New Telegraph-Admin The Chief Executive Officer of The CFG Advisory, Mr. Adetilewa Adebajo, has stressed the need for reforms to be geared towards promoting price discovery in Nigeria’s foreign exchange markets.
In an article titled, “Shouldn’t the naira be trading below N1,000/ US$?”, the financial expert contended that although the forex reforms introduced by the Central Bank of Nigeria (CBN) has led to the stability of the naira, the local currency is likely to appreciate further against the greenback if more emphasis is placed on boosting price discovery in the forex markets, especially as other key factors currently support a stronger naira.
He hinted that the current exchange rate of the naira-above N1500 per $1- could be as a result of “speculation, distortion and manipulation” in the forex markets.
Adebajo stated: “With a new transparent FX management in place driven by a Bloomberg bid and offer platform, the spread between the parallel markets and official markets has reduced from over 50% in 2022 to under 5% in 2025.
“FX flows have increased. As of January 2024 to date, FX inflows have consistently outpaced FX outflows.
In 2025, average monthly FX turnovers increased to $8.1 billion compared to $5.5 billion in 2024. “Nigeria’s external reserves went up from $30 billion in March 2024 to $40 bn by September 2024. External reserves have stabilised at $38 billion by Q1 2025.
The net reserve position has also made an impressive five-fold recovery from a low of $4 billion in 2023 to $23.1 billion by yearend 2024.” Continuing, he said:
“The new Nigerian National Petroleum Corporation (NNPC) boss made drilling re-entry a priority. This is a common practice in mature oil fields to optimise production and reduce costs.
According to Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Rig count has gone up from 18 to 38 in the past year and is expected to hit 50 by year-end.
The urgency to audit, reconcile, and determine the true position of the forward oil sales contracts has become apparent. “Nigeria’s imports in 2024 were $43 billion.
Given the average monthly turnover for the FX market, we can expect the market to have the capacity to generate between $97-100 billion annually.
“Deducting import values from the past five years, the current annual market FX turnover will cover imports and leave room for about $40 billion to $50 billion for invisibles and other informal requirements for FX in the market.
“So, given that the CBN has cleared its FX backlog and now contributes only two per cent of the FX market turnover, where are the demand and supply exponents who claim dollar demand exceeds supply?”
“We need to re-examine the FX markets and understand that they support the economy and are not a profit centre. FX trading facilitation should move towards price discovery.
