Economy
Impact of Nigeria-South Africa Trade on NGN and ZAR Exchange Rates
Nigeria and South Africa are two of the largest economies in Africa. Their trade interactions hold a significant influence on the continent’s economic landscape. Notably, their bilateral trade relationship greatly impacts their respective currencies, the Nigerian Naira (NGN) and the South African Rand (ZAR). In this article, we will explore the impact of the Nigeria-South Africa trade on the NGN and ZAR exchange rates. Let’s jump in.
A Brief Look at the Trade Relations Between Nigeria and South Africa
Trade between Nigeria and South Africa has evolved significantly over the past few decades. Historically, Nigeria’s economy has been heavily reliant on oil exports, which account for a substantial portion of its GDP and foreign exchange earnings. Understandably, Nigeria is one of South Africa’s key suppliers of crude oil. In contrast, South Africa’s economy is more diversified, with strong mining, manufacturing, and agricultural sectors. South Africa exports manufactured goods and fruits to Nigeria.
Historically, trade volume has been skewed in favour of South Africa due to the diversity of its exports. However, Nigeria’s oil exports are significant in value and the trade volume is turning in favour of Nigeria. In 2022, Nigeria exported $1.72 billion to South Africa, while South Africa only exported $447 million to Nigeria. Notably, this is one of the biggest factors that impacts the exchange rate between the Naira and the Rand. Let’s take a look at other exchange rate dynamics between the Naira and the Rand.
Exchange Rate Dynamics Between NGN and ZAR
Exchange rates are influenced by a variety of factors. For Nigeria and South Africa, bilateral trade plays a crucial role in influencing the exchange rates of NGN and ZAR. Here is a brief look at how this works.
Trade Balance and Currency Valuation
The trade balance is the difference between exports and imports. It directly impacts the demand and supply of currencies. A trade surplus, where exports exceed imports, leads to higher demand for the exporting country’s currency, thereby appreciating its value. Conversely, a trade deficit can depreciate the currency.
In the context of Nigeria-South Africa trade, Nigeria currently experiences a trade surplus due to its oil exports to South Africa. This surplus increases demand for the Naira, contributing to its appreciation. On the other hand, South Africa’s importation of Nigerian oil increases the supply of Rands in exchange for Naira. This potentially leads to a depreciation of the Rand.
Currency Valuation Policies
Monetary policies set by the Central Bank of Nigeria (CBN) and the South African Reserve Bank (SARB) are critical in managing exchange rates. Their central banks intervene in the market to maintain some degree of control over currency fluctuations. Different monetary policies can influence currency values. For instance, if the CBN adopts a tighter monetary policy compared to the SARB, it could lead to higher interest rates in Nigeria. This can attract foreign capital and lead to an appreciation of the Naira.
Commodity Prices
Nigeria is a major oil exporter, and fluctuations in global oil prices can significantly impact its economy and currency. Higher oil prices tend to strengthen the Naira due to increased export revenues. On the other hand, South Africa is a major exporter of gold and other minerals. The prices of these commodities can influence the Rand. Higher gold prices usually strengthen the Rand.
Political and Economic Events
Political stability and significant economic events in Nigeria and South Africa have a direct bearing on their currencies. Elections, policy changes, and economic reforms can lead to fluctuations in the NGN and ZAR exchange rates. For example, political instability, corruption, and militant activities in oil-producing regions have historically affected investor confidence in Nigeria.
On the other hand, economic challenges, such as power shortages and high unemployment, also affect investor confidence in South Africa. Positive developments, such as successful economic reforms and political stability, can enhance the value of the Rand.
Beyond Bilateral Trade: External Factors
Several external factors can also influence the NGN and ZAR exchange rates beyond the Nigeria-South Africa trade. Here is a brief look at some of these factors:
- Speculative Trading – Currency markets are influenced by traders’ expectations about future movements in exchange rates. Both in Nigeria and South Africa, traders are always exchanging currencies and pushing their value. Notably, brokers with low ZAR minimum deposits and low NGN deposits are popular in these countries.
- Global Economic Conditions – A strong global economy can lead to increased demand for South African manufactured goods, boosting the Rand. Conversely, a global slowdown can have a negative impact.
- Foreign Investment Flows – Foreign investments in Nigeria’s oil sector can strengthen the NGN. Similarly, foreign direct investment (FDI) in South Africa can influence the Rand’s value.
- Market Sentiment – Sentiment about economic prospects in Nigeria and South Africa affects investor behaviour. Positive sentiment, driven by factors such as economic reforms or favourable economic data, can attract investment and strengthen currencies. Conversely, negative sentiment can lead to capital flight and currency depreciation.
Conclusion
Nigeria-South Africa trade presents a multifaceted relationship impacting their exchange rates. For Nigeria, oil exports remain a dominant force influencing the Naira, while South Africa’s diversified economy provides a broader base for the Rand. While the trade structure creates a demand-driven influence, external factors and policy interventions play a crucial role. Nigeria and South Africa will continue to strengthen their trade ties and each will navigate the complexities of the global economy. Either way, their exchange rates will remain sensitive to a multitude of factors.
By Adedapo Adesanya
The domestic supply of Premium Motor Spirit (PMS), also known as petrol, from the Dangote Refinery increased by 64.4 percent in December 2025, contributing to an enhancement in Nigeria’s overall petrol availability.
This is according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in its December 2025 Factsheet Report released on Thursday.
The downstream regulatory agency revealed that the private refinery raised its domestic petrol supply from 19.47 million litres per day in November 2025 to an average of 32.012 million litres per day in December, as it quelled any probable fuel scarcity associated with the festive month.
The report attributed the improvement to more substantial capacity utilisation at the Lagos-based oil facility, which reached a peak of 71 per cent in December.
The increased output from Dangote Refinery contributed to a rise in Nigeria’s total daily domestic PMS supply to 74.2 million litres in December, up from 71.5 million litres per day recorded in November.
The authority also reported a sharp increase in petrol consumption, rising to 63.7 million litres per day in December 2025, up from 52.9 million litres per day in the previous month.
In contrast, the domestic supply of Automotive Gas Oil (AGO) known as diesel declined to 17.9 million litres per day in December from 20.4 million litres per day in November, even as daily diesel consumption increased to 16.4 million litres per day from 15.4 million litres per day.
Liquefied Petroleum Gas (LPG) supply recorded modest growth during the period, rising to 5.2 metric tonnes per day in December from 5.0 metric tonnes per day in November.
Despite the gains recorded by Dangote Refinery and modular refineries, the NMDPRA disclosed that Nigeria’s four state-owned refineries recorded zero production in December.
It said the Port Harcourt Refinery remained shut down, though evacuation of diesel produced before May 24, 2025, averaged 0.247 million litres per day. The Warri and Kaduna refineries also remained shut down throughout the period.
On modular refineries, the report said Waltersmith Refinery (Train 2 with 5,000 barrels per day) completed pre-commissioning in December, with hydrocarbon introduction expected in January 2026. The refinery recorded an average capacity utilisation of 63.24 per cent and an average AGO supply of 0.051 million litres per day
Edo Refinery posted an average capacity utilisation of 85.43 per cent with AGO supply of 0.052 million litres per day, while Aradel recorded 53.89 per cent utilisation and supplied an average of 0.289 million litres per day of AGO.
Total AGO supply from the three modular refineries averaged 0.392 million litres per day, with other products including naphtha, heavy hydrocarbon kerosene (HHK), fuel oil, and marine diesel oil (MDO).
The report listed Nigeria’s 2025 daily consumption benchmarks as 50 million litres per day for petrol, 14 million litres per day for diesel, 3 million litres per day for aviation fuel (ATK), and 3,900 metric tonnes per day for cooking gas.
Actual daily truck-out consumption in December stood at 63.7 million litres per day for petrol, 16.4 million litres per day for diesel, 2.7 million litres per day for ATK and 4,380 metric tonnes per day for cooking gas.
By Adedapo Adesanya
The Securities and Exchange Commission (SEC) has introduced a comprehensive revision of minimum capital requirements for nearly all capital market operators, marking the most significant overhaul since 2015.
The changes, outlined in a circular issued on January 16, 2026, obtained from its website on Friday, replace the previous regime. Operators have been given until June 30, 2027, to comply.
The SEC stated that the reforms aim to strengthen market resilience, enhance investor protection, discourage undercapitalised operators, and align capital adequacy with the evolving risk profile of market activities.
According to the circular, “The revised framework applies to brokers, dealers, fund managers, issuing houses, fintech firms, digital asset operators, and market infrastructure providers.”
Some of the key highlights of the new reforms include increment of minimum capital for brokers from N200 million to N600 million while for dealers, it was raised to N1 billion from N100 million.
For broker-dealers, they are to get N2 billion instead of the previous N300 million, reflecting multi-role exposure across trading, execution, and margin lending.
The agency said fund and portfolio managers with assets above N20 billion must hold N5 billion, while mid-tier managers must maintain N2 billion with private equity and venture capital firms to have N500 million and N200 million, respectively.
There was also dynamic rule as firms managing assets above N100 billion must hold at least 10 per cent of assets under management as capital.
“Digital asset firms, previously in a regulatory grey area, are now fully covered: digital exchanges and custodians must maintain N2 billion each, while tokenisation platforms and intermediaries face thresholds of N500 million to N1 billion. Robo-advisers must hold N100 million.
“Other segments are also affected: issuing houses offering full underwriting services must hold N7 billion, advisory-only firms N2 billion, registrars N2.5 billion, trustees N2 billion, underwriters N5 billion, and individual investment advisers N10 million. Market infrastructure providers carry some of the highest obligations, with composite exchanges and central counterparties required to maintain N10 billion each, and clearinghouses N5 billion,” the SEC added.
By Aduragbemi Omiyale
The founder and chief executive of Austin Laz and Company Plc, Mr Asimonye Austin Lazarus Azubuike, has sold off about 52.24 million shares of the organisation.
The stocks were offloaded in 11 tranches at an average price of N4.36 per unit, amounting to about N227.8 million.
The transactions occurred between December 2025 and January 2026, according to a notice filed by the company to the Nigerian Exchange (NGX) Limited on Friday.
Business Post reports that Austin Laz is known for producing ice block machines, aluminium roofing, thermoplastics coolers, PVC windows and doors, ice cream machines, and disposable plates.
The firm evolved from refrigeration sales to diverse manufacturing since its incorporation in 1982 in Benin City, Edo State, though facing recent operational halts.
According to the statement signed by company secretary, Ifeanyi Offor & Associates, Mr Azubuike first sold 1.5 million units of the equities at N2.42, and then offloaded 2.4 million units at N2.65, and 2.0 million units at N2.65.
In another tranche, he sold another 2.0 million units at a unit price of N2.91, and then 5.0 million units at N3.52, as well as about 4.5 million at N3.87 per share.
It was further disclosed that the owner of the company also sold 9.0 million shares at N4.25, and offloaded another 368,411 units at N4.66, then in another transaction sold about 6.9 million units at N4.67.
In the last two transactions he carried out, Mr Azubuike first traded 10.0 million units equities at N5.13, with the last being 8.5 million stocks sold at N5.64 per unit.
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