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Naira depreciation: Analysts offer strategies for volatility mitigation

Published

2 years ago

February 22, 2024

Naira Appreciates To N1,372/$ At Official FX Market

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.

Chiazor suggested that authorities might need to reassess their stance on foreign exchange management, potentially reverting to a more tightly managed floating exchange rate system.  

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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Professor Uche Uwaleke, Nigerian First Professor of Capital Market and the Director of the Institute of Capital Market Studies at the Nasarawa State University Keffi who voiced concerns regarding the current state of the exchange rate, in an exclusive chat with Nairametrics suggested that presidential intervention is necessary. 

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

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Carloha Rides High, Plans New EV for Nigeria After Winning Global Honours

Published

11 hours ago

May 30, 2026

Trends Admin

Carloha Rides High, Plans New EV for Nigeria After Winning Global Honours

Carloha Nigeria, the authorised dealer of Chery vehicles in Nigeria, is strengthening its position in the country’s automotive industry after clinching two prestigious global awards as it unveils plans to introduce another electric vehicle (EV) into the market.

iCAUR (iCAR) is a global youth-oriented electric vehicle brand under the Chery Group, which was developed in partnership with SmartMi Tech. The brand is focused on stylish designs and smart mobility and it is currently expanding across international markets.

Carloha Nigeria received the New Star Award and Brand Leap Contribution Award at the 2026 Chery Global Summit and Beijing International Automotive Exhibition in China. This is in recognition of its rapid market growth, brand development efforts and customer engagement initiatives.

The international recognition comes as Carloha intensifies its push into Nigeria’s growing EV space, buoyed by the positive reception of the iCAUR brand among motorists, technology enthusiasts and environmentally conscious consumers.

Managing Director, Sola Adigun, said the awards validate the company’s commitment to delivering world-class automotive solutions, while the growing acceptance of iCAUR reflects increasing consumer interest in innovative and sustainable mobility options.

“The Nigerian automotive market is evolving, and consumers are becoming increasingly receptive to innovation, sustainability and smart mobility solutions.

“The success of iCAUR has encouraged us to continue investing in the future of electric mobility in Nigeria,” he said.

Adigun disclosed that plans for the launch of a new EV are at an advanced stage, describing the move as part of a broader strategy to expand consumer choice and support Nigeria’s transition to cleaner transportation.

He added, “Winning these awards on the global stage is a strong endorsement of the work our team has done in building the Chery brand in Nigeria.

“It also demonstrates that Nigerian automotive businesses can compete successfully with the best across the world.”

According to him, Nigerian customers are increasingly demanding vehicles that combine intelligent safety technologies, premium comfort, fuel efficiency and modern design, noting that these qualities were prominently showcased by Chery at the Beijing exhibition.

“Beyond selling vehicles, our goal is to provide mobility solutions that meet the evolving needs of Nigerian families and businesses while aligning with global trends in sustainability, innovation and customer experience,” Adigun said.

At Auto China 2026, Chery also showcased its latest safety and intelligent mobility technologies, including the all-new TIGGO V and its AiMOGA robotics innovations, under its new global brand philosophy, “For Family.”
General Manager, Felix Mahan, said the awards underscore Carloha Nigeria’s commitment to excellence and customer satisfaction, adding that the company’s CarlohaCare 6-6-7 package continues to offer customers industry-leading aftersales support through a six-year warranty, six years of free service and a seven-day repair promise.
“This recognition reflects growing international confidence in both the Nigerian market and our ability to deliver world-class customer experience. We remain committed to making vehicle ownership easier, more affordable and more rewarding for our customers,” Mahan said.
With fresh global recognition and an expanded EV strategy, Carloha is positioning itself as one of the key players driving the future of sustainable mobility in Nigeria.

Business

BREAKING: Dangote Refinery Announces New Petrol, Diesel Prices

Published

15 hours ago

May 30, 2026

Trends Admin

BREAKING: Dangote Refinery Announces New Petrol, Diesel Prices

LAGOS, NIGERIA – The Dangote Petroleum Refinery and Petrochemicals has announced fresh reductions in the prices of Premium Motor Spirit (PMS), commonly known as petrol, and Automotive Gas Oil (AGO), also known as diesel, in a move that is expected to reshape pricing dynamics across Nigeria’s downstream petroleum sector . Information made available to the Nigerian Tribune on Saturday by a source familiar with the development showed that the refinery has lowered the gantry price of petrol by N25 per litre, bringing it down from N1,275 to N1,250 per litre . A senior Dangote Group official, who spoke on condition of anonymity, confirmed the development and attributed the price adjustment to the recent decline in global crude oil prices. “We have reduced the petrol price to N1,250 at our gantry. This has to do with the current reduction in global oil prices, though everything is still volatile and requires caution,” the official said .

The reduction comes as depot prices were already responding to shifting supply dynamics. Market checks by Petroleumprice.ng showed that Aiteo and NIPCO were selling petrol at N1,272 per litre, while Integrated Energy, Ascon, and African Terminal were trading around N1,274 per litre, all below Dangote Refinery’s previous gantry price of N1,275 per litre . The latest price reduction comes about three weeks after reports emerged that Dangote Refinery had increased the ex-gantry price of petrol. At the time, a credible inside source disclosed that petrol continued to sell at N1,275 per litre at the refinery, hours after reports claimed that the company had raised its petrol price by N75 amid fluctuations in global crude oil prices .

The refinery has also reduced the price of Automotive Gas Oil (diesel) by N100 per litre, setting the ex-depot price at N1,700 per litre, down from the previous N1,800 per litre, according to a refinery communique sighted by petroleumprice.ng effective May 27, 2026 . However, this followed a brief reduction attempt on May 26 when the refinery had adjusted diesel prices by N200 to N1,600 per litre but retracted the announcement later the same day . Industry operators said the reversal was aimed at preventing losses among marketers and ensuring a fair adjustment across the supply chain.

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Confirming the diesel price development, the National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) , Mr. Joseph Obele, said the reduction followed the arrival of imported petroleum cargoes into the country. “Dangote Refinery recently instituted legal action after the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) approved import licences for some marketers to bring petroleum products into the country,” Obele said . “Over the weekend, some of the vessels carrying imported products reportedly arrived, and shortly after, the refinery reduced the gantry price of diesel from N1,800 to N1,600 per litre” . He described the development as a direct result of market rivalry: “All hail competition and say no to monopoly in the petroleum industry. The more the competition, the better prices consumers will enjoy” .

The development comes amid an ongoing dispute over the issuance and renewal of import licences by the NMDPRA to marketers and the Nigerian National Petroleum Company Limited (NNPCL). Industry observers say the timing of the diesel price cut is significant, as the new selling price from Dangote Refinery competes directly with imported products . Industry analysts said the diesel price cut could ease transportation and logistics costs if sustained, especially for manufacturers and businesses heavily dependent on diesel-powered operations .

Falling crude oil prices have strengthened market expectations of lower refined product prices. Brent crude, the international oil benchmark, has declined amid reports that the United States and Iran were close to reaching a ceasefire agreement . The easing of tensions between the two countries immediately impacted the oil market, with traders reacting positively to expectations of improved crude supply and reduced geopolitical risks in the Middle East . Despite the reductions at the refinery gate, checks indicate that retail prices have remained largely unchanged in many parts of the country, with several filling stations still dispensing petrol at prices above N1,350 per litre . Industry observers say the gap between ex-depot and retail prices may persist for some time as marketers work through existing stock purchased at higher rates before implementing any fresh pricing changes . The latest cuts come as competition continues to grow within Nigeria’s downstream petroleum sector following the removal of fuel subsidies and the full deregulation of the market.

BREAKING: Dangote Refinery Announces New Petrol, Diesel Prices

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FG Deepens CNG Expansion with 1,100-Vehicle Capacity Gas Station in Abuja

Published

21 hours ago

May 30, 2026

Trends Admin

FG Deepens CNG Expansion with 1,100-Vehicle Capacity Gas Station in Abuja

The Federal Government has intensified efforts to deepen the adoption of Compressed Natural Gas (CNG) in Nigeria with the commissioning of a high-capacity refuelling station in Abuja capable of serving more than 1,100 vehicles daily.

The newly inaugurated facility, developed by Rolling Energy Limited in partnership with the Midstream and Downstream Gas Infrastructure Fund (MDGIF), is located in Jahi, Abuja, and is expected to significantly boost access to cleaner and more affordable transportation energy.

The project forms part of the Federal Government’s broader strategy to expand Nigeria’s gas infrastructure, reduce reliance on petrol and diesel, and accelerate the transition to cleaner fuel alternatives under the Presidential Initiative on Compressed Natural Gas (Pi-CNG).

The High Capacity CNG Daughter Booster Station has a sales capacity of 1,000 Standard Cubic Metres (SCM) per hour, supported by two CNG tube skids with a combined storage capacity of 17,000 SCM.

The station also features a Mass Conversion Centre staffed by trained technicians and equipped with conversion kits capable of converting up to 20 vehicles and 25 tricycles daily, providing practical support for motorists and commercial operators seeking to switch to gas-powered transportation.

Speaking during the commissioning ceremony on Friday, the Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, described the project as a major milestone in Nigeria’s drive to deepen gas utilisation and strengthen access to affordable energy solutions.

Ekpo said the facility would play a strategic role in supporting the nationwide rollout of CNG adoption, particularly as the government continues efforts to cushion the impact of rising fuel costs following the removal of petrol subsidy.

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He said, “Facilities such as this are essential for building the backbone infrastructure required to support widespread CNG penetration in Nigeria.”

The minister commended Rolling Energy Limited and MDGIF for delivering the project, describing it as one of four strategic gas infrastructure projects currently being commissioned across the country.

According to him, similar projects by Ibile Oil and Gas, Portland Energy and Femadec are also being commissioned in Lagos and Owerri, signalling increased private sector confidence in the Federal Government’s gas commercialisation agenda.

Ekpo said the projects align with the Federal Government’s Decade of Gas Initiative, launched to leverage Nigeria’s estimated 215 trillion cubic feet of proven gas reserves to drive industrialisation, transportation reform, economic diversification and long-term energy security.

The minister noted that expanding gas infrastructure remains central to President Bola Tinubu’s energy transition agenda, which aims to provide Nigerians with cleaner, cheaper and more sustainable alternatives to conventional fuels.

Stakeholders in the energy sector have welcomed the development, noting that improved CNG station availability is crucial to encouraging wider adoption among private motorists, commercial transport operators and industrial users.

Analysts also say the establishment of more conversion centres and refuelling stations will help address one of the biggest barriers to mass CNG adoption — inadequate infrastructure.

The Federal Government has reiterated its commitment to supporting private-sector-led investments to ensure that CNG refuelling stations become accessible across major cities and transport corridors nationwide.