Review of CBN operational changes on the foreign exchange market
In a bid to address the extant economic gaps that exist in the Nigerian Foreign Exchange
Market (the “FX Market”), the Central Bank of Nigeria (“CBN”) released a circular
dated June 14, 2023 titled “Operational Changes to the Foreign Exchange Market” (the
“Circular”). This Circular introduces notable changes to the country’s FX Market and its
operations. The purpose of this paper is to highlight the changes and impact of the
introduced changes on the foreign exchange market as well as its interplay with the
Nigerian economy.
Building resilience: recapitalizing nigerian banks in the face of severe naira devaluation
This article analyses the strategy of the Central Bank of Nigeria (CBN) to recapitalize Nigerian banks in order to pave way for Nigeria’s projected economic goal of achieving a Gross Domestic Product (GDP) of $1 trillion over the next 8 years. The article highlights why it is crucial for Nigerian banks to increase their current capital base of N25 million in view of gross loss of value occasioned by depreciation of the Naira and inflationary pressures. Importantly, the article addressed strategies which Nigerian banks may explore to raise funds to enable them meet the revised capital requirements.
Enhancing dollar liquidity in Nigeria through securitization: prospect and risks
Dollar liquidity in Nigeria has been a huge economic challenge in the country in recent times. As a major step to enhance dollar liquidity in the country, the Federal Government of Nigeria (FGN) announced its plan to securitize its expected dividends for a period of 5 years in Nigeria Liquefied Natural Gas Limited (NLNG) in favor of its lenders, to raise $7 billion.
This step holds significant opportunities for the country’s economy, but it also comes with inherent risks that need to be carefully evaluated. These opportunities and the possible risks are addressed in this article.