Economy
Nigeria’s Multiple-Forex Regime Unsustainable—BMI Research
**FX Liquidity Will Boost Investor Sentiment
By Modupe Gbadeyanka
A member of Fritch Group Company, BMI Research, has revealed that improvement in the foreign exchange (Forex) liquidity in Nigeria will boost investor sentiment, just as it warned that the current multiple-rate FX regime was unsustainable beyond the short term.
In its Country Risk Report for Nigeria released recently, which was sighted by Business Post, BMI Research said despite weak first quarter data leading it to revise down its growth forecasts in 2017, “we maintain a broadly constructive outlook on prospects for Nigeria’s economic recovery over the coming quarters,” pointing out that “increasing oil output, an improvement in FX liquidity will boost investor sentiment.”
The report noted that a robust increase in oil output will sustain Nigeria’s return to a current account surplus over the coming quarters, which will “support a gradual relaxation of capital controls imposed on the country’s external position, boding well for foreign investment into the economy.”
“Slowing inflation and sluggish economic growth will encourage the Central Bank of Nigeria to adopt a more dovish stance when setting monetary policy over the coming quarters, prompting the beginning of the cutting cycle before year-end 2017. That being said, concerns over the normalisation of monetary policy in developed markets and high levels of credit growth will temper the pace of easing,” BMI Research said.
The report further stated that Nigeria’s central bank will continue to tightly manage the Naira through 2017, as the country’s improving fundamentals indicate downside pressure on the currency is beginning to decline, warning that “the current multiple-rate FX regime is unsustainable beyond the short term, and will likely be consolidated into a single-more flexible-rate in 2018.”
It said, “In the context of growing concerns in Nigeria’s domestic media regarding the health of President Muhammadu Buhari, we take a closer look at the potential fallout should he leave office before his term ends in 2019.
“Past precedent and constitutional process means we would expect relatively little instability in the handover of power, but north-south tensions could rise to the fore in the 2019 election as a result.”
However, BMI Research said, “While we believe that the security risks Nigeria faces on a number of fronts will eventually be contained, if the situation significantly deteriorates into a more intense level of conflict, this would potentially affect investment, exports, and growth.
“Power sector reforms are crucial for long-term productivity gains. If these are slowed or stalled, this would lead to lower long-term trend growth than we currently expect.”
By Modupe Gbadeyanka
The Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON) has appealed to the Nigeria Customs Service (NCS) to deepen its sensitisation on the newly introduced Green Tax Surcharge Policy.
The chairman of APFFLON, Mr Akeem Ayobiojo, made this plea on behalf of his colleagues on Tuesday, July 14, 2026, at the Customs House in Abuja, during a stakeholders’ engagement with the agency.
He also called for improvements in the administration of Pre-Arrival Assessment Reports and Post Clearance Audit and the African Continental Free Trade Area (AfCFTA).
Mr Ayobiojo stated that freight forwarders were happy to work with the customs, commending the organisation for implementing Chapter 99, describing it as a major relief for manufacturers.
He, however, emphasised that a deeper understanding of the new tax was necessary for his members, saying more predictable procedures would reduce delays and unexpected costs for importers and freight forwarders.
In his remarks, the Comptroller-General of Customs, Mr Adewale Adeniyi, assured manufacturers, freight forwarders and other players in the nation’s trade sector that the NCS would continue to engage them on fiscal policies affecting their businesses, saying sustained dialogue remains key to resolving implementation challenges and improving the country’s trading environment.
He also promised them the service’s resolve to enhance and facilitate trade, acknowledging that, “Your feedback is important because it helps us understand what is happening in the field, and where necessary, we will take your concerns to the Federal Ministry of Finance and other relevant government institutions.”
Speaking about Authorised Economic Operator (AEO), Mr Adeniyi further explained that Nigeria would not lower the standards required under the Authorised Economic Operator Programme as the initiative is guided by global benchmarks established by the World Customs Organisation (WCO).
On her part, the Deputy Comptroller-General of Customs for Tariff and Trade, Ms Caroline Niagwan, clarified that electric vehicles can be imported without payment of duty only by holders of Import Duty Exemption Certificate (IDEC) issued by the Federal Ministry of Finance.
She also urged importers facing classification disputes to take advantage of the Advance Ruling system, noting, “Once an Advance Ruling is issued based on genuine documentation, importers have certainty on classification, valuation or origin before the goods arrive, thereby reducing unnecessary disputes during clearance.”
By Adedapo Adesanya
The Naira appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 17, by N1.35 or 0.07 per cent to N1,380.18/$1 from N1,381.53/$1.
It also improved its value against the Pound Sterling in the same market segment during the session by N11.75 to trade at N1,854.42/£1 compared with the previous day’s N1,866.17/£1, and gained N5.69 against the Euro to sell at N1,576.99/€1 versus Thursday’s closing price of N1,582.68/€1.
In the same vein, the Naira chalked up N1 against the United States currency yesterday at the GTBank forex desk to quote at N1,388/$1, in contrast to the preceding day’s N1,389/$1, but closed flat at the black market at N1,405/$1.
The appreciation of the Nigerian currency on Friday came amid fresh signals that Nigeria is building its external reserves for protection against shocks and excessive currency volatility.
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, said the country’s gross reserves had risen above approximately $52 billion by 15 July, while net reserves had increased from about $3 billion when the current CBN leadership took office to more than $40 billion.
Mr Cardoso linked the increase in reserves to reforms that had restored greater confidence in the foreign exchange system. He also pointed to efforts to diversify foreign currency inflows, including policies designed to increase remittances through official channels.
He noted that monthly diaspora remittances had risen above $600 million and the CBN expected them to reach approximately $1 billion by the end of 2026. The target is part of a broader effort to grow reserves through recurring inflows rather than temporary measures.
The improvement, he argued, had strengthened Nigeria’s capacity to respond when unexpected events threatened market stability.
The apex bank has also launched a new digital platform that will track every foreign exchange transaction involving Bureau De Change (BDC) operators, marking a major step in its efforts to improve transparency and strengthen oversight of Nigeria’s retail forex market.
As for the crypto market, prices were up as markets overlooked geopolitical developments and macro forces weighing on the whole market ecosystem rather than anything crypto-specific, with Cardano (ADA) up by 4.6 per cent to $0.1661.
Bitcoin (BTC) jumped by 1.8 per cent to $63,968.32, Ethereum (ETH) improved by 0.9 per cent to $1,843.88, Dogecoin (DOGE) also rose by 0.9 per cent to $0.0723, Solana (SOL) soared by 0.6 per cent to $74.90, Ripple (XRP) also appreciated by 0.6 per cent to $1.08, and Binance Coin (BNB) advanced by 0.1 per cent to $567.32.
However, TRON (TRX) depreciated by 0.2 per cent to close at $0.3218, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The prices of the crude oil grades rose Friday, as fighting between the US and Iran continued in the Middle East, leading to further attacks in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria.
Brent crude futures advanced by about 4.6 per cent to $88.10 per barrel, while the US West Texas Intermediate (WTI) futures gained about 4.5 per cent to settle at $82.49 per barrel.
US forces stepped up attacks on Iranian sites, reportedly striking key bridges, railways, and an airport, prompting retaliatory action by Iran.
US Central Command said that it had completed its sixth consecutive night of strikes against Iran, hitting dozens of military targets such as military logistics infrastructure and maritime capabilities.
Centcom said more than 50,000 service members were operating across the Middle East, adding that they “remain vigilant, lethal, and ready.”
Iran said it attacked the US targets in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria in retaliation for the latest round of strikes by the Americans.
Kuwait said Iran attacked a power and water desalination plant as fighting escalated in the Persian Gulf, saying that the attack damaged the facility that sparked a fire that affected a large number of its electricity-generating units, according to The Kuwait Times.
Kuwait is heavily dependent on desalination plants for potable water. Analysts have long feared that Iran would strike infrastructure that is critical to supporting civilian life in the Middle East.
A tanker was hit by a projectile off the coast of Oman, causing minor damage, the United Kingdom Maritime Trade Operations Centre said in an incident report Friday. Iran has repeatedly attacked tankers over the past week as it tries to force civilian ships to transit the Strait of Hormuz through its waters.
The escalating fighting comes as the fragile truce reached last month has collapsed, once again disrupting energy flows through the strategically vital Strait of Hormuz, which typically handles around 20% of the world’s oil traffic.
Earlier in the week, President Donald Trump said American forces would target Iran’s infrastructure next week unless the two sides reached a diplomatic breakthrough.
Iran has asked Yemen’s Houthis to close the Red Sea oil route if the US targets Iranian power infrastructure.
Market analysts noted that Iran and the US still have strong economic incentives to avoid a complete breakdown in talks, with the US seeking lower oil prices ahead of the November midterm elections and Iran reluctant to forgo economic incentives.
