Economy
Official FX Rate to Hit N800/$1 Soon—EIU
By Adedapo Adesanya
The Economic Intelligence Unit (EIU) has predicted that the Central Bank of Nigeria (CBN) will revert to heavier management of the exchange rate in late 2023 to tame rapid price rises, as evidence shows that the rates are widening across several windows after a float of the currency in June.
Business Post reported that the Naira closed at N775.76/$1 at the Investors and Exporters (I&E) window last Friday, while it sold at an average of N867 to a Dollar at the parallel market.
The EIU, which is an arm of London-based The Economist Magazine, stated in its Country Report on Nigeria, released over the weekend, that the wide gap between the I&E window and the parallel market before the FX unification is making a return due to illiquidity.
According to the EIU, “The new exchange rate is classed by the CBN as a ‘managed float’, but there are inconsistencies in application to a more liberal currency regime as foreign-exchange access restrictions still apply to an array of imports. This will unnerve foreign investors, and a backlog of FX orders the CBN failed to clear before opening up the market, and deeply negative real interest rates will keep liquidity tight.
“Along with high and rising inflation, the naira will be under significant pressure in the near term. The CBN lacks experience in conducting monetary policy under a float, and the need to control rapidly increasing inflation will become more acute over time.
“Our forecast is finely balanced, but we expect a return to heavier exchange-rate management from the second half of 2023 as the naira slides beyond N800:US$1, from N770:US$1 in early July.
“The CBN (according to official data) has the wherewithal to increase market intervention; 98 per cent of foreign reserves are liquid, and import cover is projected at 6 to 8 months in 2023. Based on this, we expect the currency to depreciate at a slower rate than fundamentals would imply over the medium to long run, given structurally high inflation.
“The average rate is forecast at N815:US$1 in 2024, sliding to N1,018:US$1 by end-2027, with a spread of 10-15 per cent against the black-market over the period.”
It also noted that rapid increases in inflation were expected from June 2023 as the price effects of market reforms transmit immediately into the system, even as it anticipated that the Monetary Policy Committee (MPC) would ramp up a monetary tightening cycle that began in early 2022, starting with the next meeting in late July.
“Interest-rate rises totalling 500 basis points are expected before end-2023, meaning 1,300 basis points will have been added since the cycle began and a peak rate of 23.5% – the highest level since 1993. However, this forecast is caveated with risks; the MPC attaches a large weight to economic growth in its decision-making formula, Mr Tinubu is opposed to high-interest rates, and the CBN’s independence is questionable.
“The small size of the financial sector (the private-sector credit/GDP ratio is just 22%) blunts the effectiveness of interest rates in countering inflation. We forecast that the CBN will maintain a tight stance until 2025, by which point disinflation and sustained monetary easing in advanced markets will justify aggressive interest-rate cuts to 14 per cent by 2026.
“Inflation will at all times be above the nine per cent target ceiling, but the CBN is expected to prioritise stimulus over its price stability mandate,” it added.
The EIU also forecast that Nigeria’s real Gross Domestic Product (GDP) growth will slow to 2.3 per cent in 2023 and 2.5 per cent in 2024, dragged down by rapidly rising inflation and a newly intensified phase of monetary tightening.
“Consumers and businesses will fail to adapt, causing domestic demand to contract for a second and third year running in 2023 and 2024, respectively. In a country with 2.5 per cent population growth, this marks an unusually long stretch of decline.
“Headline growth will be kept positive by net exports. Oil export volumes are expected to increase as security in the Niger Delta improves, complemented by the replacement of fuel and chemical imports in 2024 as a new refinery ramp up production,” it added.
In terms of the external sector, it noted that devaluation of the naira would support a widening of the current-account surplus in 2023 to 2.6 per cent of GDP, as import demand was compressed.
It added that without adequate FX supply and the Naira depreciating, petrol prices without subsidy could only go higher, adding that the impending protest and strike by organised labour may further worsen an already dire situation.
By Adedapo Adesanya
The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said ongoing reforms and strategic policy implementation in Nigeria’s petroleum sector are driving significant investments and strengthening the country’s position as a leading energy destination in Africa.
Mr Lokpobiri stated this at the Management Retreat of the Ministry of Petroleum Resources, where he stressed the need for improved institutional performance and accountability to sustain growth in the sector.
According to the Minister, the federal government has deliberately pursued far-reaching reforms aimed at creating a stable and investor-friendly environment capable of attracting local and foreign capital into the oil and gas industry.
“From far-reaching institutional reforms to the effective implementation of strategic policies, we have remained committed to carrying all stakeholders along, fostering a conducive environment for investments to flourish,” Mr Lokpobiri said.
“As a result, our petroleum sector has witnessed significant investments that continue to strengthen Nigeria’s position as a leading energy destination.”
The Minister noted that the gains recorded in the sector were the product of collective efforts across the Ministry and its agencies, commending staff for their dedication and professionalism.
“The Management Retreat of the Ministry of Petroleum Resources provided an important platform to reiterate that these accomplishments would not have been possible without the collective dedication, professionalism and teamwork of every staff member across the Ministry and its agencies,” he stated.
Mr Lokpobiri said the retreat, themed Driving Institutional Performance and Accountability in the Petroleum Sector for Sustainable National Development, underscored the importance of continuous improvement in service delivery and operational efficiency.
Drawing lessons from the theme, he urged officials of the Ministry and regulatory agencies to intensify efforts toward enhancing institutional effectiveness and strengthening governance frameworks.
“I encouraged that we must redouble our efforts, continuously improve the quality of our services, and strengthen institutional performance,” he said.
The Minister further emphasised the continued relevance of fossil fuels in the global energy mix, stressing that Nigeria must leverage its hydrocarbon resources to drive economic growth while ensuring citizens benefit from ongoing reforms.
“With fossil fuel as the dominant source of energy, we must ensure that Nigerians experience the benefits of our progress and that Nigeria remains the preferred investment destination in Africa and a globally competitive hub for energy investments,” Mr Lokpobiri added.
By Aduragbemi Omiyale
The N3.2 billion rights issue of Universal Insurance Plc has been extended by almost two weeks after securing regulatory approval.
The exercise was earlier scheduled to close on June 10, 2026, but will now close on Monday, June 22, 2026.
The extension was granted by the Securities and Exchange Commission (SEC) after a request from the underwriting organisation.
In the rights issue, Universal Insurance is offering to shareholders 2,666,666,667 ordinary shares of 50 Kobo each at N1.20 per share on the basis of one new ordinary share for every existing six ordinary shares held as of the close of business on Monday, March 30, 2026.
Subscription for the acquisition of the company’s extra shares opened on Wednesday, May 13, 2026.
The extension gives investors more time to increase their stake in the insurance firm, which intends to use proceeds from the exercise to boost its capital base, as mandated by the National Insurance Commission (NAICOM).
Insurance companies operating in Nigeria have been given till July 31, 2026, to shore up their capital base or pack up. Operators can also explore a merger if they wish.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited opened its doors to market participants in four days last week as a result of a public holiday observed on Friday, June 12, for 2026 Democracy Day in the country.
In the week, investors bought and sold 4.964 billion shares worth N207.521 billion in 235,966 deals, as against the 3.966 billion shares valued at N175.659 billion that exchanged hands in 343,587 deals a week earlier.
Analysis showed that the financial services industry led the activity chart with 4.116 billion shares valued at N84.607 billion in 96,165 deals, contributing 82.92 per cent and 40.77 per cent to the total trading volume and value, respectively.
The services sector transacted 232.479 million shares worth N4.955 billion in 17,614 deals, while the industrial goods segment exchanged 144.988 million shares worth N39.077 billion in 24,775 deals.
Sterling Holdings, FCMB, and Access Holdings were the most traded stocks with 2.883 billion units sold for N36.188 billion in 15,533 deals, accounting for 58.09 per cent and 17.44 per cent of the total trading volume and value, respectively.
A total of 40 equities appreciated in the week versus 23 equities in the previous week, 53 equities depreciated versus 65 equities a week earlier, and 53 equities remained unchanged versus 58 equities in the preceding week.
ABC Transport was the best-performing equity for the week after it gained 25.60 per cent to trade at N7.80, Consolidated Hallmark appreciated by 23.13 per cent to N8.25, Abbey Mortgage Bank rose by 21.93 per cent to N11.40, Infinity Trust Mortgage Bank grew by 20.32 per cent to N11.25, and Austin Laz soared by 15.16 per cent to N4.33.
The worst-performing equity last week was Fidson Healthcare because of its 25.86 per cent loss, closing at N101.20. Neimeth declined by 19.14 per cent to N8.55, Union Homes REIT shed 17.36 per cent to close at N70.00, SUNU Assurances slipped by 11.38 per cent to N3.97, and Unilever Nigeria dropped 10.26 per cent to trade at N140.00.
As for the index movement, the All-Share Index (ASI) and the market capitalisation chalked up 0.88 per cent each to settle at 244,738.74 points and N156.970 trillion, respectively.
Similarly, all other indices finished higher apart from the pension, AFR Bank Value, MERI Growth, MERI Value, consumer goods, Lotus II, industrial goods, sovereign bond and commodity indices, which fell by 0.03 per cent, 1.20 per cent, 0.21 per cent, 1.61 per cent, 0.54 per cent, 0.51 per cent, 1.00 per cent, 2.04 per cent and 0.34 per cent, respectively.
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