Business

Economists Predict Positive Impact of Naira Appreciation on Inflation and Import Prices

Published

1 year ago

December 10, 2024

373 Views

Nigerian economists are optimistic that the recent appreciation of the Naira against the U.S. dollar, if sustained, could significantly reduce the cost of imported goods and curb the country’s headline inflation, which stood at 33.88% in October 2024.

Gbolade Idakolo, Chief Executive Officer of SD & D Capital Management, and Prof. Godwin Oyedokun of Lead City University, Ibadan, shared these insights on Monday.

The Naira’s exchange rate improved to N1,538.50 per dollar on December 9, 2024, from N1,740 a month earlier. This represents a gain of N201.50 in the official market, despite slight fluctuations in rates at the start of the week.

This progress follows the Central Bank of Nigeria’s (CBN) introduction of the Electronic Foreign Exchange Matching System (EFEMS), aimed at fostering transparency and reducing market distortions. The platform has reportedly curbed speculative trading in the parallel market, bolstering confidence in the Naira’s stability.

Key Perspectives on the Naira’s Strengthening

Gbolade Idakolo described EFEMS as a “game changer” for its transparency and effectiveness in unifying forex bidding platforms. He emphasized that the system had diminished speculative activities in the parallel market, leading to a stronger Naira.

He highlighted the positive implications for importers, noting that the reduction in import duty exchange rates would decrease clearing costs, which are a significant factor in determining the prices of imported goods.

“The recent drop in exchange rates for import duties is a step in the right direction. Lower clearing charges will lead to reduced prices for imported goods, benefiting consumers,” Idakolo stated.

However, he urged the CBN to maintain strict regulatory oversight of banks, Bureau De Change operators, and other market players to ensure the sustainability of the gains.

Prof. Godwin Oyedokun attributed the Naira’s appreciation to increased FX inflows, reduced dollar demand, and strategic CBN interventions. He agreed that lower exchange rates for import duties could indirectly lower prices of imported goods, provided importers pass on the savings to consumers.

However, Oyedokun cautioned that several factors could limit the impact of the Naira’s appreciation on imported goods, including:

Global supply chain disruptions that may inflate costs.
Domestic economic conditions, such as inflation and government policies.
Importer behavior, as some importers might prioritize profit margins over price reductions.

To sustain the Naira’s strength, he advised the CBN to continue promoting macroeconomic stability, attracting foreign investment, and addressing structural issues like corruption, insecurity, and inadequate infrastructure.

“While the recent Naira appreciation is encouraging, it may be temporary. Strategic and consistent interventions by the CBN will be crucial to sustaining this progress,” Oyedokun concluded.

Outlook

The economists agree that the Naira’s appreciation offers an opportunity to alleviate inflationary pressures, particularly in import-dependent sectors. However, sustained gains will require consistent policy measures and vigilance from the CBN to ensure long-term economic stability.

Business

CBN places suspicious BVNs on 24-hour watchlist

These provisions are set to take effect from 1 May 2026.

Published

23 hours ago

March 13, 2026

OCHEFA

21 Views

Photo: Olayemi Cardoso , CBN Governor

To combat fraud, the Central Bank of Nigeria (CBN) has unveiled new regulations aimed at strengthening fraud control and digital banking security across the country.

These provisions are set to take effect from 1 May 2026.

In a circular issued to all banks, other financial institutions and payment service providers, the apex bank details amendments to the Revised Regulatory Framework for Bank Verification Number (BVN) operations and additional requirements for instant payment services.

Under the new BVN framework, financial institutions are required to maintain a temporary watchlist for BVNs implicated in suspected fraudulent transactions.Any BVN placed on this list will remain there for a maximum of 24 hours, during which the account holder will be contacted to provide clarification.

The circular also sets age restrictions for BVN enrolment, limiting registration to individuals 18 years and above, and restricts phone number amendments linked to BVNs to a single change.

Access to BVN databases will now be exclusively for CBN-licensed financial institutions, with the central bank retaining the right to grant access in extenuating circumstances under existing laws.

Business

Indorama, Nigerian Breweries and Genesis Power plan 45,000 tons rPET Plant in Lagos

The initiative aims to meet fast rising demand for recycled content, reduce plastic waste and create local value through improved collection systems.

Published

23 hours ago

March 13, 2026

OCHEFA

22 Views

Indorama Ventures Public Company Limited, Nigerian Breweries Plc and Genesis Power and Energy Solutions Ltd have entered a strategic partnership to establish one of Africa’s largest state-of-the-art recycled PET (rPET) production facilities in Nigeria.

Located in Lagos, the site represents an investment to develop a facility capable of producing up to 45,000 tons of food grade rPET resin yearly, with start up targeted in the first half of 2027, a statement by the partners said.By converting post consumer PET bottles into high quality recycled material for packaging applications.

The initiative aims to meet fast rising demand for recycled content, reduce plastic waste and create local value through improved collection systems.

The project is expected to support recycling capacity in Nigeria, subject to regulatory approvals, technical validation and operational implementation.

Together, the partners aim to establish commercially viable rPET operations that enable responsible growth and long-term environmental impact.

Commenting on the landmark partnership, Executive President of Petchem and Chairman of ESG Council at Indorama Ventures, Yash Lohia, said: “This partnership marks a defining milestone in our global recycling journey. By establishing our largest recycling facility to date and one of the largest rPET sites in Africa, we are bringing Indorama Ventures’ global expertise, proven technologies and long-term vision for circularity to a region with immense growth potentials.

This investment reflects our belief that scaling sustainability solutions locally is essential to building resilient, sustainable packaging systems that deliver lasting environmental and economic value.”

Chairman and CEO of Genesis Energy, Akinwole II Omoboriowo, said: “This compelling initiative demonstrates Genesis’s commitment to deploying capital to climate-resilient investments by leveraging clean energy as a strategic nexus to advancing viable economic opportunities.

The investment is also a testament to how cross-sector partnerships can enable sustainable industrial development. By combining circular economy principles with resilient infrastructure and energy solutions, the initiative supports long-term environmental impact and local value creation.”

Business

CBN restricts mobile banking apps operation to one device

In the circular signed by the CBN’s Director of Payments System Policy Department, Musa Jimoh, said ” Implementation of the above provisions will take effect from July 1, 2026.”

Published

1 day ago

March 13, 2026

OCHEFA

24 Views

The Central Bank of Nigeria on Friday restricted the operation of mobile banking applications (apps) to one device.

This was contained in a circular to all banks and other financial institutions and payment service providers (PSP) announcing additional guidance for the operations of instant payments (IP) in Nigeria.

In the circular signed by the CBN’s Director of Payments System Policy Department, Musa Jimoh, said ” Implementation of the above provisions will take effect from July 1, 2026.”

The circular read: “The Central CBN in line with its mandate of promoting financial system stability hereby issues additional guidance for the operations of Instant Payments in Nigeria.

All Financial Institutions (FIs) offering Instant Payment (IP) shall provide the following additional functionalities: Mandatory device binding: Mobile financial services applications (apps) shall only be enabled on one device at a time, and customers cannot operate the apps concurrently on multiple devices.“Migration to another device shall trigger automatic re-activation and authentication.

“Customers shall have the option to opt-out of opt-in to IP service at any time and for any given period.

This process shall be subject to Multi-Factor Authentication (MFA) control. Default setting shall be Opt-in upon on-boarding a new customer.

“In the opt-out mode, a customer shall not be able to carry out online instant transfer of funds (intra or inter) from his/her account to another customer.“

However, customers can physically visit the financial institution to effect transfer during this period.

“Voluntary Transaction Limit: Subject to the existing maximum limits of N25 million for individuals and N250 million for corporates, customers shall have the option to adjust the limits as needed.