Economy
CBN Faces More FOREX Crisis As Naira Drops By 40%
By Dipo Olowookere
The Nigerian foreign exchange market has in recent times been facing challenges as the naira has lost close to 40 per cent in 18 months.
Specifically, the naira has lost so much of its value on the streets even as the gap between the official exchange rate and the parallel market has continued to widen beyond control.
Between December 2014 and June 2016, the value of the naira depreciated by nearly 40 per cent at the Central Bank of Nigeria (CBN) window from N165 to the dollar which it was, at the end of December 2014.
The depreciation at the parallel market has been more alarming.
Yet, the pressure on the foreign exchange market is not being helped by the declining value of Nigeria’s major source of foreign exchange, oil, at the international market.
The price of crude has been yo-yoing, thereby impacting heavily on Nigeria’s revenue and foreign exchange reserve, which has so far declined by 18.6 per cent to $28.06 billion from the $34.46 billion it was at the beginning of 2015.
In trying to stem the problem posed by the foreign exchange challenge, the CBN has chosen the path of capital control by embarking on measures to reduce the rate of foreign exchange outflow from the reserves.
One, CBN has exempted 41 items from the list of eligible items for foreign exchange, and closed the retail Dutch Auction System (rDAS) in favour of an order-based system.
It has also reduced daily and annual limits on naira cards outside the shores of the country from $150,000 to $50,000 annually and $300 daily, and backed the move by banks to stop accepting foreign currency deposits as well as the recent ban on the usage of naira denominated cards abroad.
Asides this, it also reduced its weekly foreign exchange sales to BDCs from $30,000 to $10,000 and eventually stopped the sales out rightly early this year.
Economic experts have however suggested that the nation’s solution to the current foreign exchange shortfall is to find a way to supplement foreign exchange inflow through increased export earnings, foreign direct investments and Diaspora inflows.
Of all these three sources, Diaspora inflows appear the most readily available source the country can harness to solve the macro-economic challenges posed by foreign exchange shortfall. This is because remittances are the second largest source of foreign exchange in Nigeria after the oil sector.
In 2015, an estimated $21 billion flowed into the country, including $5.7 billion sent from the United States and about $3.7 billion from the United Kingdom.
For 2016, the World Bank estimates that nearly $34 billion in remittances will flow into Sub-Saharan Africa from the more than 30 million Africans living outside their countries of origin. Nearly two-thirds of this expected inflow in 2016, according to World Bank data, will come into Nigeria.
Perhaps it is this huge significance of the money transfer sector to the nation’s economic life that informed the recent efforts by CBN to ostensibly clean the sector. In a recent policy pronouncement, CBN advised citizens to “beware of the unwholesome activities of some unlicensed International Money Transfer Operators” currently plying their trade in the country.
Citing “the greater economic good of Nigeria,” the Central Bank stated that it would “not condone any attempt aimed at undermining the country’s foreign exchange regime”.
Consequently, the regulator first revoked the licences of all but three money transfer companies that had been doing money transfer business in the country, before later approving a second batch of eleven other new international money transfer operators to bring the total number of approved operators for now to fourteen.
The three MTOs that first passed the CBN litmus test were Western Union, MoneyGram and RIA. The second batch of newly registered eleven operators included Trans-East Remittance LLC; WorldRemit Limited; UAE Exchange Centre LLC; Home Send S.C.R.L; Cash point Limited; Weblink International Limited; DT&T Corporation Limited; Wari Limited; Small World Financial Services Group Limited; Fiem Group LLC and CP Express Limited.
According to industry watchers and analysts who have lauded CBN’s recent steps, operators’ practices have not been adding much value to the Nigerian economy or benefit an average Nigerian, it only helps the parallel market to survive and flourish as individual accounts are mostly used during transactions.
Thus, CBN in its bid to ensure the money transfer is legal and transparently beneficial to the Nigerian economy has ordered all licensed MTOs in line with the CBN circular on the sale of foreign currency proceeds of July 22, 2016 to remit foreign currency to respective agent banks in Nigeria for disbursement in naira to the beneficiaries while the foreign currency proceeds are to be sold to Bureaux De Change, for onward retail to end users.
The apex bank also ordered all MTOs to only send 50% of their remittance going forward. In what looks like a mission to protect Nigerians against fraud and other negative antics of many money transfer organizations in the country that is undermining the apex bank’s bid to ensure liquidity and increase the availability of dollars in the system, CBN seems to have taken the least fraud prone approach of allowing only three companies that have physical operations on the ground in Nigeria to continue to function while insisting on others newly allowed into the segment to physically set up shop in the country.
Of the three approved frontline MTOs in this new dispensation, MoneyGram, for example has Lagos as its operational hub for Anglophone West Africa while both Western Union and MoneyGram have strong partnership with almost all deposit banks in addition to a large pool of agents across the country.
It is also a fact that operationally, these three MTOs control over 70 percent of the market. Given the fraud-prone nature of the money transfer business, the need for operators to have traceable presence in the country cannot be over-emphasized.
It may be argued that we are in an age where innovative technology is changing the way customers meet their financial needs, hence the growing importance of mobile money and preference for strong digital platform against virtual or physical network presence by MTOs.
On this score also, an array of digital channels and convenient solutions being marshalled by the leading operators in the market are already becoming a disruptive force. In this regard, the operators’ suite of self-service products and offerings coupled with the strength of their physical network have in no small measure promoted the culture of mobile money as a strength of the cashless economy drive being championed by CBN.
The mobile money culture expectedly brings financial inclusion to millions of people – allowing them to perform financial transactions with a new level of ease and convenience.
Mobile money has emerged as the primary payments system in countries where there was limited or no access to formal financial services. The World Bank estimates that less than a quarter of Africa’s 1.4 billion people have a bank account, but 70 per cent have a mobile phone.
That has made the continent particularly fertile ground for the mobile-payments business. In its 2015 figures, one of the two foremost operators said its digital channel showed impressive growth throughout the year with fourth-quarter transactions up 42 per cent and revenue growth of 48 per cent.
Additionally, it revealed that 14 per cent of its money transfer transactions and 12 per cent of its total money transfer revenue came from digital in the quarter, representing over $163 million when annualizing fourth-quarter revenue.
The noticeable trend in the operations of this MTO of note is its significant progress toward its declared goal to have 15 per cent to 20 per cent of its money transfer revenue coming from digital in 2017.
By working hard to completely overhaul on-line experience, launch kiosks and add millions of mobile wallets with a view to connecting to almost 2 billion bank accounts, this operator aims at pushing digital capabilities further into the physical world through customer profiles and new point of sale technologies which will ensure delivery of a more seamless customer experience.
The merging of physical locations and virtual and online network is no doubt a key competitive advantage while the increasing growth of agents’ location is an extremely important extension of the value adding profile of money transfer business to all stakeholders. Among others, it enhances the reduction of fraud in the transaction process. Of significance also are the various issues relating to pricing of transactions. Pricing can vary from market to market as fees reflect the many benefits offered by the service sought.
A study of rates and fees across several markets however shows that Nigeria is well within range. For example, as indicated on the company’s website, the MoneyGram global average fee including foreign exchange, of less than 5 percent of the face value of the money transferred is substantially lower than the average fee for an international bank transfer and is very competitive in the fund transfer industry.
This fee is lower than the World Bank and G8 goals to provide affordable remittance services to underdeveloped parts of the world. Of additional benefit to the country however is the fact that local agents retain approximately half of the fee paid by the consumer, which in turn is re-invested in local businesses.
Source: http://www.vanguardngr.com/2016/09/cbn-faces-forex-crisis-naira-drops-40-18-months/
By Aduragbemi Omiyale
One of the nation’s top brewers, Guinness Nigeria Plc, is paying an interim dividend of N7 per share to its shareholders for the period ended June 30, 2026.
The funds should, on August 10, 2026, hit the bank accounts of investors whose names appear in the Register of Members as of the close of business on Wednesday, July 29, 2026, a regulatory note from the organisation disclosed.
The firm has informed shareholders who have yet to complete the e-dividend registration to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on its website, so as not to be left out of the cash reward for the first half of this year.
In the first six months of 2026, Guinness Nigeria grew its net profit by 53.33 per cent to N25.3 billion from N16.5 billion in the same period of 2025, amid improved top line and better management of administrative, marketing and distribution costs.
The revenue for the period under consideration rose to N265.0 billion from N237.0 billion, boosted by domestic sales of its products, which accounted for N260.9 billion compared with N237.0 billion a year earlier. The balance was from its export sales. This showed that over 98 per cent of the company’s earnings are from sales in Nigeria.
In the first half of the year, Guinness Nigeria improved its gross profit to N97.5 billion from N89.4 billion in the same period of 2025, as its finance income, arising from financial assets and others, stood at N1.2 billion compared with N110.7 million in H1 of 2026.
By Adedapo Adesanya
The federal government has reaffirmed its commitment to mobilising domestic capital to finance Nigeria’s long-term development, saying stronger local investment will be critical to accelerating economic transformation and attracting private sector participation.
The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, stated this while speaking at the 6th Annual General Assembly of the Association of Nigerian Development Finance Institutions (ANDFI) in Abuja on Thursday.
The Minister’s remarks were contained in a statement on Friday, July 24, by his Senior Special Assistant on Communications and Press Secretary, Mrs Maryann Duke.
Addressing the conference with the theme, Unlocking Domestic Capital for Development Financing, Mr Oyedele said Nigeria must harness its domestic financial resources and strengthen institutions that can channel capital into productive sectors of the economy.
He noted that despite increasingly difficult global financing conditions, the country possesses substantial domestic savings, institutional assets and private capital that can be leveraged to fund infrastructure, industrialisation, agriculture, housing, innovation and other critical sectors.
According to the minister, domestic capital should not be viewed as an alternative to foreign investment but as the foundation for attracting sustainable international investment.
“Our focus is to build an economy where confidence leads capital. By strengthening macroeconomic stability, deepening our financial markets and empowering development finance institutions to catalyse private investment, we are unlocking Nigeria’s enormous domestic potential to finance inclusive and sustainable growth,” Mr Oyedele said.
He said the federal government’s ongoing economic reforms under the Renewed Hope Agenda are beginning to deliver positive outcomes, including improved investor confidence, stronger external reserves, enhanced revenue generation and renewed international confidence in Nigeria’s economy.
The Minister identified five priority areas for unlocking domestic capital, including expanding investment opportunities for households, deepening institutional capital through pension and insurance assets, strengthening credit enhancement mechanisms, broadening local currency financing through the capital market, and building stronger development finance institutions capable of attracting larger volumes of private investment.
Mr Oyedele also called on development finance institutions to move beyond conventional lending by helping to structure bankable projects, reduce investment risks, support policy reforms and create financing ecosystems that encourage greater private sector participation.
He reaffirmed the Federal Government’s commitment to working with development finance institutions, financial regulators, investors and development partners to develop a financing framework that will support businesses, create jobs, accelerate industrialisation and promote inclusive economic growth across the country.
By Modupe Gbadeyanka
The plan by the National Pension Commission (PenCom) to increase mandatory pension contributions and introduce an additional 3 per cent mandatory annual contribution equivalent to 3 per cent of the total wage bill is not going down well with the Organised Private Sector in Nigeria.
This group comprises the Manufacturers Association of Nigeria (MAN), the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Nigeria Employers’ Consultative Association (NECA), the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small Scale Industrialists (NASSI), and 25 sectoral employer associations.
In a statement made available to Business Post, the group described the proposal as a “Greek gift” to Nigerian workers because of the prevailing economic conditions in the country.
OPS argued that under the Pension Reform Act 2014, Nigeria’s minimum pension contribution already stands at 18 per cent of an employee’s monthly emoluments, comprising 10 per cent from the employer and 8 per cent from the employee.
“This is broadly comparable with the OECD average effective mandatory pension contribution rate of 18.8 per cent at the average-wage level in 2024.
“Nigeria’s existing contribution rate therefore cannot reasonably be regarded as inadequate, based on contribution percentages alone.
“Any proposal for an increase must be supported by Nigeria – specific actuarial evidence demonstrating that the current rate is insufficient and that a higher rate would not undermine employment, wages, compliance and enterprise sustainability,” it noted.
OPSN said the government’s attention should be directed toward reining in inflation, preserving workers’ immediate cash flow, and promoting business sustainability to create decent jobs and improve welfare.
It also asked for a detailed assessment to determine the likely effects of the proposal on employment costs, wage growth, recruitment, job security, investment, production costs, inflation, business formalisation and MSME sustainability.
The group stated that while the private sector is not entirely opposed to future adjustments, any increase must be the product of constructive, transparent social dialogue among all critical stakeholders and delayed until broader economic stability is achieved.
It stressed that no adjustment should be introduced without adequate consideration of its impact on existing jobs, future recruitment, inflation rate and the capacity of businesses to remain competitive and sustainable.
Also commenting on the matter in Lagos, the Director-General of NECA, Mr Adewale-Smatt Oyerinde, described the proposed hike as both premature and counterproductive, noting that, “The OPSN supports efforts aimed at strengthening Nigeria’s pension system and improving retirement outcomes for workers.
“However, announcing that contribution rates will increase while consultations are still ongoing risks prejudging the outcome of the process and reducing subsequent stakeholder engagements to a mere formality.”
He stressed that previous adjustments to pension contribution rates were preceded by extensive engagement among government, employers, organised labour and other relevant stakeholders.
“Any proposed adjustment must be supported by credible actuarial, economic and employment-impact assessments. It must also emerge from genuine and transparent social dialogue. Retirement security should not be pursued in a manner that threatens the businesses and jobs upon which the pension system itself depends,” he submitted.
On his part, the DG of MAN, Mr Segun Ajayi-Kadir, said, “Businesses are already contending with high energy costs, elevated interest rates, exchange-rate volatility, multiple regulatory obligations, weak consumer demand and rising production expenses. Imposing an additional statutory payroll cost without a comprehensive impact assessment will place further pressure on already struggling enterprises.”
He explained that higher employment costs could compel businesses to slow recruitment, postpone wage reviews, reduce staff strength, increase outsourcing, suspend expansion plans or pass additional costs to consumers through higher prices.
“The proposed increase may directly raise the existing employee contribution, but its wider consequences could still be borne by workers through weaker wage growth, reduced employment opportunities, job losses and higher prices of goods and services,” he added
The DG of NACCIMA, Mr Sola Obadimu, in his submission, warned against imposing additional financial levies on a struggling business environment, saying, “At a time when businesses are struggling to recover from prolonged economic pressures and the Federal Government is implementing reforms intended to improve competitiveness, imposing another statutory financial obligation on employers could undermine the benefits of those reforms.”
He maintained that government policies must be properly coordinated and evaluated based on their cumulative impact on businesses.
“A reform cannot be considered successful merely because it promises improved retirement benefits. Its impact on employment, investment, wage growth, prices, compliance and business survival must also be carefully considered,” he stated.
The DG of NASSI, Mr Ifeanyi Oputa, while speaking on the issue, stressed that micro, small and medium-sized enterprises would be disproportionately affected by any increase in mandatory employer pension contributions.
“MSMEs operate with narrow margins and limited access to affordable finance. Many are still struggling with rising energy costs, declining purchasing power, multiple levies and increasing operating expenses. An additional statutory burden could threaten their survival and discourage them from employing workers formally,” he said.
Mr Oputa warned that the proposal could also deepen non-compliance and push more businesses and workers into informal employment arrangements outside the pension system.
“A policy intended to strengthen the pension system must not produce the opposite result by shrinking the number of formal employers and contributors,” he added.
