Business
Naira depreciation: Analysts offer strategies for volatility mitigation
Naira depreciation: Analysts offer strategies for volatility mitigation
Financial analysts are advocating for a re-evaluation of policies to safeguard the Nigerian Naira amid escalating forex rates, despite efforts by the Central Bank of Nigeria (CBN) to stabilize its value.
The recent decline in the Naira’s value across official and parallel markets has prompted suggestions from financial experts to mitigate currency volatility and prevent further depreciation.
The CBN had announced a series of measures aimed at enhancing transparency and stability in the foreign exchange market while addressing malpractices.
However, while the analysts acknowledge the positive aspects of the CBN’s recent policies aimed at managing pressures in the foreign exchange market, they highlight that these measures fail to directly address the fundamental issue of limited supply.
Analysts interviewed by Nairametrics in response to the Naira’s sharp decline following exchange rate harmonization propose reassessing the government’s foreign exchange management strategy.
They advocate for shifting towards a managed float system to allow flexibility in implementing initiatives to bolster foreign exchange reserves, such as boosting oil production, enhancing agricultural exports, and incentivizing foreign remittances.
Recent Performance of Naira
Nairametrics reported that the foreign exchange turnover saw a significant rise of 76.61% to $117.32 million, coinciding with the Nigerian naira’s strengthening against the dollar in the official market on Tuesday, February 20th, 2024.
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However, despite this improvement, the intra-day high remained elevated, reaching N1,701 against the dollar by the close of trading.
- The exchange rate settled at N1,551.24 to a dollar at the end of the business day.
- In contrast, the exchange rate experienced a decline in the black market, slipping to N1,700/$1, representing a 2.65% decrease compared to the previous day’s rate.
- The Great British Pound (GBP) closed at £1/N2120, a decline from £1/N2,040 recorded the previous day, this marks a notable decrease of 3.77% compared to the N2,040 rate recorded the previous day.
- In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,802.44/$1.
What market experts are saying:
Financial analyst at FSL Securities Limited in an exclusive interview with Nairametrics, expressed concerns regarding the recent liberalization of the foreign exchange market by the Central Bank of Nigeria (CBN).
Mr. Victor Chiazor, Head of Research and Investment, FSL Securities Limited he believe that the CBN were hasty in their decision to liberalise the foreign exchange market.
Chiazor noted that the CBN’s approach lacked comprehensive consideration of the market’s dynamics, particularly in light of the persistent low supply.
He highlighted that while recent policies implemented by the CBN aimed to alleviate pressures in the FX market, they failed to effectively address underlying supply constraints.
This approach, he explained, would afford policymakers the opportunity to concentrate on enhancing supply-side factors affecting FX, including increasing oil production, bolstering agricultural export revenues, and fostering foreign remittances.
He emphasized the necessity for substantial and consistent inflows of FX, along with continuous augmentation of foreign reserves, for the sustainability of a free-floating Naira exchange rate.
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He highlighted that the increasing FAAC (Federal Account Allocation Committee) receipts are partially accountable for this situation.
To address this issue, he recommends that the President convene an emergency meeting of the Council of States to collaborate with governors on strategizing how to manage excess FAAC receipts resulting from the devaluation of the naira.
Uwaleke emphasized the importance of legislative action in this regard, advocating for the Executive to propose a Bill for a “By-Nigerian Law” and commit to enforcing its provisions.
He highlighted a potential solution to mitigate the distortionary effects of FAAC receipts on the economy, suggesting the adoption of a separate fixed exchange rate, perhaps at N800/dollar as proposed in the 2024 budget, specifically for the monetization of crude oil sales.
- “This approach would essentially establish a dual exchange rate system, with the designated rate also applicable to external debt service.
- Meanwhile, all other transactions would continue to utilize the NAFEM rates,” he said.
Uwaleke noted that he has consistently opposed the idea of floating the naira due to the fundamental weaknesses within the economy that cannot adequately support such a move.
He pointed out that crude oil sales continue to play a significant role in generating foreign exchange receipts.
Regarding the current situation, he acknowledged that the sudden unification of exchange rates, along with the subsequent devaluation of the naira and rising inflation, has made an increase in the Monetary Policy Rate (MPR) unavoidable.
However, he suggested that the Monetary Policy Committee (MPC) should opt for an incremental approach rather than implementing drastic measures.
Also, in an interview with Nairametrics, Mr. David Adonri, Executive Vice Chairman of Hicap Securities Limited, attributed the current volatility and depreciation of the currency to a significant supply-demand imbalance.
Adonri emphasized that bridging the supply gap hinges on increasing crude oil exports to meet OPEC quotas and cater to domestic refinery demands.
Additionally, he underscored the importance of diversifying activities that contribute to foreign currency supply and boosting domestic production to reduce reliance on imports.
Adonri cautioned against the overuse of monetary policy tools, noting their diminishing effectiveness in curbing demand pressures for foreign currency.
Instead, he advocated for the establishment of a transparent, credible, and market-driven foreign exchange market by the monetary authority.
Adonri criticized the current forex market for its inability to achieve exchange rate convergence or eliminate illicit transactions.
The Chief Executive Officer, of Wyoming Capital and Partners, Mr. Tajudeen Olayinka said that the CBN should understand that the black market they are chasing is a different market for different customers.
Olayinka noted that it would be difficult to unify the two different markets without eliminating the differences in the two markets.
- “Black market is a free fund market or market that is free from documentation. Unless you can create a convergence from those differences, you cannot truly unify the exchange rate in the real sense of it,” he said.
Naira depreciation: Analysts offer strategies for volatility mitigation
Entertainment
NRC, Entertainers Finalise Plans for 2026 Valentine Train Ride
NRC, Entertainers Finalise Plans for 2026 Valentine Train Ride
A team of leading Nigerian artistes and entertainment executives has paid a courtesy visit to the Managing Director of the Nigerian Railway Corporation (NRC), Kayode Opeifa, ahead of the 2026 Valentine Love Train experience.
The delegation included celebrated musician Sunny Neji, Managing Director of Ojez Entertainment Limited, Joseph Odobeatu, and veteran vocalist Yinka Davies.
The high-profile visit formed part of final preparations for the Valentine-themed train ride scheduled for Saturday, February 14, 2026, at the Mobolaji Johnson Train Station.
Dr. Opeifa received the artistes and commended the creative industry for choosing the national rail system as the venue for the annual Valentine event. He noted that the partnership reflects growing public confidence in the corporation’s safety standards, operational improvements, and renewed focus on customer experience.
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“The 2026 edition aims to deliver an unforgettable experience while deepening public engagement with the rail service,” Opeifa said, reaffirming the NRC’s commitment to providing secure and efficient transport for passengers during special events.
Organisers disclosed that this year’s edition will feature an expanded entertainment lineup, including performances and appearances by Charles Inojie, Yinka Davies, Sunny Neji, and Segun Arinze. Guests are expected to enjoy live music, comedy, a couple’s game show, fashion showcases, and special performances throughout the Lagos–Ibadan–Lagos train ride, culminating in a Valentine banquet ball.
The Valentine Love Train has in recent years become a fixture on the NRC’s festive calendar, attracting couples, families, and leisure seekers with its blend of travel, romance, and entertainment. The initiative also aligns with ongoing efforts by the corporation to promote rail transportation as a viable and enjoyable alternative for intercity travel.
With final logistics being fine-tuned, organisers say the 2026 edition promises to combine safety, comfort, and premium entertainment for participants.
NRC, Entertainers Finalise Plans for 2026 Valentine Train Ride
Auto
Lagos Motor Fair, Autoparts Expo to begin March 17, targeting Investment, Industry Growth
Lagos Motor Fair, Autoparts Expo to begin March 17, targeting Investment, Industry Growth
The 20th edition of the Lagos International Motor Fair and the 13th Africa Autoparts Expo is set to spotlight investment, technology transfer and industry collaboration as organisers intensify efforts to position Nigeria as a major automotive hub in West Africa.
The three-day event, which will also incorporate the Africa Motorcycle and Tricycle Expo, is scheduled to hold from March 17 to 19, 2026, at the Federal Palace Hotel in Lagos.
Organisers said the upcoming edition would focus strongly on accelerating the development of the country’s automotive sector by creating platforms that connect global manufacturers with local industry players.
“Nigeria has all it takes to become a global automotive industry giant,” the organisers stated, noting that the fair remains a strategic contribution toward driving growth despite prevailing industry challenges.
Chairman of the Organising Committee, Ifeanyichukwu Agwu, said the exhibitions had over the years evolved into a key platform for attracting investment into automobile spare parts and accessories manufacturing while strengthening aftermarket activities across the region.
“We have consistently used these events to attract investment into auto components manufacturing and to showcase the enormous capacity and potential of this critical sector of the economy,” he said.
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Agwu, who also serves as Managing Director of BKG Exhibitions Limited, disclosed that the 2026 edition would place emphasis on business-to-business engagement between original equipment manufacturers (OEMs) and auto parts dealers from Nigeria and neighbouring countries.
According to him, the goal is to foster partnerships capable of leading to the establishment of component manufacturing plants locally.
He added that the exhibition is expected to support government policies aimed at building a sustainable automotive industry by stimulating the emergence of companies involved in component production.
Calling for policy adjustments, Agwu urged the Federal Government to prioritise spare parts and components manufacturing over vehicle assembly, arguing that deeper technology transfer and innovation occur within the components segment.
“Spare parts manufacturing is where real technology transfer occurs. It involves precision engineering, planning and innovation—far beyond the coupling processes involved in assembly,” he said, while also advocating a review of the existing automotive policy to better support local production.
Despite the challenges associated with hosting large-scale industry events, Agwu reaffirmed the organisers’ commitment to sustaining the platform, warning that neglecting the automotive sector could have far-reaching consequences for the economy and employment.
The organisers said more than 100 original components manufacturers from countries including China, India, South Korea, South Africa, Singapore and Turkey, alongside major automobile distribution and manufacturing companies operating in Nigeria, are expected to participate.
In addition to product exhibitions, the event will feature seminars and technical workshops focusing on policy, investment opportunities, technology transfer and industry best practices, with each day structured to deliver value to exhibitors, investors, policymakers and other stakeholders.
Lagos Motor Fair, Autoparts Expo to begin March 17, targeting Investment, Industry Growth
Business
Naira Could Trade Below ₦1,000/$ With Dangote Refinery at Full Capacity — Otedola
Naira Could Trade Below ₦1,000/$ With Dangote Refinery at Full Capacity — Otedola
Billionaire businessman Femi Otedola has projected that the naira could strengthen to trade below ₦1,000 per US dollar as the Dangote Petroleum Refinery achieves full operational capacity. The prediction comes as Nigeria anticipates a major boost in domestic fuel production, potentially reducing import dependence and easing pressure on the foreign exchange market.
Otedola made the projection in a post on X, congratulating Aliko Dangote on the refinery reaching its designed processing capacity of 650,000 barrels per day (bpd). He described the milestone as a historic moment for Nigeria’s energy sector, saying it could positively impact the naira exchange rate, foreign reserves, and overall economic stability.
According to Otedola, the refinery’s capacity to produce up to 75 million litres of Premium Motor Spirit (PMS) daily positions Nigeria to meet domestic fuel demand and even generate surplus for export. He highlighted that this would reduce the country’s reliance on imported petroleum products, which historically exerted heavy pressure on the naira and foreign exchange resources.
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“With domestic refining now firmly underway after decades of reliance on imports, pressure on the foreign exchange market should ease significantly, potentially pushing the naira below ₦1,000/$ before year-end,” Otedola said. He also noted that the EFCC and monetary authorities’ support in maintaining a conducive economic environment would complement these gains.
The Dangote Refinery, located in the Lekki Free Zone, Lagos, is Africa’s largest single-train refinery. Experts say that reaching full production will conserve billions of dollars previously spent on importing refined petroleum products and strengthen Nigeria’s foreign exchange reserves. Plans are also underway to expand refining capacity to 1.4 million bpd, with increased production of petrochemicals like polypropylene and linear alkyl benzene, further reducing industrial import dependence.
Economic analysts have welcomed the refinery’s milestone but caution that naira stability will still depend on broader macroeconomic reforms, oil prices, foreign capital inflows, and Central Bank of Nigeria (CBN) policies. Nevertheless, Otedola’s projection reflects renewed optimism that domestic refining capacity could be a turning point for the Nigerian economy, energy security, and the foreign exchange market.
Naira Could Trade Below ₦1,000/$ With Dangote Refinery at Full Capacity — Otedola
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