Nigeria’s ongoing foreign exchange reforms are beginning to restore predictability to the economy, a development the Chairman of Coronation Merchant Bank, Babatunde Folawiyo, says is critical for long-term growth and business planning.
Folawiyo made this known during a media engagement to mark the merchant bank’s 10th anniversary, where he assessed the impact of recent FX and macroeconomic reforms.
He noted that while the adjustment phase has been painful for businesses and consumers, a stable and predictable policy environment, even at higher exchange rates, is far more constructive than prolonged volatility.
Folawiyo said the current policy direction of the Central Bank of Nigeria and the Federal Government aligns with sound economic principles and is already beginning to yield positive outcomes.
According to him, businesses are increasingly positioning themselves to benefit from reform-led growth across key sectors such as infrastructure, oil and gas, manufacturing, construction, and real estate.
What Coronation Merchant Bank is saying
The Coronation Merchant Bank chairman said stability is the most critical ingredient for economic progress and effective business decision-making.
He stressed that uncertainty and sharp swings in policy or exchange rates do more damage to the economy than difficult but consistent reforms.
- “No business thrives without some level of stability. What hurts the economy most is wild and sudden swings. Predictability allows businesses to plan, adjust and grow.”
- “These are no mere textbook reforms. There is no gain without pain, and we are already beginning to see the gains, not just in the financial sector but across the broader economy.”
- “A corporate client structuring commercial papers or complex funding solutions needs more than a fintech app. It needs a bespoke, one-stop financial partner.”
He added that Nigeria’s largely underbanked economy presents significant opportunities for specialised financial institutions, particularly merchant banks with expertise in structured and corporate finance.
More insights
Beyond macroeconomic reforms, Coronation Merchant Bank believes its strategic positioning over the past decade places it in a strong position to benefit from improving policy clarity.
The bank’s management said it has deliberately focused on defined markets and advisory strengths despite operating through years of economic instability.
- “Over the last 10 years, we have found our own space in a very tight market and built credible footprints in the specific markets we chose to serve,” said Managing Director and Chief Executive Officer, Paul Abiagam.
Looking ahead, both the board and management expressed confidence that a more predictable policy environment, combined with disciplined execution and sector expertise, will enable the bank to deepen its domestic impact and expand its relevance across Africa.
Why it matters
The growing emphasis on FX predictability signals a broader shift in Nigeria’s financial system from short-term survival to strategic expansion.
- As reforms reduce uncertainty and capital is repriced more transparently, financial institutions with strong structuring, advisory, and risk-management capabilities are better positioned to support large-scale projects.
- This is particularly important for infrastructure, energy, manufacturing, and industrial developments that require long-term financing and policy consistency.
Coronation Merchant Bank’s outlook reflects a rising level of institutional confidence that reform-led stability can unlock sustainable growth across the Nigerian economy.
What you should know
Nigeria’s FX reforms have significantly reshaped the structure and operation of the currency market.
The Central Bank of Nigeria has unified multiple FX windows into a market-driven, willing-buyer-willing-seller framework aimed at improving transparency and price discovery.
- The unification of FX windows has reduced arbitrage opportunities and improved confidence in exchange rate formation.
- The introduction of the Electronic FX Matching System has automated trade execution and enhanced market efficiency.
- The Nigerian FX Code has clarified rules and governance standards for market participants, supporting greater predictability and lower volatility.
Combined with broader fiscal and structural reforms, these measures are supporting capital inflows and long-term planning, while underpinning the government’s ambition to scale investment across infrastructure, energy, manufacturing, and housing as part of its push toward a $1 trillion economy by 2030.
