Economy
We Won’t Float Naira Except FX Supply Exceeds Demand—CBN
By Dipo Olowookere
The World Bank and the International Monetary Fund (IMF) should bury the thought that Nigeria will float the Naira when the country is still battling with the foreign exchange (FX) supply shortage, the Central Bank of Nigeria (CBN) has submitted.
Despite the rising price of crude oil, Nigeria, which relies heavily on the commodity to earn forex, is still unable to shore up its external reserves as a result of the shortage in production.
The Organisation of the Petroleum Exporting Countries (OPEC), during the COVID-19 pandemic in 2020, slashed the production quota of members by 10 per cent to help raise the prices at the market after slumping to $20 per barrel and even -$0 at a point.
But after prices stabilised, it gradually increased the oil output of member countries, including Nigeria. However, due to some issues back home, the nation has not been able to meet its threshold, making it very difficult to take advantage of prices hitting above $100 per barrel.
The shortage in FX in Nigeria has put the local currency under pressure, making it trade at about N419/$ at the official exchange rate window and over N585/$1 at the black market.
For IMF and World Bank, the idea of operating more than one exchange rate regime is killing the Naira but the CBN said it will continue with the managed float FX system until the issues with the supply end of the curve are resolved.
At the moment, the apex bank intervenes in the market by supplying forex to traders, who must not sell to certain users because they are not qualified for FX. These are importers of items that have local substitutes like milk, sugar, toothpick, rice and others.
The CBN Governor, Mr Godwin Emefiele, while speaking on Thursday on the sidelines of the 2022 Spring Meetings of the IMF and World Bank in the United States, said Nigeria really wants to operate a single forex regime, but doing that at the moment would hurt the economy because of the FX supply issues.
“They want us to free the exchange rate and you do know that this has some impacts on the exchange rate itself.
“When you allow that to happen, it will have an uncontrollable spiral on the Naira but with the managed float system, we have some measures in place to help control the spiral,” he said.
However, he assured the global financial institutions that Nigeria will look inwards to solve the FX issue, noting that the country’s “situation is very peculiar and that is the reason we have always called on the IMF to show understanding and it has, indeed, shown understanding.”
“Our resolutions at the IMF have always suggested that governors should go back to their countries and think of homegrown solutions,” he said, noting that “the IMF and World Bank provide advice that we work with.”
“Even at some of our private meetings, we realise that there are challenges, leading us to adopt homegrown solutions to address them. We cannot adopt what is being proposed; we cannot adopt a free float of our currency. With the reduction of forex for rice or maize, demand will drop. As it drops, we can adjust the exchange rate. We will continue to engage the IMF and World Bank,” he declared.
By Adedapo Adesanya
The third trading week of 2025 ended on a positive note at the NASD Over-the-Counter (OTC) Securities Exchange, with seven equities on the platform inspiring a 1.24 per cent growth.
Consequently, the market capitalisation of the bourse increased by N21.56 billion during the five-day trading week to N1.075 trillion from the N1.053 trillion quoted in the preceding week (Week 2) as the NASD Unlisted Security Index (NSI) expanded by 37.98 points to 3,111.91 points from the 3,073.93 points it ended in the preceding week.
In the period under review, the volume of transactions went down by 42.1 per cent to 9.45 million units from the 16.30 million units in the previous week, as the value of trades declined by 53.1 per cent to N48.4 million from the N104.11 million, with these transactions completed in 122 deals involving 15 different stocks.
Industrial and General Insurance (IGI) Plc gained 50 per cent in the week to close at 36 Kobo per share versus 34 Kobo per share, Mixta Real Estate Plc increased by 20 per cent to end at N2.58 per unit compared with the previous week’s N2.15 per unit, and Okitipupa Plc rose by 10 per cent to N39.59 per share from N35.99 per share.
Further, UBN Property Plc grew by 10 per cent to N2.20 per unit from N2.02 per unit, Newrest Asl Plc jumped by 9.9 per cent to N31.38 per share from N28.53 per share, FrieslandCampina Wamco Plc surged by 3.7 per cent to N39.65 per unit from N38.22 per unit, and 11 Plc advanced by 0.3 per cent to N256.00 per share from N255.31 per share.
FrieslandCampina Wamco Plc topped the activity chart last week by value with with N0.030 billion, 11 Plc recorded N0.009 billion, Central Security Clearing System (CSCS) Plc raked in N0.004 billion, IGI Plc followed with N0.002 billion, and Geo-Fluids Plc recorded N0.002 billion.
However, IGI Plc was the most traded instrument by volume with 7.5 million units, FrieslandCampina Wamco Plc transacted 0.77 million units, UBN Property Plc recorded 0.38 million, Geo-Fluids Plc traded 0.37 million units, and CSCS Plc posted 0.16 million units.
By Dipo Olowookere
To minimise their risks, investors trimmed their exposure to Nigerian stocks by about 52.07 per cent last week, data from Customs Street has revealed.
At the Nigerian Exchange (NGX) Limited in the period under review, the market participants transacted 2.252 billion shares worth N58.831 billion in 63,657 deals compared with the 4.698 billion shares valued at N85.043 billion traded in 72,562 deals a week earlier.
Business Post reports that Universal Insurance, GTCO, and AIICO Insurance dominated the activity chart in the week with 468.315 million equities sold for N9.007 billion in 3,568 deals, contributing 20.79 per cent and 15.31 per cent to the total trading volume and value, respectively
At the close of business, the financial services sector recorded a turnover of 1.371 billion stocks worth N22.274 billion in 26,114 deals, contributing 60.86 per cent and 37.86 per cent to the total trading volume and value, respectively.
The consumer goods space transacted 253.536 million shares worth N15.244 billion in 8,869 deals, and the services industry exchanged 193.424 million equities valued at N931.795 million in 4,716 deals.
In the five-day trading week, the bourse posted 33 price gainers versus 51 in the previous week, 57 price losers versus 39 a week earlier, and 62 equities remained unchanged, in contrast to 62 recorded in the preceding week.
Neimeth was the biggest price advancer in the period under consideration with a 31.42 per cent appreciation to close at N3.43, SCOA Nigeria expanded by 20.39 per cent to N2.48, Northern Nigeria Flour Mills grew by 19.54 per cent to N54.45, Livestock Feeds soared by 17.62 per cent to N5.94, and Dangote Sugar surged by 16.67 per cent to N38.50.
On the flip side, Universal Insurance slumped by 1923 per cent to 63 Kobo, Royal Exchange declined by 18.35 per cent to 89 Kobo, Regency Assurance shrank by 17.78 per cent to 74 Kobo, Sovereign Trust Insurance lost 16.67 per cent to close at N1.10, and Dangote Cement crumbled by 16.46 per cent to N400.00.
The market came under selling pressure in the week, resulting in the All-Share Index (ASI) and the market capitalisation tumbling by 2.94 per cent and 2.26 per cent each to 102,353.68 points and N62.851 trillion, respectively.
In the same vein, all other indices finished lower except the MERI Value, consumer goods, growth and sovereign bond indices, which appreciated by 0.70 per cent, 1.33 per cent, 0.15 per cent, and 0.04 per cent, respectively while the ASeM index closed flat.
By Dipo Olowookere
The three major partners of the Dangote Refinery in the Lekki area of Lagos, MRS Oil Nigeria, Heyden and Ardova Plc, will retail premium motor spirit (PMS), otherwise known as petrol, at its stations across the country at N970 per litre.
This information was revealed by Dangote Refinery, owned by one of Africa’s richest businessmen, Mr Aliko Dangote.
The three independent oil marketers entered into a bulk-purchasing agreement with the oil facility, which has the capacity to refinery about 650,000 barrels of crude oil per day.
The deal, first sealed by MRS Oil, ensured that it retailed fuel at its petrol stations at N935 per cent litre.
However, last week, Dangote Refinery increased its ex-depot price from N899.50 per litre to N950 per litre due to a rise in the price of crude oil to $80 per litre in the global market from about $72 per barrel.
In a statement on Sunday made available to Business Post, Dangote Refinery said, “All our partners, including Ardova, Heyden, and MRS Holdings, will offer petrol to Nigerians at a retail price of N970 per litre nationwide.
“We have absorbed the increased logistics costs to guarantee uniform pricing across the 36 states of the federation and the Federal Capital Territory (FCT).”
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