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Naira unification may lead to losses for black market speculators   

Naira unification around NAFEX could burn the fingers of speculators.  



Naira unification may lead to losses for black market speculators   

Nigeria’s currency black market operators seem to be running out of time following the latest confirmation by the CBN Governor, Godwin Emefiele that plans to unify the Naira around the NAFEX rate was underway. The Governor said this at an Investors Conference organized by CitiBank. 

Nairametrics reported on Tuesday that the CBN Governor confirmed the unification plans stating that if it is to be done, it will be around the NAFEX rate and not the black-market rate. The Governor also used the opportunity to take a swipe at black market speculators, describing those who purchase forex in that market as dealing in illegal activities.  

According to him, the rates they are buying the dollar from the black market are unrealistic. He said: “The CBN has always maintained that the black market is not a good determinant of the value of the naira. 

“You’ll find that people who are in a hurry and do not want to procure the kind of documentation required, will sometimes rush to those markets.

“But we have used the period of this pandemic to prove that anybody dealing in that market is dealing in an illegal business.”  

A Foreign Exchange dealer at Nigeria’s biggest bank by assets told Nairametrics exclusively that the unification of the Naira’s exchange rates has already begun. He said;  

“The unification has already commenced with the rate at which CBN sells funds for SME and payment for School fees, travelling allowance and medical payment is within the IEFX levels.  

“As stated by the CBN Governor, the speculators in the Black market will lose money as soon as CBN begins selling to the BDCs and international flights starts. There’s also a need for the CBN to clamp down on speculators and round trippers in the market to stabilize rate which should not be more than c.$/N400”  


Emefiele, strengthened his cause of eradicating other currency exchange systems, while speaking at the conference, saying that the various exchange rates will be unified around the I&E window (NAFEX) exchange rate.   

“We will continue to pursue unification around the NAFEX Market”, Emefiele said, noting that as at the end of 2019, Nigeria experienced a “relatively stable market because the NAFEX rate and rate that the Central Bank does transaction outside the NAFEX was close to themselves. At some point, the NAFEX rate may be below the Central Bank rate”  

Victor Silasan Investment Analyst at a leading Nigerian financial institution explained to Nairametrics recently via phone chat that the recent drawdowns, being experienced at the black market will soon be a thing of the past. He said;  

“With the drawdown in the FX reserves, the odds are against the naira. As the economy reopens and the resumption of dollars sells to BDCs and attempts to meet piling FX demands, we might start to see pressures on the currency.”  

This move in unifying the exchange rate system is also expected that the present converging the rates estimated at N387 to $1 (I &E Window) will boost revenues for the Federal government which could see a gain of N20 on every US dollar earning in oil.  

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Whilst the debate rages on about what the true value of the naira is, several factors are at play. The CBN Governor had alluded to the fact that the lull in business activities suggest forex demand should be low thus calling into question the pent-up demand being highlighted by several market analysts. According to him this suggests the black-market rate being reported are likely no representative of what the real demand is but rather driven by speculative forces.  

Conversely, market analysts believe the reluctance of the CBN to fund liquidity shortages at the I&E window is the reason why the black market has depreciated to about N460/$1. They claim legitimate transactions have already taken place in the parallel market especially for businesses who have obligations to meet but cannot access forex from official windows. 

CBN Governor, in his statement on Tuesday promised foreign investors and businesses with legitimate need to repatriate forex to “be patient” just like they were in 2016 and that the CBN will need all their legitimate demands. 

Despite all the back and forth, it is likely that there might be some people who will suffer from any official moves by the CBN. Unification around the NAFEX rate of about N388 is effectively a devaluation from N360/$1. However, if the CBN supports this move with liquidity that matches demand from a reviving economy, then surely the days of the black market may just be numbered.  

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In 2017 when the CBN launched the NAFES/I&E window, the exchange rate at the black market fell from over N500 to about N366/$1 achieving parity with the rates at the I&E window and the BDC rate.  

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 The naira was trading at N459 to $1 at the black market on Thursday, according to data obtained from Everdon BDC from previous session of N455 to $1, recorded on Wednesday, a differential of N4.  


Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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CBN assures exporters of unhindered access to their dollar earnings

The CBN has given assurances to exporters that they will continue to have unfettered access to their export proceeds.



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The Central Bank of Nigeria (CBN) has given assurances to exporters that they will continue to have unfettered access to their export proceeds.

This is believed to be part of the monetary control measure by the apex bank to ensure more dollar inflow and maintain forex liquidity.

This disclosure was made by the Governor of CBN, Mr Godwin Emefiele, during a virtual presentation at Zenith Bank’s 2021 Export Seminar, on Thursday, April 20, 2021.

Emefiele, however, in his statement, urged the exporters to reciprocate the good gestures of the central bank by repatriating their funds back to the country.

He said that supporting greater trade within Africa and the global community is vital to the CBN’s objectives of enabling greater economic growth and creating employment opportunities for the country’s growing population.

Emefiele said there is a strong push for the diversification of the Nigerian economy as the coronavirus outbreak has impacted negatively on global oil prices in 2020, which led to a huge drop in the country’s foreign exchange earnings and government revenue.

The CBN boss was optimistic that the African Continental Free Trade Agreement (AFCFTA) will provide opportunities for the Nigerian private sector to expand into new markets and seek new export opportunities, particularly in the area of manufacturing, ICT, agriculture and financial services.

He stated that the full implementation of AFCFTA would give Nigerian firms preferential access to markets in Africa with a value of about $504.17 billion in goods and $162 billion in services.

What you should know

It can be recalled that the CBN had introduced several measures to encourage the inflow of forex into the country following the sharp drop in oil revenue.

Some of those measures include the Naira 4 Dollar Scheme, an initiative aimed at giving incentives to senders and recipients of international money transfer in order to attract more diaspora remittances through official channels

The CBN had in January 2021, announced that all Nigerian exporters who are yet to repatriate their export proceeds, will be barred from banking services effective from January 31, 2021.

Why this matters

The CBN believes that repatriating these export proceeds via the NAFEX (Investor and Exporter) window will improve liquidity in the official market and perhaps strengthen the naira at the black market.

Most of the exporters sell their forex to the parallel market where it can be exchanged for higher naira value-boosting their gains on foreign currency conversions.

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However, it is yet to be seen if exporters will comply with this directive or seek other means of avoiding the hammer on them. Most exporters already find a way to avoid these hammers by opening foreign bank accounts where most of the export proceeds are warehoused and then sold at the black market.

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CBN to sanction banks, BDCs for rejecting old, smaller denomination of US dollars

The CBN cautioned forex dealers to desist from defacing or stamping dollar banknotes as such notes always failed authentication tests during sorting.



The Central Bank of Nigeria (CBN) has ordered Deposit Money Banks (DMBs) and Bureau De Change (BDC) operators to, henceforth, accept from their customers, old and lower denomination of US dollars as legal tender or face sanctions.

This follows numerous complaints from members of the public on the rejection of old/lower denominations of the dollar by these banks and other authorised forex dealers.

The CBN directive is contained in a circular signed by its Director for Currency Operations Department, Mr Ahmed Umar.

Umar, in his statement, said that the apex bank had been faced with complaints of the rejection of old/lower denomination US dollar deposits in the banks, adding that the CBN would sanction any of the banks or forex dealers, who failed to accept such denominations from their customers.

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What the CBN’s Director of Currency Operations is saying

Ahmed said, “The CBN has, in recent times, been inundated with complaints from members of the public on the rejection of old/lower denominations of the US dollar bills by DMBs and other authorised forex dealers. All DMBs and authorised forex dealers should, henceforth, accept both old series and lower denominations of USD that are legal tender for deposit by their customers.

READ: CBN raises alarm over fake tweet posts on N50 billion COVID-19 fund

“The CBN will not hesitate to sanction any DMB or other authorised forex dealers who refused to accept old series or lower denominations of the USD bills from their customers,” he warned.

He also cautioned forex dealers to desist from the habit of defacing or stamping dollar banknotes as such notes always failed authentication tests during sorting.

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