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 Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
By Adedapo Adesanya
Oil prices were up on Thursday amid investors’ expectations for the Federal Reserve to cut interest rates, while stalled Ukraine peace talks tempered expectations of a deal restoring Russian oil flows.
Brent crude gained 59 cents or 0.94 per cent to trade at $63.26 a barrel and the US West Texas Intermediate (WTI) crude appreciated by 72 cents or 1.22 per cent to $59.67 per barrel.
The market ticked up on expectations that a US rate cut will support the world’s largest economy and oil demand, after data showed employment is slowing.
Markets are pricing in an 89 per cent chance of a cut when the Federal Reserve meets on December 9-10, significantly higher than rate-cut bets just a couple of weeks ago, according to the CME FedWatch tool.
Support also came as the dollar edged lower for its 10th straight day of losses against a basket of major currencies, making crude cheaper for buyers using other currencies.
Analysts noted that escalating tensions between the US and Venezuela were also supporting prices on concerns of a drop in crude supplies from the South American country, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
US President Donald Trump’s administration is ratcheting up pressure on Venezuelan President Nicolás Maduro, signalling the possibility of a US invasion.
The perception that progress on a peace plan for Ukraine was stalling also supported prices, after President Trump’s representatives emerged from peace talks with the Kremlin with no resolution in sight.
Expectations of an end to the war had pressured prices lower, as traders anticipated a deal would allow Russian oil back into an already oversupplied global market..
Meanwhile, Ukraine continued its assault on Russia’s energy infrastructure as it hit the Druzhba oil pipeline in Russia’s central Tambov region, the fifth attack on the pipeline that sends Russian oil to Hungary and Slovakia.
Kpler noted that Ukraine’s drone campaign against Russian refining infrastructure has affected production to down around 5 million barrels per day between September and November, a 335,000 barrels per day year-on-year decline, with gasoline (petrol) hit hardest and gasoil output also materially weaker.
US crude and fuel inventories rose last week as refining activity picked up, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories rose by 574,000 barrels to 427.5 million barrels in the week ended November 28, the EIA said, compared with analysts’ expectations in a Reuters poll for an 821,000-barrel draw.
Fitch Ratings on Thursday cut its 2025-2027 oil price assumptions to reflect market oversupply and production growth that is expected to outstrip demand.
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