Economy
Impact of Nigeria’s FX Reforms on Businesses Thrills BUA Group Owner
By Adedapo Adesanya
The chairman and founder of BUA Group, Mr Abdul Samad Rabiu, has lauded the impact of Nigeria’s foreign exchange reforms on businesses.
The businessman opined that Nigeria’s reforms have put the country on the global economic map, urging Britain and other Western allies to deepen partnerships and increase investments in Nigeria.
In a recent opinion piece published in the Telegraph of London, the philanthropist asserted that President Bola Tinubu’s economic reforms were positioning the country prominently on the global economic map.
He said in the UK newspaper that President Tinubu’s decisive leadership in reforms had cut Nigeria’s official consumption of petrol by 45 per cent.
According to him, as someone who has built multinational businesses across Africa, I know the vast opportunity the continent offers, and Nigeria in particular which alone accounts for a fifth of sub-Saharan Africa’s 1.2 billion people.
“Lowering barriers to trade is crucial, and for that Britain’s ETIP looks prescient.
“However, investment and business potential will remain discounted as long as African nations cling to state intervention from subsidies and price controls to exchange rate distortions all of which have consistently bred dysfunction and economic instability.
“Fortunately, Nigeria has now decisively turned a corner, embracing market economics under a liberalising government.”
He said that the shift in policies by the Tinubu administration had projected Nigeria towards a better future.
“In making that shift, Nigeria is taking the lead for a continent to follow. So many Nigerian administrations I have known have been hostage to economic events, doubling down time and again on state intervention rather than having the conviction to reform.
“This administration is proving different. After two years of difficult reforms, Nigeria under President Bola Tinubu is now poised to fulfil the promise of its vast natural resources, rapidly growing population of over 200 million people, and strategic coastal location along the Gulf of Guinea,” he said.
The BUA founder observed the drastic fall in official consumption of petrol as one of the gains of the reforms saying “First, the Tinubu administration removed a crippling fuel subsidy; the most significant policy reform in years.
“When President Tinubu ditched the fuel subsidy on his first day in office, criticism quickly followed. However, statistics must be understood in light of the wide-ranging distortions the subsidy created.”
“But that is not because Nigerians’ petrol use reduced by this amount. In reality the country was subsidising the region, with cross border fuel smugglers profiting from arbitrage.
“The illegal trade was so blatant that on a visit to neighbouring Niger a few years ago, then President Mohamed Bazoum even joked about it, thanking Nigeria for the cheap fuel. Though the move was politically unpopular, the subsidy had become unsustainable.
“Now, spending is being redirected toward development and infrastructure, laying the foundations for long-term growth,” he said.
Mr Rabiu also said that the country had moved from a fixed to a market-determined exchange rate.
According to him, previously, only select groups could access the official rate especially those with political connections; the rest had to rely on a more expensive parallel informal market determined by supply and demand.
“But selling Dollars at an artificially low rate only entrenched scarcity, a problem compounded by an opaque exchange mechanism that deterred foreign investment.
“Every two weeks, we used to make the 12-hour drive to Abuja to seek Dollar allocations for imports, camping out at the Central Bank for three or four days. Now, I no longer need to go. I’ve met the new Governor only once in two years because I haven’t had to.
“Monetary orthodoxy has finally arrived, bringing with it the liquidity that both domestic and foreign businesses depend on to smooth trade and de-risk investment.”
He further said that the shackles of politics were being prised from business, bringing greater certainty, fairness and stability to the landscape.
“Indeed, many of the benefits of reform are still to be felt by the wider public. But economic fundamentals must be fixed before that becomes possible.
“Now that Nigeria has made it through the toughest phase, its direction should be clear to investors.
“For Britain, the Enhanced Trade and Investment Partnership with Nigeria is a strategic bet on reform, resilience and long-term reward.
“Nigeria is now delivering its part of the bargain. As my country steadies itself, the UK, its Western allies and their companies should deepen this partnership,” he added.
By Adedapo Adesanya
Seven price gainers flipped recent declines at the NASD Over-the-Counter (OTC) Securities Exchange, raising the alternative stock market by 2.19 per cent on Friday.
According to data, the market capitalisation added N51.24 billion to end N2.389 trillion compared with the previous day’s N2.338 trillion, while the NASD Unlisted Security Index (NSI) climbed 85.65 points to close at 3,994.32 points, in contrast to the 3,908.67 points it ended a day earlier.
Business Post reports that the advancers were led by MRS Oil Plc, which improved its value by N13.00 to N200.00 per share from N187.00 per share, FrieslandCampina Wamco Nigeria Plc gained N7.40 to settle at N91.55 per unit versus the previous day’s N84.15 per unit, Central Securities Clearing System (CSCS) Plc appreciated by N6.08 to N71.00 per share from N64.92 per share, Afriland Properties Plc added 66 Kobo to finish at N17.17 per unit versus N16.51 per unit, IPWA Plc rose 37 Kobo to N4.15 per share from N3.78 per share, First Trust Mortgage Bank Plc grew by 11 Kobo to N1.20 per unit from N1.09 per unit, and Food Concepts Plc went up by 10obo to N3.70 per share from N3.60 per share.
On the flip side, there were two price losers led by Geo-Fluids Plc, which depreciated by 28 Kobo to N3.32 per unit from N3.60 per unit, and Industrial and General Insurance (IGI) Plc dropped 5 Kobo to sell at 45 Kobo per share from 50 Kobo per share.
Yesterday, the volume of trades went down by 92.0 per cent to 3.7 million units from 45.8 million units, the value of transactions fell by 59.4 per cent to N84.5 million from N208.2 million, while the number of deals went up by 7.7 per cent to 42 deals from 39 deals.
CSCS Plc remained the most traded stock by value (year-to-date) with 32.6 million units exchanged for N1.9 billion, trailed by Geo-Fluids Plc with 119.6 million units valued at N470.3 million, and Resourcery Plc with 1.05 billion units traded at N408.6 million.
Resourcery Plc closed the day as the most traded stock by volume (year-to-date) with 1.05 billion units sold for N408.7 million, followed by Geo-Fluids Plc with 119.6 million units worth N470.3 million, and CSCS Plc with 32.6 million units worth N1.9 billion.
By Adedapo Adesanya
The Naira weakened further against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, February 20, by N4.97 or 0.37 per cent to N1,346.32/$1 from the N1,341.35/$1 it was transacted on Thursday.
Heightened FX demand tilted the market toward the downside yesterday, exerting upward pressure on rates despite efforts by the Central Bank of Nigeria (CBN) to stabilise the foreign exchange market.
Also in the official market, the domestic currency depreciated against the Pound Sterling during the session by N9.39 to sell for N1,815.25/£1 versus the previous day’s N1,805.86/£1, and lost N7.33 against the Euro to close at N1,584.62/€1 compared with the preceding session’s N1,577.29/€1.
The story was not different for the Nigerian Naira at the GTBank FX desk, where it depleted against the Dollar by N7 on Friday to quote at N1,356/$1 versus the N1,349/$1 it was sold a day earlier, but remained unchanged in the black market at N1,370/$1.
It was observed that risky sentiment among Foreign Portfolio Investors (FPIs) contributed to the FX market, amid fears of hot money flight due to capital gains tax and other factors.
As for the cryptocurrency market, it was mostly green yesterday in reaction to a Supreme Court verdict dismissing a fresh 10 per cent global levy by President Donald Trump.
The apex court on Friday described Mr Trump’s global tariff rollout as illegal. The decision did not clarify what should happen to tariff revenue already collected, and it doesn’t necessarily spell the end of the trade agenda, with multiple legal and executive avenues still available.
Litecoin (LTC) grew 2.7 per cent to $55.00, Cardano (ADA) appreciated 2.6 per cent to trade at $0.2815, Binance Coin (BNB) expanded by 2.6 per cent to $627.19, Dogecoin (DOGE) recouped 1.3 per cent to quote at $0.1, Ripple (XRP) jumped 0.7 per cent to $1.43, Solana (SOL) improved by 0.5 per cent to $84.15, and Ethereum (ETH) soared 0.1 per cent to $1,962.78.
However, Bitcoin (BTC) lost 0.2 per cent to sell for $67,850.49, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Dipo Olowookere
A further 0.99 per cent was gained by the Nigerian Exchange (NGX) Limited on Friday after a positive market breadth index supported by 53 price gainers, which outweighed 23 price losers, representing bullish investor sentiment.
During the trading day, the trio of Jaiz Bank, Fidson, and NPF Microfinance Bank chalked up 10.00 per cent each to sell for N11.00, N86.90, and N6.27, respectively, while Deap Capital appreciated by 9.96 per cent to N7.62, and Mutual Benefits increased by 9.94 per cent to N5.42.
Conversely, Secure Electronic Technology shed 10.00 per cent to trade at N1.62, Sovereign Trust Insurance slipped by 9.73 per cent to N2.32, Ellah Lakes declined by 7.91 per cent to N12.80, International Energy Insurance retreated by 5.56 per cent to N3.40, and ABC Transport moderated by 5.26 per cent to N9.00.
Data from Customs Street revealed that the insurance counter was up by 2.52 per cent, the industrial goods sector grew by 2.28 per cent, the banking space expanded by 1.43 per cent, the consumer goods index gained 1.23 per cent, and the energy industry rose by 0.05 per cent.
As a result, the All-Share Index (ASI) went up by 1,916.20 points to 194,989.77 points from 193,073.57 points, and the market capitalisation moved up by N1.230 trillion to N125.164 trillion from Thursday’s N123.934 trillion.
Yesterday, investors traded 820.5 million stocks valued at N28.3 billion in 63,507 deals compared with the 898.5 million stocks worth N38.5 billion executed in 61,953 deals, showing a jump in the number of deals by 2.51 per cent, and a shortfall in the trading volume and value by 8.68 per cent and 26.49 per cent apiece.
Closing the session as the most active equity was Mutual Benefits with 79.0 million units worth N427.1 million, Zenith Bank traded 44.0 million units valued at N3.8 billion, Chams exchanged 43.9 million units for N182.0 million, AIICO Insurance transacted 42.4 million units valued at N179.8 million, and Veritas Kapital sold 36.0 million units worth N90.6 million.
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