Economy
Nigeria Likely to Adopt Single Exchange Rate 2020—Fitch
By Dipo Olowookere
The multiple exchange rate system operated by the Central Bank of Nigeria (CBN) has been talked about and kicked against by several financial experts and economists in and outside the country. They have always argued that the system was absurd.
In the wake of this present administration, former CBN Governor and now Emir of Kano, Mr Sanusi Lamido, said the system was making few individuals millionaires and billionaires at the expense of the nation.
This is because the central bank has a rate of N305 per Dollar that is far lesser than the rates at the black market as well as the investors and exporters forex window of N363 to a Dollar.
The traditional ruler had argued that with the present system, it was easy for few powerful Nigerians to obtain forex at the interbank rate and make a profit of over N50 per Dollar selling to black market traders.
But the CBN has always argued that it would gradually unify the different rates at the forex market segments.
Business Post reports that the major market windows in the country are the Interbank, Investors & Exporters, Bureau De Change (BDC) and the black market.
Recently, renowned rating agency, Fitch, released a report, where it said the country’s apex bank will likely not carry out any forex reform this year but in 2020.
Before the February 2019 presidential, which was won by the incumbent President Muhammadu Buhari, his opponent at the poll, Mr Atiku Abubaker, had promised a unification of the rates to allow a more free-market.
With the election over, Fitch said in the short-term, “We believe that there will be little change to Nigeria’s current exchange rate regime in the immediate aftermath of the February 2019 general election.
“The official interbank rate currently sits at N305.87/$, while the ‘investor and export’ window (also known as the Nigerian Autonomous Foreign Exchange Rate, NAFEX) is trading at N362.68/$.
“The official interbank rate is officially pegged to the US dollar at the current level and used primarily as a reference rate for transactions by the state-owned Nigerian National Petroleum Corporation (NNPC).
“The NAFEX rate – at which investors, importers and non-state oil exporters buy and sell FX – is ostensibly free-floating but is also in effect managed.
“We believe that the authorities will remain determined – and able – to hold rates around their existing levels in the months ahead,” Fitch said in the report obtained by Business Post.
In terms of ability, Nigeria’s total gross reserves stood at $43.1 billion in late January – some 6.2 percent above levels seen at this point last year.
Import cover stands at more than 8 months, which although down from the October 2017 level of more than nine months is well above Nigeria’s recent low of 4.8 months in 2014.
“This level of reserves will give the authorities the resources to keep the market supplied in the context of slowing dollar inflows,” the agency stated.
Fitch said it has the strong believe that in the long-term, “We expect a shift away from the multi-tiered exchange rate and a consolidation of exchange rates, initially around the prevailing NAFEX level.
“However, this is unlikely to take place in 2019, and we thus expect the interbank rate – the rate that we forecast – to end the year at N306/$.
“Rather, we believe it is far more likely to take place in 2020, alongside the projected completion of the 650,000bbl/day Dangote oil refinery,” it said.
According to the National Bureau of Statistics (NBS), Nigeria’s downstream oil and gas sector imported petrol worth N1.02 trillion in the third quarter of 2018 alone. The coming online of the refinery will go some of the way towards easing the size of the import bill and making the effective devaluation of the interbank rate (which is used primarily for fuel imports) less painful.
“We thus expect the new Naira rate to end the year at some N370$.
“Following the unification, we believe that a gradual depreciation of the new Naira rate is likely. The authorities are likely to continue heavily managing its exchange rate regime.
“However, deteriorating fundamentals will put downward pressure on the currency. This underpins our forecast that the Naira will end 2020 at N370/$, and will continue to depreciate steadily thereafter.
“We expect the price of Brent crude to average $75.0/bbl in 2019 and $82.0/bbl in 2020, and while this is an improvement on the $71.7/bbl in 2018, oil prices will remain well below their 2011-14 highs, and risks are weighted to the downside,” Fitch said.
“Our Oil & Gas team currently see limited growth in the sector beyond 2019 given a very restricted pipeline of projects, although there is an upside risk that genuine reform of the industry will spur a resurgence in much needed investment.
“In the context of only muted growth in oil revenues, we expect the Central Bank of Nigeria (CBN) to allow the unified rate to devalue slowly in a bid to ease the pressure on reserves,” it concluded.
By Adedapo Adesanya
The Senate has passed a bill to repeal and re-enact the law establishing the National Insurance Commission (NAICOM), paving the way for the regulatory agency to be renamed the Insurance Regulatory Commission (IRC).
The legislation, titled the Insurance Regulatory Commission (Establishment) Bill, 2026, was passed after the Senate considered and adopted the report of its committee on banking, insurance and other financial institutions.
The Chairman of the committee, Mr Adetokunbo Abiru, the senator representing Lagos East, who presented the report, stated that the proposed legislation was necessary because the existing National Insurance Commission Act of 1997 had become outdated and no longer reflected the realities of Nigeria’s evolving insurance industry or global regulatory standards.
According to the Senate, the decision to change the Commission’s name was informed by the need to eliminate confusion associated with the existing designation and to better reflect the institution’s regulatory mandate within Nigeria’s insurance industry.
The bill also provides legal protection for the commission and its officers against adverse claims arising from the lawful execution of their statutory duties.
However, he noted that the commission’s enabling law had become obsolete, exposing significant regulatory gaps that required urgent legislative intervention.
‘The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” the lawmaker said.
He explained that the new legislation seeks to strengthen the independence of the commission by empowering it to make regulatory decisions without undue influence in the country’s insurance sector.
According to him, the bill also enhances the commission’s authority to exchange information and collaborate with domestic and international regulatory bodies, issue regulations, guidelines, standards and directives on insurance-related matters, and intervene more effectively in financially distressed insurance companies to protect policyholders and preserve financial stability.
This marks yet another move to strengthen the country’s insurance sector following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) of 2025 and the industry-wide recapitalisation exercise, which will wrap up by July 31.
By Adedapo Adesanya
About 143 companies that successfully passed the technical and prequalification stages of the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) 2025 Licensing Round will, today, compete for 50 oil and gas blocks at the commercial bid conference in Abuja, the final stage in the allocation process for the assets.
The commission said only the prequalified companies have been invited to attend the event, which will hold at the Conference Centre of the Transcorp Hilton Hotel, Abuja, stressing that participation is strictly by invitation.
The commercial bid conference will determine the successful bidders for oil and gas assets located across Nigeria’s producing and frontier basins.
The 50 blocks comprise 16 onshore blocks and 18 shallow water blocks in the Niger Delta, one deep offshore block, three onshore blocks in the Benin Basin, four in the Anambra Basin, four in the Chad Basin, and four in the Benue Trough.
According to the commission, the winning bids will be determined through a transparent evaluation process based on clearly defined commercial parameters. These include the signature bonus offered by bidders, the proposed work programme commitment and the level of performance security provided. The final selection will be based on a weighted technical and commercial score.
The licensing round is being conducted under the provisions of the Petroleum Industry Act (PIA) 2021, which requires a transparent and competitive process for the award of petroleum assets.
NUPRC had announced the commencement of the 2025 Licensing Round on November 11, 2025, before opening the online bid portal on December 1, 2025, to enable interested companies to register and participate in the exercise.
To ensure prospective investors fully understood the requirements, the commission organised a pre-bid conference on January 14, 2026, at Eko Hotels and Suites, Lagos. The event provided detailed explanations on the licensing guidelines and bidding procedures to registered participants and other stakeholders.
Registration and submission of prequalification documents closed on February 27, 2026, while the prequalification evaluation was completed on March 16, 2026.
NUPRC disclosed that 286 companies initially submitted applications for prequalification.
Following the evaluation process, 196 companies were cleared to participate in the technical and commercial bid stages.
The prequalified 143 companies eventually submitted a total of 200 bids for the available oil and gas blocks. These companies are now set to compete at the commercial bid conference, where the financial offers will be opened and evaluated to determine the eventual winners.
The licensing round is expected to attract fresh investment into Nigeria’s upstream petroleum sector, boost exploration activities across both producing and frontier basins, increase crude oil and gas reserves, and support the country’s drive to grow production and government revenue.
It also underscores the regulator’s commitment to implementing a transparent, competitive and investor-friendly licensing regime under the Petroleum Industry Act.
By Adedapo Adesanya
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained all key monetary policy parameters following the conclusion of its two-day meeting on July 21, 2026, on Tuesday, maintaining its tight monetary policy stance to curb inflation and support macroeconomic stability.
According to the Governor of the apex bank, Mr Yemi Cardoso, who chaired the committee, the Monetary Policy Rate (MPR), which serves as the benchmark interest rate, remains at 26.50 per cent. The MPC also retained the asymmetric corridor around the MPR at +50 basis points and -450 basis points.
In addition, the Cash Reserve Ratio (CRR) for commercial banks was left unchanged at 45.00 per cent, while the CRR for merchant banks remains at 16.00 per cent. The committee also retained the CRR on non-Treasury Single Account (Non-TSA) public sector deposits at 75.00 per cent, with the liquidity ratio at 30.00 per cent.
The decision reflects the apex bank’s continued commitment to containing inflationary pressures through a restrictive monetary policy while safeguarding the resilience of Nigeria’s financial system amid ongoing macroeconomic adjustments.
By keeping all policy tools unchanged, the MPC signalled its intention to continue managing excess liquidity in the banking sector and maintain stability in financial markets.
The move is also expected to provide greater policy certainty for investors and businesses monitoring the country’s monetary policy direction.
The latest decision also means borrowing costs are likely to remain elevated in the near term as the central bank continues to prioritise price stability over monetary easing.
Analysts had expected the CBN committee to retain the rate after Nigeria’s headline inflation came in at 15.91 per cent as of June 2026, marking a slight decline from 15.93 per cent in May.
However, even as overall price growth has moderated significantly compared to previous periods, food inflation remains a persistent challenge, accelerating to 17.52 per cent in June.
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