day and began fuel production in 2024. It produces diesel, aviation fuel, naphtha and premium motor spirit.

Standard Bank Group has also said it plans to play a leading role in the refinery’s future public listing, after the facility completed test runs at 700,000 barrels per day. It aims to reach 1.4 million barrels per day by 2028.

The fundraising is likely to renew expectations of a future public listing with a major stakeholder, Mr Aliko Dangote, saying the refinery could be listed, though no timeline was disclosed in the memorandum.

The current placement is seen as an early step that could expand ownership ahead of any future initial public offering (IPO).

Mr Dangote plans to sell between 5 and 10 per cent of the refinery on five major African exchanges: the Nigerian Exchange (NGX), the Johannesburg Stock Exchange (JSE), the BRVM, the Nairobi Securities Exchange (NSE) and the Ghana Stock Exchange (GSE).

It has appointed Stanbic IBTC Capital, Vetiva Capital Management and FirstCap to lead the planned initial public offering of its refinery business on the Nigerian Exchange.

Economy

Investors Lose N3.1bn as NASD Exchange Remains Red

Published

15 hours ago

11/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange entered a third straight day of losses after it fell by 0.12 per cent on Wednesday, June 10.

The depletion trimmed the market capitalisation further by N3.1 billion to N2.590 trillion from N2.593 trillion, and cut the NASD Unlisted Security Index (NSI) by 5.19 points to 4330.12 points from 4,335.31 points.

11 Plc lost N22.21 during the session to finish at N221.00 per share versus the previous day’s N243.21 per share, MRS Oil Plc depreciated by N6.90 to N158.10 per unit from N165.00 per unit, and Central Securities Clearing System (CSCS) Plc decreased by N2.81 to N78.32 per share from N81.13 per share.

On the flip side, FrieslandCampina Wamco Nigeria Plc went up by N9.27 to N183.08 per unit from N173.81 per unit, Nitrox Industrial Gases Plc added N1.92 to its value to close at N23.80 per share compared with the preceding day’s N21.88 per share, and Food Concepts Plc gained 10 Kobo to exchange at N2.58 per unit, in contrast to Tuesday’s closing price of N2.48 per unit.

At the close of business, the volume of securities traded by investors contracted by 92.6 per cent to 117,374 units from 1.6 million units, and the value of securities moderated by 80.5 per cent to N12.2 million from N62.3 million, while the number of deals increased by 4.9 per cent to 43 deals from 41 deals.

Great Nigeria Insurance (GNI) Plc finished the day as the most traded stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units traded for N6.5 billion, and CSCS Plc with 65.2 million units exchanged for N4.4 billion.

GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million

Economy

Naira Crashes to N1,362.05/$1 at Official Window After N1.50 Loss

Published

16 hours ago

11/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira fell against the United States Dollar by N1.50 or 0.11 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) to sell at N1,362.05/$1 on Wednesday, June 10, compared with the N1,360.55/$1 it traded on Tuesday.

Also, the local currency lost N4.33 against the Pound Sterling in the official window yesterday to trade at N1,827.33/£1 versus the preceding day’s N1,823.00/£1, and depreciated against the Euro by N1.74 to quote at N1,575.35/€1, in contrast to N1,573.61/€1 of the previous session.

However, at the GTBank forex desk, the Naira gained N3 against the US Dollar to sell at N1,370/$1 versus N1,373/$1, and at the parallel market, it remained unchanged at N1,380/$1.

Updated data from the Central Bank of Nigeria (CBN) showed that foreign reserves surged further due to additional inflows from various sources. Nigeria’s gross external reserves increased to $50.439 billion, its highest level since March 2026, reflecting sustained inflows from oil revenue and other FX sources.

Also, the International Monetary Fund (IMF) has said increased confidence in the Naira, supported by lower and more stable inflation, would encourage households, businesses and investors to hold more local currency assets and reduce reliance on foreign currencies.

The global lender, in a recent assessment, stressed the importance of strengthening the CBN’s operational framework and aligning liquidity management operations more closely with monetary policy objectives.

In the cryptocurrency market, there were recoveries from recent losses as US headline inflation rose an expected 0.5 per cent in May, but the beat on the core rate — which cuts out food and energy costs — pleased markets. The core rate, though, rose just 0.2 per cent in May against forecasts for 0.3 per cent.

The print reinforces the view that the US Federal Reserve will keep interest rates at 350-375 basis points at its June 17 meeting, but is likely to increase rates by 25 basis points by the end of the year.

Cardano (ADA) went up by 2.4 per cent to $0.1647, Bitcoin (BTC) rose by 2.3 per cent to $62,794.09, Binance Coin (BNB) jumped 1.8 per cent to $596.23, Ethereum (ETH) grew by 1.7 per cent to $1,658.12, and Solana (SOL) also soared by 1.7 per cent to $65.23.

Further, Dogecoin (DOGE) appreciated by 1.5 per cent to $0.0849, Ripple (XRP) expanded by 0.4 per cent to $1.11, and TRON (TRX) increased by 0.05 per cent to $0.3218, while the US Dollar Tether (USDT) lost 0.10 per cent to close at $0.9989, and the US Dollar Coin (USDC) declined by 0.01 per cent to $0.9997.