Economy
Currency Slump in West Africa Triggers Demand for Dollar Assets
By Aduragbemi Omiyale
The Head of Custody Services for RMB West Africa, Mr Abiodun Adebimpe, has attributed an increase in the demand for Dollar assets in West Africa to a slump in the currencies of countries in the region.
In recent times, most West African currencies, such as the Nigerian Naira (NGN) and the Ghanaian Cedis (GHC), have significantly weakened against the United States currency.
This has been blamed on the Russian-Ukraine war and the lingering impact of the COVID-19 pandemic, as the region relies heavily on importation.
The import-dependent nature of most West African markets implies huge demand for foreign exchange to pay import bills, and due to declining external reserves, the central banks are not able to promptly and adequately meet these demands, forcing businesses and investors to look for dollar assets to mitigate the damage.
Also, most West African economies are commodity-driven, and any development within the global economy that affects the supply and/or demand of commodities imports and exports portends significant currency weakening effects on the economies.
Mr Adebimpe noted in an opinion piece that there is also massive fiscal debt overhang in most West African markets, stressing that one of the effects is the need to borrow from bilateral and multilateral global lenders who demand deliberate local currency weakening by the local authorities by adjusting their official exchange rates accordingly to fight the demand for foreign currencies.
According to him, weaker local currencies make it more expensive and less attractive to convert to hard currencies.
He stated that these factors together have conspired to weaken West African currencies, and the outlook remains negative in short to medium term.
The loss of confidence in the local currencies means that they are no longer considered a stable store of value, he added.
Mr Adebimpe noted that these issues had pushed businesses and investors to hedge themselves and protect the value of their earnings and holdings in fast-depreciating local currencies.
According to him, investments in dollar-denominated securities such as Eurobonds, dollar and other hard currency equities, debt instruments in the form of government and corporate bonds, as well as interest-bearing US treasury instruments, have become the preferred holdings for investors. And demand is expected to grow.
However, he disclosed that most West African governments have started to adjust their official exchange rates and, in some cases, borrow in United States Dollars to shore up their external reserves though it may take some time to materialise.
But he stressed that there is a risk the Naira will continue to depreciate in the next few months because of the major difficulties in turning around through economic reforms in an economy of its size, adding that the expectation of weaker crude oil and natural gas prices will likely continue to pressure the currency.
“There is also the challenge of remittances flow to Nigeria: many companies are no longer supporting these transactions. Most importantly, tech investments which represented a significant increase in foreign direct investments (FDI), have all but reduced drastically.
“As a result of turbulent economic conditions, businesses are increasingly turning to advisors with extensive global know-how for expert advice,” he said.
By Aduragbemi Omiyale
The suspension earlier placed on Universal Insurance Plc, which prevented its shareholders and other investors from trading the company’s shares at the stock market, has been lifted.
The embargo was removed by the Nigerian Exchange (NGX) Limited on Wednesday, September 3, 2025, according to a notice signed by Obioma Oge for the Head of Issuer Regulation Department at NGX.
This came about two days after the suspension was first announced in a circular to the investing community over the failure of the underwriting firm and two others (Regency Alliance Insurance and International Energy Insurance) to submit their audited financial statements for the year ended December 31, 2024.
Universal Insurance did the needful after investors could not trade its securities on Customs Street, prompting the management of the exchange to announce resumption in the trading of equities of the organisation.
“The company has now filed its audited financial statements for the year ended December 31, 2024 and outstanding unaudited financial statements for 2025.
“In view of the company’s submission of its 2024 AFS, and pursuant to Rule 3.3 of the default filing rules, which states that the suspension of trading in the issuer’s securities shall be lifted upon submission of the relevant accounts provided the exchange is satisfied that the accounts comply with all applicable rules of the exchange. The exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension, that the suspension has been lifted.
“Trading License Holders and the investing public are hereby notified that the suspension placed on trading on the shares of Universal Insurance Plc was lifted today,” parts of the disclosure stated.
On Monday, the stock exchange suspended Universal Insurance in compliance with the provisions of Rule 3.1: Rules for Filing of Accounts and Treatment of Default Filing, which provides that if an issuer fails to file the relevant accounts by the expiration of the cure period, the exchange will: a) send to the issuer a second filing deficiency notification within two business days after the end of the cure period; b) suspend trading in the issuer’s securities; and c) notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension.
By Adedapo Adesanya
The Managing Director of the Nigerian Export-Import Bank (NEXIM), Mr Abba Bello, has urged the federal government to consider extending the recent six-month ban on Shea nut exports to one year to encourage further investment in domestic value addition.
Mr Bello, who commended the government’s ban, described it as a strategic step to support local processors and reduce production costs.
Recall that President Bola Tinubu recently placed a ban on the crop, as part of efforts to push local production and cut down on import dependency.
Speaking at an interactive session with All progressives Congress (APC) youth members in Abuja, Mr Bello noted that although Nigeria supplied 40–60 per cent of global shea, it had no industrial processing plants until 2018.
“When we came on board in 2018, not one industrial plant was processing shea in Nigeria.
“Since then, we’ve financed four, located in Ogun, Kano, and two in Niger State, all now in production,” he said.
He explained that a newly commissioned plant in Niger State had struggled to source raw shea due to competition from long-established foreign buyers who moved the product to neighbouring countries for processing.
“The export ban guarantees a stable supply chain for these plants and reduces input costs.
“I believe we’ll now have excess shea for local processing,” Mr Bello added.
Mr Bello also called for a wider policy to discourage the export of raw agricultural products.
“Let’s not stop at shea. We should begin phasing out the export of unprocessed commodities across other agricultural value chains.
“This is how we keep jobs and wealth at home,” he said.
On the broader export potential of Nigeria’s non-oil economy, Mr Bello described it as an “opportunity port” for young entrepreneurs, spanning agriculture, services, the creative sector, and solid minerals.
“We’re operating sub-optimally in all value chains today.
“Young Nigerians should invest where their passion lies. With energy and creativity, they can unlock massive export growth,” he said.
By Aduragbemi Omiyale
The revenue target for the 2025 fiscal year has been met by Nigeria despite the prices of crude oil in global market declining, President Bola Tinubu has declared.
Mr Tinubu disclosed this on Tuesday when he received a delegation of former members of the defunct Congress for Progressive Change (CPC) at the Presidential Villa in Abuja.
According to him, the revenue target was met in August and it was mainly driven by the non-oil exports, stressing that the nation has no reason to fear international economic developments because of the reforms introduced by his administration.
Nigeria set its crude oil benchmark for this year at $75 per barrel but for most part of 2025, the price has averaged below $70 per barrel.
“Today, I can stand here before you to brag — Nigeria is not borrowing. We have met our revenue target for the year and we met it in August. Let Trump do his worst, we are stable,” President Tinubu declared when he met the delegation comprising governors, lawmakers, and other political leaders drawn from across the federation.
“If non-oil revenue is going well, then we have no fear of whatever Trump is doing on the other side,” he added, noting that he’s impressed with the stability in the exchange rate market, also attributing this to reforms and fiscal discipline.
“Nobody is trading pieces of paper for exchange rate anymore. You don’t have to know a CBN governor to get forex. All you have to do is export, import, and create jobs for the people,” he said.
The President assured the CPC bloc of the ruling All Progressives Congress (APC) of his commitment to their shared ideals, noting, “I couldn’t appoint everybody at once, and thank you for your patience. I still have some slots for ambassadorial positions that so many people are craving for. But it’s not easy stitching those names.”
“When I see people like you, my determination is to work harder. We are certain we are going to succeed,” he added.
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