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  • Nigeria’s push to lead Africa’s $180b digital trade revolution

    Nigeria’s push to lead Africa’s $180b digital trade revolution

    From a continent of long reputed potential, Africa is transforming to a continent buzzing with economic prosperity. Her digital economy is projected to reach $180 billion in 2025, thus, contributing significantly to her Gross Domestic Product (GDP), creating new job opportunities, and expanding regional trade. But, Nigeria—Africa’s largest economy—is poised to lead this evolving digital trade revolution, encouraged by her sheer market size, entrepreneurial drive and rapidly expanding digital infrastructure. Assistant Editor CHIKODI OKEREOCHA looks at some of the strategic actions taken by the President Bola Tinubu administration to solidify Nigeria’s position as Africa’s digital trade leader.

    The landscape of Africa’s digital trade and trade in services has witnessed significant growth in recent years, drawing sufficient strength from the African Continental Free Trade Area (AfCFTA) Agreement and its Protocols, particularly the Protocol on Digital Trade, the first of its kind in the world, and the Protocol on Trade in Services.

    Digital trade and trade in services, which are widely acknowledged as game-changers and key drivers of Africa’s economic transformation, are already helping to diversify economies, increase competitiveness, and improve productivity.

    This is hardly surprising, considering that the Continent’s digital economy is projected by the United Nations Conference on Trade and Development (UNCTAD) to reach $180 billion in 2025, up from $115 billion in 2020; thus, contributing significantly to Gross Domestic Product (GDP), creating new jobs, and expanding regional trade.

    For instance, while the World Bank estimates that digital technologies can create over 10 million new jobs in Africa by 2025, primarily in the services sector, the AfCFTA is expected to increase intra-African trade to 50 per cent by 2030, with digital trade as key driver.

    Adopted by the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) in Addis Ababa, Ethiopia, in January 2012, the AfCFTA is arguably, the most ambitious and strategic push to build an integrated, diversified and industrialised continent capable of holding its own in the global economy.

    With its promise of creating a continental trade bloc of 1.3 billion people across Africa, with a combined GDP of about $3.4 trillion, the AfCFTA, which implementation kicked off on January 1, 2021, is easily the world’s largest trade agreement since the creation of the World Trade Organisation (WTO) in 1994.

    However, the AfCFTA Agreement and its Protocols on Digital Trade and Trade in Services present new hope that captures Africa’s audacious step in driving accelerated trade across borders using home-grown Africa-focused tools and solutions. But the AfCFTA Protocol on Digital Trade is particularly ground-breaking.

    The Minister of Industry, Trade and Investment, Dr Jumoke Oduwole explained that it is the first ever continental digital framework and it covers modern technology, new economic opportunities, data protection and cross-border digital connectivity in an innovative manner, different from the traditional protocols.

    The minister, in a statement, which was made available to The Nation, said Nigeria is currently solidifying its position as Africa’s digital trade leader, by working towards the ratification of the Protocol on Digital Trade to the AfCFTA Agreement.

    She said beyond this, the Federal Government under President Tinubu’s administration is also working to strengthen policy harmonization by aligning national regulations with AfCFTA frameworks.

    Nigeria, Dr Oduwole added, is also enhancing trade facilitation through digital customs processes and e-commerce policies, and expanding digital infrastructure by increasing broadband penetration and fostering public-private investments in connectivity.

    The minister noted that with over 109 million internet users and a thriving mobile economy, Nigeria has the foundation to lead Africa’s digital commerce evolution. She described the country’s approach to digital trade facilitation as decisive.

    Dr. Oduwole, however, said expanding broadband access, modernising Customs procedures for e-commerce, and ensuring interoperability of payment systems will be essential for driving inclusive growth.

    She added that by deepening engagement with regional trade frameworks and harmonising digital regulations, Nigeria is positioning itself as a continental hub for digital services exports, facilitating cross border transactions, fostering innovation and attracting global investment.

    Seizing the opportunities in services sector

    With services sector contributing over 50 per cent to GDP, Nigeria is already a regional leader in Financial Technology (Fintech), creative industries, professional services, and digital platforms.

    For instance, Nigeria’s fintech industry, which is home to five of Africa’s nine unicorns, including Flutterwave, Interswitch, Moniepoint, and OPay, has driven cross-border payments, mobile money adoption, and financial inclusion, powering digital transactions across the continent.

    Indeed, fintech is one of Africa’s strongest services-driven industries, with the market projected to reach $3.3 billion by 2025. The growth of fintech in Africa is driven by the increasing adoption of mobile payments, online banking, and other digital financial services.

    Companies such as Chipper Cash, valued at over $2 billion, OPay, valued at over $2 billion, and Flutterwave valued at $1 billion, are leading examples of this growth, providing innovative payment solutions and financial services to millions of users across the continent.

    Similarly, the creative economy, which is home to Nollywood, Afrobeats, a growing gaming industry and digital content exports, highlights the strength of Nigeria’s creative talents. The creative economy also demonstrates first-hand how digital platforms can turn cultural assets into globally exportable services, shaping and redefining pre-conceived perceptions about the continent.

    Information Technology (IT) outsourcing firms are also expanding into new markets, strengthening Nigeria’s position in Africa’s knowledge economy. Initiatives such as the Ministry of Industry, Trade and Investment’s National Talent Export Programme (NATEP) launched in September 2023, and the Outsource to Nigeria Initiative (OTNI) backed by the Office of the Vice President are enabling this growth.

    The Three Million Technology Talents Program (3MTT) of the Ministry of Communications, Innovation and Digital Economy is also enabling this growth and opening up opportunities for access to high quality Nigerian talent at a global scale.

    The 3MTT programme, according to the Minister of Communications and Digital Economy, Bosun Tijani is a critical part of the Renewed Hope Agenda, and is aimed at building Nigeria’s technical talent backbone to power her digital economy and position Nigeria as a net talent exporter.

    Launched in 2022, the 3MTT initiative aims to produce three million technically proficient individuals over four years in fields such as Artificial Intelligence (AI), data science, cybersecurity, cloud computing, and other emerging technologies.

    In professional services, Nigerian legal, consulting, and accounting services, as well as the rise of e-health and e-learning solutions further underscores the country’s role in providing technology-driven services that address continental gaps in healthcare and education.

    The creative economy and e-commerce are significant services-driven industries in Africa, with the continent’s music industry alone expected to generate $1.3 billion in revenue by 2025, driven by increasing demand for African music, film, and other creative content.

    Africa’s e-commerce market is growing rapidly, and is projected to reach $75 billion by 2025, according to multinational strategy and management consulting firm McKinsey. Companies such as Jumia, valued at over $1 billion, are tapping into this growth, offering music and video streaming services, as well as a wide range of products, including electronics, fashion, and home goods.

    Other leading e-commerce players in Africa include Konga.com, valued at over $200 million and PayPorte valued at over $100 million, according to Forbes 2024 report.

    Digital finance, e-health and e-learning are also growing rapidly in Africa, driven by the increasing adoption of digital technologies and the need for innovative solutions to address the Continent’s development challenges.

    Companies such as Andela, valued at $1.5 billion, which provides remote work opportunities for African software developers and Esusu, valued at $1 billion, which offers credit building services for tenants, are examples of this growth.

    Furthermore, the rise of African unicorns such as Interswitch, valued at over $1 billion, Wave, valued at over $1.7 billion, and MNT-Halan, valued at over $1 billion, demonstrates the continent’s potential for creating successful and scalable businesses in services-driven industries.

    In all of these, Nigeria has never wavered in her resolve to lead the charge in Africa’s $180 billion digital trade revolution, propelled by the AfCFTA Protocol on Digital Trade and the Protocol on Trade in Services. The country has taken steps to reinforce her leadership in innovation is digital public infrastructure, for instance.

    One of the steps was the introduction of the Contactless Passport Application System (CONPAS) by the Nigeria Immigration Service (NIS), streamlining passport processing for citizens and enhancing ease of travel, in line with President Tinubu’s Renewed Hope Agenda.

    According to the Minister of Interior, Olubunmi Tunji-Ojo, the initiative showed the Federal Government’s dedication to allowing passport renewals to be conducted without physical presence, cutting down processing times significantly.

    While noting that it also reinforces modernisation as Nigeria embraces technology to meet the contemporary needs of her citizens, Tunji-Ojo, added that the initiative is in line with the administration’s pledge to digital transformation of the country as Nigeria races towards achieving the $1 trillion-dollar economy ambition.

    The Nation learnt that this initiative, alongside other digital trade advancements, including investments in port modernisation and the on-going implementation of its National Single Window Project are streamlining trade corridors and reducing Customs clearance times.

    These reforms enhance Nigeria’s role in handling a major share of West Africa’s cargo and passenger traffic, and reflects the current administration’s broader commitment to harnessing technology for efficiency and transparency through ease of doing business.

    Dr Oduwole emphasised that with Nigeria’s sheer market size, entrepreneurial drive, and rapidly expanding digital infrastructure, she has all the right ingredients to be at the forefront of Africa’s transformation.

    “The country has made significant progress in liberalising key AfCFTA priority sectors—agribusiness, pharmaceuticals, transport and logistics and automotives—aligning with regional trade integration efforts,” she stated, pointing out, for instance, that with agriculture contributing over 23 per cent to GDP, Nigeria is expanding agro-processing and export capacity to enhance competitiveness and access to global markets.

    The pharmaceutical sector, forecast by the Goldstein Market Intelligence to grow at a Compound Annual Growth Rate (CAGR) of 9.1 per cent from 2017 to 2030, is also strengthening local production to reduce dependence on imports and improving health security.

    Similarly, Nigeria’s automotive industry is also advancing rapidly, fueled by government-led projects promoting Compressed Natural Gas (CNG) and electric vehicles (EVs). This followed President Tinubu’s September 2023 launch of the Presidential Compressed Natural Gas Initiative (PCNGI), with a target to convert one million vehicles to CNG by 2027.

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    The essence of the Initiative is to reduce the country’s reliance on petrol. And reinforcing its commitment to clean energy, the government has also supported locally produced Electric Vehicles (EVs) by leading indigenous manufacturers such as Innoson Vehicle Manufacturing (IVM) and JET Motor Company, marking a bold step toward sustainable mobility and industrial expansion.

    That’s not all. Nigeria is also strengthening local vehicle production and industrial growth under the National Automotive Industry Development Plan (NAIDP), as indigenous companies like IVM lead the charge by manufacturing vehicles with 70 per cent locally sourced parts, bolstering domestic manufacturing capabilities.

    Despite these significant milestones, Dr. Oduwole said given the evolving digital space, there is a sense of urgency for Nigeria and Africa in general to keep ahead of the curve and work collaboratively to strengthen the digital trade potential across the continent.

    According to her, the sad reality is that some African countries are still at the start-line of this digital race, even as the rest of the world is already adapting to various levels of Artificial Intelligence (AI).

    “There is, therefore, an imperative for the on-going 38th Ordinary Session of the African Union Assembly of the Heads of State and Government to establish a coordinated framework for championing the entrenchment and advancement of digital trade under the AfCFTA and supporting member states to strengthen their capacities to embrace and expand digital trade across the continent,” the minister stated.

    President Tinubu was in Addis Ababa, the Ethiopian capital, where he participated in the 38th Ordinary Session of the Assembly of the African Union Heads of State and Government which held from February 14 to 18, 2025.

    Dr. Oduwole said the designation of a Continental Champion for the implementation of the Protocol on Digital Trade, at the Session, will go a long way in advocating for and ensuring support for African States and the private sector for increased digital trade.

    “The vision and promise that the Protocol on Digital Trade holds can only be realised through coordinated multi-stakeholder collaboration. To that end, my call to action for Governments is the prioritisation of ratification and domestication of the Protocol as well as alignment of legal frameworks to support digital trade,” she stated.

    The hurdles

    Despite the significant growth potential of Africa’s digital economy and trade in services, several challenges have hindered their development. For instance, regulatory fragmentation and inconsistent standards across borders are major obstacles, making it difficult for digital service providers to operate seamlessly across different countries.

    Also, limited access to financing for digital service providers, lack of digital inclusion, infrastructure and connectivity deficits, and a digital skills gap contribute to the challenges facing digital trade and trade in services in Africa.

    Furthermore, cyber security concerns, including increasing threats and data breaches compromise the integrity of digital trade transactions and erode trust in digital services.

    However, the AfCFTA is not folding its arms. It is currently harmonizing regulations and standards across the continent and facilitating the growth of digital trade. Moreover, initiatives such as Afreximbank’s Pan-African Payment and Settlement System, the AfDB’s Digital Africa initiative and the World Bank’s Digital Economy for Africa initiative are working to improve digital infrastructure, enhance digital skills, and promote digital inclusion.

    Additionally, cyber-security measures, such as the African Union’s Cyber-security Convention, are being implemented to protect digital trade transactions and build trust in digital services.

    Dr. Oduwole, however, stressed the need for African States to prioritise the ratification and domestication of the Protocol on Digital Trade after the adoption of its eight annexes at the 38th Ordinary Session of the Summit of the Heads of State and Government.

    Beyond that, she said decisive steps must be taken to ensure vertical regulatory and statutory alignment as well as harmonization at the national and regional levels. According to her, “This ameliorates the frustrations in dealing with the ‘spaghetti bowl’ of fragmented frameworks from country to country.”

    Closely related is the establishment of horizontal coherence between the national strategies and the AfCFTA Protocol on Digital Trade to essentially ensure that government initiatives are drawn from the same proverbial hymnbook as the strategies for implementing the Protocol.

    This, according to the minister, will include paying deliberate attention to initiatives that advance the provision of public digital infrastructure, development of tools for a digital marketplace, digital inclusion for MSMEs and other underrepresented groups, as well as providing the enabling environment for digital innovation to thrive.

    As with other key aspects of the AfCFTA multi-faceted mandate, Dr. Oduwole said there is need for multi-stakeholder collaboration in the implementation of both the Protocols on Digital Trade and Trade in Services.

    “This entails leveraging strategic partnerships including with the private sector, the AfCFTA Secretariat, regional organisations, development partners, Development Finance Institutions (DFIs) and other transformational alliances,” she said.

    The minister pointed out that honing these high impact collaborations will help with mobilization of resources, policy harmonisation and access to finance in addition to enhancing e-commerce/digital trade platforms and generally make cross-border trade more efficient.

    She also said capacity building is a critical requirement, given the fast evolving and changing dynamics of the digital trade and trade in services ecosystem. She said trained negotiators and regulatory bodies are required to design and implement AfCFTA-aligned policies as well as harmonize trade standards and support efficient customs procedures.

    In the same vein, awareness creation among African businesses, (as well as investors globally), sensitizing them about the benefits of the AfCFTA Protocols on Digital Trade and Trade in Services, will enhance their capacity to leverage opportunities in those sectors.

    “Scaling digital skills programmes to equip African youth for high-demand service job, strengthening innovation ecosystems to enhance service sector competitiveness and expanding regional digital marketplaces for seamless trade in services, are a few examples of what is possible when capacity building is embraced,” Dr. Oduwole stated.

    While admitting that the road ahead demands deliberate action, the Minister, however, said it requires bold, forward-looking strategies that bridge gaps and transform challenges into opportunities.

    While insisting that Nigeria has the digital momentum to lead Africa’s digital trade revolution, the minister, however, said leadership is not just about potential—it is about deliberate, strategic action.

    “By aligning policy, infrastructure, and collaboration efforts, Nigeria can move from being a key player to become the undisputed digital trade leader of and for Africa,” she emphasised.

  • LASAMBUS: Overcoming limitations to fulfil life-saving mission

    LASAMBUS: Overcoming limitations to fulfil life-saving mission

    When an accident happens on any of the chaotic roads in Lagos, every second counts. But for many residents, getting emergency medical help can feel like a gamble. While there are lifesaving interventions by the Lagos State Ambulance Service (LASAMBUS), others share frustrating stories of delayed calls. Is LASAMBUS still delivering on its mission? CHINYERE OKOROAFOR reports on its successes, struggles and the urgent need for a stronger emergency response system in the state.

    On a humid evening in Lagos, Adeolu Alade was driving home from work when he witnessed a horrific accident along the Oshodi-Apapa Expressway. A commercial bus had rammed into a stationary truck, leaving passengers trapped and bleeding.

    In a panic, Adeolu dialed 112, the Lagos emergency line, hoping for a swift response from the Lagos State Ambulance Service (LASAMBUS).

    “I kept hearing music playing while waiting for an operator,” he recalled. “Minutes felt like hours before someone finally picked up.” By the time an ambulance arrived, bystanders had already driven some victims to a nearby hospital on motorcycles. Others were left helpless, waiting for medical attention that came somewhat late.

    Role of emergency medical services in a fast-growing Lagos

     Lagos, Nigeria’s economic hub is one of the fastest-growing cities in Africa, with a population exceeding 20 million people and increasing daily due to urban migration.

    The city’s rapid expansion has led to higher traffic congestion, increased road accidents and a greater demand for emergency medical services (EMS).

    According to data from the Federal Road Safety Corps (FRSC), Lagos records thousands of road traffic accidents annually, with many victims requiring urgent medical attention.

    To address this growing need, LASAMBUS was established in 2001 to provide free emergency medical response across the state.

    The service was designed to ensure that accident victims and critically ill patients receive immediate care before reaching a hospital, significantly improving survival rates.

    Studies show that victims of Road Traffic Accidents (RTAs) without pre-hospital care are 5.5 times more likely to die than those who receive swift medical intervention.

    However, LASAMBUS has faced several challenges over the years, including delays due to traffic congestion, poor road access and prank calls.

    A major setback occurred during the #EndSARS protests in 2020, when several ambulance points were vandalised, disrupting emergency response operations. Although the five locations such as the Tollgate and the Third Mainland Bridge, among others, have been restored with new ambulance vehicles, there are concerns over the visibility, response time and efficiency of LASAMBUS. Residents say they no longer see the emergency vehicles stationed at their usual locations.

    Many worry that the service may not be fulfilling its purpose

    One commuter who passes through Lagos Tollgate daily noted that he had not seen an ambulance there for a while.

    According to the commuter, if the emergency toll line doesn’t connect, it would be helpful to have someone available at the designated ambulance points to report emergencies in person.

    Recalling an incident, he explained that while driving from Mowe to Maryland, he witnessed an accident near Isheri and repeatedly tried calling the emergency toll line but couldn’t get through.

    Since he was heading toward the toll gate, he assumed he would find someone there to report the accident.

    However, when he arrived, he saw no ambulance personnel—only two LASTMA officials. He reported the situation to them and continued his journey.

    Data from a study titled “Lagos State Ambulance Service: A Performance Evaluation” highlighted these mixed realities.

    Between December 2017 and May 2018, LASAMBUS received 1,352 road traffic accident (RTA) calls, but only 37.1% were attended to. Factors such as traffic congestion (60%), poor access (17.8%) and prank calls contributed to delays.

    When The Nation visited five key ambulance points—Lagos Tollgate (Lagos-Ibadan Expressway), Mile 12 (Kosofe LGA), Third Mainland Bridge, Anthony (along Oshodi-Oke Expressway), and Mobil (Lekki-Epe Expressway in Eti-Osa LGA)—there was no ambulance in sight.

    However, Lagos State Traffic Management Authority (LASTMA) officials at these locations confirmed that LASAMBUS is still active.

    One official at the Lagos Tollgate explained that the ambulance had just left to respond to an emergency.

    Similarly, a female officer at the Anthony point confirmed that the ambulance had been dispatched to Oshodi for an emergency and was later called to handle an accident in Bariga.

    The officer emphasised that while ambulances may not always be parked at designated spots, they are constantly on the move responding to distress calls.

    Some residents also complained about delays when calling emergency numbers 767 or 112, saying the lines play music for a long time before a call centre agent responds.

    As the city continues to grow, experts argue that more ambulances, better coordination, and increased public awareness are essential to strengthening emergency response systems in Lagos.

    A public health specialist, Dr. Ifeoma Onyeoma explained that having more ambulances will reduce delays, especially in a busy city such as Lagos.

    She also stressed the importance of a well-organised system where emergency teams can communicate quickly and reach accident scenes faster.

    “Many people don’t know how to call for help during emergencies. Public awareness campaigns will help residents understand how to contact LASAMBUS and what to do while waiting for help,” she said.

    Despite these challenges, the Director of Lagos State Ambulance Service (LASAMBUS), Mrs. Beatrice Makinde insists that LASAMBUS remains fully operational, ensuring swift medical assistance across the state.

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    In a chat with The Nation, Makinde explained that the ambulances are always on the move, responding to emergency calls.

    She said this is why people may not often see them parked at their usual spots.

    “We receive over 200 emergency calls daily, ranging from road traffic accidents to medical emergencies and building collapses. Our ambulances are always on the move,” the official said.

    According to Makinde, the ambulance service operates from five base stations strategically located across Lagos, including Badagry, Lagos Island, Ikeja and Ikorodu to ensure quick response to emergencies.

    She acknowledged that some ambulance points were vandalised during the #EndSARS protests but have since been renovated and reinstated at key locations, including the Tollgate, Third Mainland Bridge, and the rest.

    “When there is an emergency call, it is routed through our Command and Control Centre, which then directs the nearest available ambulance to the location. Our teams stabilise patients at the scene before transporting them to the appropriate hospitals,” she said.

    Makinde further explained that some Lagos residents call the emergency numbers just to test if they are working. When the call is answered, they simply say, “Oh, sorry, we just wanted to check if the number still works.”

    She reassured residents that the emergency numbers work efficiently, even as she urged people to avoid prank calls, as they could delay help for those in real emergencies. LASAMBUS provides free emergency medical assistance, ensuring swift response to critical situations.

    Its services include on-site stabilisation, such as suturing and infusion therapy, to keep patients stable before hospital transport.

    Depending on the severity of the case, the service director said patients are taken to specialised hospitals, trauma centres for fractures and severe injuries, while neurological cases are referred to the Lagos State University Teaching Hospital (LASUTH).

    The service plays a crucial role in handling collapsed buildings, road accidents and other medical emergencies, ensuring timely intervention and life-saving care.

    Beyond emergencies, Makinde said the ambulance service also supports large gatherings, as Lagos State mandates the presence of an ambulance at events with over 100 attendants.

    Event organisers must request an ambulance at least two weeks in advance through the Ministry of Health, reinforcing the government’s commitment to public safety.

    Residents can request an ambulance by calling 767 or 112, which routes calls through the Lagos State Command and Control Centre. The centre coordinates emergency responses among multiple agencies, including fire services, the police Rapid Response Squad (RRS) and LASTMA.

    She added that the state currently operates 36 ambulances, which she admitted are not sufficient because of the state’s growing population.

    She commended the Lagos State Governor, Sanwo-Olu for his commitment to improving emergency services, stating that more ambulances may be added this year.

    “The governor has the interests of Lagos residents at heart. That is why our emergency response system remains one of the best in the country,” she stated.

    Despite the challenges, LASAMBUS remains a lifeline for many residents of Lagos in critical moments, responding to hundreds of emergency calls daily, including road accidents, building collapse, and emergency support at public gatherings, among other emergency services.

    For instance, in April 2022, a 27-year-old expectant mother, Shukurat Isa went labour while traveling on a public bus from Awoyaya to Orile in Lagos.

    As the bus reached the Law School Bus Stop on Victoria Island, she began experiencing intense labour pains. A fellow passenger promptly called the Lagos State Ambulance Service (LASAMBUS) for assistance.

    Within 14 minutes of receiving the distress call at 8:02 a.m., a LASAMBUS team arrived at the scene by 8:16 a.m.

    The emergency medical team assisted Shukurat in delivering a healthy baby boy weighing 3.3 kg. After ensuring both mother and child were stable, they transported them to the Ikate Health Centre for further care.

    The incident highlights the critical role of LASAMBUS in providing timely emergency medical services in Lagos.

    The swift response and professional care not only ensured the safety of Shukurat and her newborn but also underscored the importance of public awareness with regard to the availability and proper use of emergency services.

    While improvements are needed, more ambulances, better coordination, and faster response time, residents also have a role to play.

    Understanding how to use emergency services properly, avoiding prank calls, and providing clear accident details can make a big difference. In a rapidly growing city like Lagos, a strong, well-functioning emergency system can mean the difference between life and death.

    But with Lagos’ growing population and heavy traffic, the demand for efficient pre-hospital emergency care has never been greater. The question remains: Can LASAMBUS overcome its limitations to truly fulfil its life-saving mission?

  • Third-party insurance: A lifeline for victims or burden for vehicle owners?

    Third-party insurance: A lifeline for victims or burden for vehicle owners?

    In a sweeping move to enforce Nigeria’s Insurance Act 2003 and the Motor Vehicle (Third-Party Insurance) Act, 1950, the police launched a nationwide crackdown on February 1 to ensure compliance with mandatory third-party insurance. This move has sparked mixed reactions, with many motorists becoming more aware of the legal protections the policy provides. In this special report, Assistant News Editor/Head, Security Desk, PRECIOUS IGBONWELUNDU examines the complexities of enforcement and explores the ongoing debate about its effectiveness in improving road safety and protecting accident victims

    There was chaos at the busy Cele Bus Stop in Okota yesterday morning after a commercial bus grazed a Sports Utility Vehicle (SUV). Without hesitation, the driver of the SUV rushed out of his vehicle, causing a major traffic disruption. He stormed toward the danfo, yanked the commercial driver from his seat, and in a matter of moments, both men were locked in a heated argument that nearly escalated into physical confrontation. Thankfully, nearby law enforcement officers intervened, calming the situation and instructing that both vehicles be removed from the road to clear the way for other motorists.

    Scenes like this are all too familiar across the country. Road traffic accidents, whether serious or minor, often trigger intense reactions from drivers, regardless of time or location. In some cases, disputes escalate into fistfights, resulting in injuries. In others, the offending driver may apologize, only to be met with either acceptance or a demand for damage repairs from the victim. Despite being in place since 1950, many Nigerians are unaware that the N5,000 they pay annually for Third Party Insurance is not just a legal requirement or a bureaucratic formality. For many, it’s merely a way to avoid hefty penalties—such as a fine of N250,000, a year in prison, or both. While car owners dutifully pay the insurance premium each year to remain roadworthy, the financial burden of accidents still falls on their shoulders, with insurance companies raking in millions of naira in profits.

    However, a significant shift occurred in December 2022, when the National Insurance Commission (NAICOM) raised the cost of third-party insurance for private vehicles from N5,000 to N15,000. Commercial vehicles, staff buses, general-purpose vehicles, and articulated trucks now face higher premiums, with coverage extended up to N5 million. Tricycles, motorcycles, and bicycles are also included under the scheme, with premiums adjusted to reflect the different levels of risk associated with these vehicles. In addition, the commission increased the third-party claims cap from N1 million to N3 million, aiming to better align with current economic realities. The hike to N15,000, however, sparked a wave of public outrage, with many Nigerians accusing the commission of insensitivity to the struggles of ordinary citizens.

    It was only a few weeks ago that most of the motoring public, through the vigorous enforcement of the law by the police, became aware that their third-party insurance certificate provides coverage for such situations. They learned that, in the event of an accident, there was no need to resort to fighting or causing a scene, as the insurance company, by law, is obligated to cover the financial burden up to N3 million. This realization has been a turning point for many drivers, who now understand that the insurance is designed to protect them from the costs associated with accidents, making the often chaotic and confrontational aftermath avoidable.

    Third-party insurance policy and why the police took up its nationwide enforcement

    Compulsory Third-Party (CTP) motor vehicle insurance, also known as mandatory liability insurance, is a legal requirement in many countries around the world. This type of insurance provides coverage for injury or death caused to third parties in accidents, but typically does not cover damage to the insured vehicle.

    In Africa, countries like Nigeria, Kenya, South Africa, and Egypt have implemented third-party insurance policies. Globally, numerous other nations have also adopted mandatory third-party insurance, including France, the United Kingdom, Germany, Canada, Italy, Spain, India, China, Japan, Indonesia, Malaysia, Thailand, the Philippines, Pakistan, the Netherlands, Sweden, Norway, Poland, Russia, the United States, Mexico, Brazil, Argentina, Chile, Colombia, Peru, Australia, and New Zealand.

    Though the names and regulations surrounding third-party insurance can vary from country to country, the core objective remains the same: to provide coverage for third-party vehicle damage, as well as bodily injury or death resulting from accidents. This universal approach ensures that the financial burden of accidents is shifted away from individuals and placed on insurers, offering a level of protection to those who are affected by accidents, regardless of fault.

    Following a meeting with the Director General of NAICOM, who visited him at the Force Headquarters in Abuja, the Inspector General of Police (IGP), Kayode Egbetokun, announced to Nigerians that the vigorous enforcement of third-party insurance would begin on February 1. The police emphasized that the purpose of this enforcement was to enhance the safety of Nigerians and their property, particularly as road traffic accidents continue to be the leading cause of death and injury in the country.

    Data released last year by the National Bureau of Statistics (NBS) and the Federal Road Safety Commission (FRSC) revealed that at least 21,509 people lost their lives in road accidents across Nigeria between 2021 and September 2024. The families of these victims, many of whom were left impoverished by the sudden loss of breadwinners, should have been entitled to compensation from the insurance company of the vehicle(s) responsible for the fatalities, if the vehicles were covered by valid third-party or comprehensive insurance policies.

    In addition to the tragic loss of life, thousands of others sustained various injuries in road accidents, with many facing hefty medical bills that should have been covered by the insurance of the vehicle responsible for their injuries. In the event of a road accident, the law requires that the parties involved promptly invite traffic officers from the police or the FRSC to document the incident. Typically, photos and videos are taken of the damaged vehicles, properties, and any injured or deceased persons. The traffic officers also carry out investigations to determine which party was at fault, while emergency responders attend to the victims. All these steps are vital, as a police report is necessary to process an insurance claim. Without this official documentation, it becomes difficult, if not impossible, to seek compensation for the damages or injuries sustained in the accident.

    Aside from ensuring public order and safety during accidents, the process of involving the police also serves a crucial role in verifying vehicle documentation. This verification can help authorities identify stolen vehicles, track down criminals on the run, or uncover vehicles involved in illegal activities. Such checks enhance security by linking vehicles to their rightful owners and ensuring they are being used for lawful purposes.

    The proper enforcement of insurance laws also contributes to a more orderly road system. It not only strengthens public confidence in the police as effective enforcers of the law but also alleviates the financial burden on government resources. By making insurers responsible for covering the costs of accidents, the financial responsibility of victim compensation is shifted from the state to the insurance providers, thus relieving taxpayers from the heavy costs associated with road traffic incidents.

    Speaking on the matter, Police Spokesman ACP Olumuyiwa Adejobi emphasised the gravity of the situation, stating, “It’s high time the government and everyone took traffic management seriously, to save lives and property. Road traffic accidents kill more people than terrorism and insurgency.” He further clarified the police’s role in enforcing third-party insurance compliance, noting, “It’s a slap on the face of the police to say we are busybodies for enforcing third-party insurance compliance. It is the duty of the police, as the lead agency in internal security, to enforce all laws.” Adejobi made it clear that there was no room for debate on the issue, pointing out, “The Insurance Act is very clear. Why do we have the Motor Traffic Department (MTD) and maintain the traffic training school in Ikeja?”

    Data obtained from the police indicated that a total of 4,434 vehicles have been contraband since the commencement of the enforcement. Of the total contravened, 441 were charged to court, 3,225 released after compliance while 531 vehicles were under investigation. According to the police, the enforcement drive also seeks to address the issue of fake or fraudulent insurance certificates. Many people, the police noted, are unaware that only insurance companies registered and approved by NAICOM (National Insurance Commission) are recognized by law. These licensed insurers are the ones held liable in the event of an accident, ensuring that victims can receive compensation for their injuries or losses. By verifying the authenticity of insurance certificates, the enforcement helps protect the rights of accident victims, reducing the economic hardships and losses they would otherwise face, and ensuring that the financial burden of accidents is properly addressed through legitimate insurance channels.

    Read Also: Mixed feelings greet third-party insurance policy in Kogi, Nasarawa, Niger

    Legal framework and matters arising

    The legal framework surrounding third-party insurance in Nigeria is supported by several critical laws and regulations aimed at ensuring road safety and providing compensation to accident victims. At the core of these regulations is the Motor Vehicles (Third-Party Insurance) Act, which mandates that all motorists must maintain a minimum level of insurance coverage to protect against potential liabilities to third parties. This law serves as the primary legal requirement for third-party insurance in the country, ensuring that individuals involved in accidents can be compensated for damages or injuries caused by other drivers.

    In addition to this, Section 68 of the Insurance Act 2003 reiterates the compulsory nature of third-party motor insurance, imposing penalties on those who fail to comply. This section ensures that all motorists meet the necessary insurance requirements, and it provides a mechanism for holding defaulters accountable. The NAICOM Regulations further enhance this framework by assigning the National Insurance Commission (NAICOM) the responsibility of overseeing and enforcing compliance with insurance laws. NAICOM ensures that only registered and licensed insurers operate within the country, and it works to uphold industry best practices, ensuring that insurers meet the standards required to provide compensation to accident victims.

    The FRSC Act, 2007 also plays a significant role in enforcing traffic laws, granting the Federal Road Safety Corps (FRSC) the authority to ensure compliance with road safety regulations, including the third-party insurance requirement, on federal highways. This act empowers the FRSC to maintain order on the roads and ensure that drivers are adhering to the law. Lastly, the Police Act, Criminal Laws, and the Constitution grant the police the authority to enforce all laws in Nigeria, including those related to third-party insurance. As the lead agency in internal security, the police play a crucial role in ensuring that motorists comply with these laws, which are fundamental to road safety and providing compensation for accident victims. Together, these legal instruments create a comprehensive system for enforcing third-party insurance in Nigeria, ensuring that the financial responsibility for accidents is properly addressed, protecting the rights of accident victims, and promoting overall road safety.

    The media has been flooded with videos and images of enforcement teams carrying out stop-and-search operations, demanding evidence of compliance with the mandatory third-party insurance requirement. In many instances, vehicles without valid insurance were impounded, with their owners instructed to obtain the policy before they could retrieve their vehicles. However, the police’s involvement in this enforcement has sparked controversy, particularly among some activists who feel that the police are overstepping their bounds by taking on responsibilities that traditionally belong to the Federal Road Safety Corps (FRSC). These critics argue that the police should be focusing on more pressing security challenges rather than getting involved in traffic enforcement.

    Additionally, there have been accusations that police officers deployed for the mission were using the opportunity to extort money, harass motorists, and demand bribes, further straining the already fragile relationship between the police and the public. Some citizens also expressed concerns that the officers may not have the proper training or tools to accurately verify insurance certificates in real time, potentially rendering the enforcement ineffective.

    Despite these concerns, the enforcement exercise has largely proceeded without major issues. While there were some isolated incidents of misconduct and overzealousness—especially in states like Enugu and Akwa Ibom—the operation has generally been smooth. To quell fears of a potential rivalry between the police and the FRSC, Police Spokesman ACP Olumuyiwa Adejobi addressed these concerns, stating that both agencies were not in competition but were, in fact, working together toward a common goal. This collaboration, he assured, would ensure that the enforcement of third-party insurance is carried out effectively, contributing to improved road safety and better protection for accident victims.

    “Not at all. They will rather work with the police on the enforcement.  The law specifically empowers the police on the enforcement. The Police Act, Constitution and Traffic Laws also give the police such powers. The police have wide and enormous duties generally, that is why it is called the lead agency in internal security,” Adejobi said.

    On the issue of extortion, harassment and corruption, Adejobi said the enforcement teams had already been warned to eschew such practices, embrace professionalism and ethical law enforcement practices, which they have complied with to a large extent. Asked who enforces compliance on the part of the insurance companies notorious for always saying away from paying claims, Adejobi said that is the responsibility of NAICOM. “We can hold NAICOM accountable. We should not forget that we have a commission in charge of other processes not the NPF. The only thing the police can do is to make sure you have your police report when and where necessary.”

    Prospects and recommendations for effective enforcement

    To address the ongoing issue of fake insurance policies, experts suggest that the police integrate their enforcement efforts with the Nigerian Insurance Industry Database (NIID). This integration would enable real-time verification of insurance certificates, reducing the reliance on paper documents that are easily forged. By leveraging modern technology, this move could significantly enhance the integrity of the enforcement process and help ensure that only legitimate insurance policies are in circulation.

    There is also a strong call for collaboration between NAICOM, the FRSC, and the police to launch a nationwide public awareness campaign about the importance and benefits of third-party insurance. This education campaign would help motorists better understand the value of insurance, not just as a legal requirement, but as a critical safety net for themselves and others on the road. Increased awareness could also reduce resistance to compliance and increase overall insurance coverage among motorists.

    To avoid duplication of efforts and potential conflicts between agencies, experts recommend the establishment of a clear framework that defines the specific roles and responsibilities of the police, FRSC, Vehicle Inspection Officers (VIO), and NAICOM in enforcing third-party insurance regulations. This would ensure coordinated and efficient enforcement, eliminating overlaps and confusion in the execution of duties. Furthermore, it is essential that the police authorities implement strict anti-corruption measures to prevent officers from abusing their enforcement powers. Ensuring that the enforcement process is free from bribery and harassment is crucial to maintaining public trust. Transparent procedures should also be put in place to allow motorists to easily challenge any wrongful actions or unfair treatment by enforcement officers.

    Finally, to address the root cause of the widespread sale of fake policies, it is recommended that the government and NAICOM work closely with insurance companies to ensure that third-party insurance remains both affordable and accessible to the general public. By making genuine insurance policies more affordable, the incentive for motorists to purchase fake policies from roadside vendors would be significantly reduced. Incorporating these recommendations could lead to a more effective and transparent enforcement of third-party insurance laws in Nigeria, ultimately improving road safety and ensuring that accident victims receive the compensation they deserve.

    Sharing her views on the matter, Bola Odukale, the Director General of the National Insurers Association (NIA), expressed her support for the enforcement of third-party insurance, calling it a welcome development. She highlighted that the initiative represents a renewed hope in ensuring vehicle owners comply with the required insurance standards, ultimately protecting both themselves and other road users. Odukale emphasised the importance of the policy, stating, “It will protect accident victims against the costs of recovering from an accident that someone else, such as another driver, has caused and make compensation available for innocent victims.” Her statement underscores the significant role third-party insurance plays in providing financial security for those who suffer from road traffic accidents, ensuring they are not left to bear the burden of costs and injuries caused by others.

    Odukale listed low public awareness/limited understanding of insurance benefits; difficulty in reaching rural areas and underserved communities with insurance products; cultural and religious factors; perception of financial burden; fragmentation of the market and inadequate access to information technology as significant obstacles with getting the people to embrace insurance culture. “Some Nigerians view insurance as contradicting their cultural or religious practices, leading to resistance to adopting insurance as a financial instrument. Many Nigerians perceive insurance as an additional financial burden rather than a protective measure. With limited disposable income and numerous financial priorities, insurance is often considered a luxury rather than a necessity. Other issues include inadequate access to information technology, high inflation, security concerns, and persistent unemployment,” she said.

    Odukale recommended the expansion of distribution channels, adding that agent networks, microfinance institutions and retail outlets should be utilized to reach rural areas. “Leverage digital platforms for online policy purchase and customer service and claims processing. Partner with government agencies, cooperative societies and trade unions to reach the informal sector. Build trust and confidence. Improve customer service and complaints. resolution mechanisms. Collaborate with regulatory bodies to enforce consumer protection standards

    “Lagos is often called a pacesetter because it sets an example for other states in Nigeria in many areas, including Automatic Number Plate Recognition (ANPR) Camera and every state should embrace such technology. Please note that all over the world, deployment of law enforcement agents and technology are best solution to enforcement of compulsory insurances

    “Enforcement agencies in Nigeria are important because they protect citizens, maintain law and order, and prevent and detect crime. The Nigeria Police Force (NPF) serves as the primary law enforcement agency in Nigeria, responsible for maintaining law and order, preventing and detecting crime, and ensuring the safety and security of citizens.

    “Third-party insurance is quite popular in car insurance purchases because it is legally mandatory. However, due to the extent of many myths surrounding it, many car owners fail to make educated decisions,” she said.

    To foster a culture of insurance in Nigeria, Odukale emphasised the need to improve public awareness, expand distribution channels, and build trust and confidence in the system. She pointed out that educating the public, especially young adults, about the importance of early insurance planning is crucial. Odukale also suggested implementing policy regulatory interventions to create a more robust framework for the industry. Furthermore, she highlighted the role of technology in minimising fraud, as well as the use of data-driven insights to better understand customer needs and market trends. By leveraging modern technology, insurance processes can be streamlined, fraud reduced, and the overall experience made more efficient for both insurers and consumers.

    Odukale also called for stronger inter-agency coordination, advocating for a system that is not only efficient but also transparent. She believes that such collaboration would benefit motorists, accident victims, and the broader society. Ultimately, she sees the proper enforcement of third-party insurance as aligning with the police’s mandate to maintain law and order, contributing to both road safety and internal security. By taking these steps, Nigeria can develop a system that ensures greater protection for all road users while promoting a safer, more reliable insurance landscape.     

  • ‘Tinubu setting new standards for investment promotion’

    ‘Tinubu setting new standards for investment promotion’

    Ms. Ololade Majekodunmi, Managing Director of House of Dorcas Integrated Services (HDI), is one of the few young women making a significant impact in the agriculture sector, cultivating over ten hectares of cotton across five states. With a background in fashion and sustainable textile design, alongside an MBA from the University of West London, Majekodunmi shares insights into her journey, the Tinubu administration’s recent cotton initiative, the industry’s potential and many more. ADEKUNLE  YUSUF highlights key excerpts from their conversation:

    Nigeria’s business environment and the fate of agro-allied business

    As a Nigeria economy advocate, I choose to see the potential and the progress. Nigeria’s business environment has significantly improved under this administration, with a clear focus on economic diversification, infrastructure development and policy reforms. The 2025 Roadmap has set a strong foundation for ease of doing business, digital transformation, and investment incentives. We are seeing greater engagement, policy direction, and government support for key industries, particularly agriculture, manufacturing and energy. Challenges remain, but the commitment to reform and growth is evident. If reforms are properly executed, Nigeria’s economy will rank among the best in the world. The rest of the world sees the immense potential we often overlook, and it is time we harness it fully.

    Additionally, the increased adoption of digital technology and fintech solutions has made access to funding and financial transactions easier for businesses. Nigeria’s participation in the African Growth and Opportunity Act (AGOA) and the African Continental Free Trade Agreement (AfCFTA) also opens new doors for cross-border trade, positioning the country as a major player in Africa’s economic development. Strengthening these international trade frameworks will allow Nigeria’s cotton industry to gain global market access, attracting investors looking to tap into Africa’s textile sector.As an organisation, we focus on strategic partnerships, policy advocacy and operational efficiency. We keep ourselves updated on everything happening in Nigeria and adapt our systems and solutions to fit. Navigating Nigeria’s business climate requires adaptability, innovation and resilience. We have leveraged technology, built strong networks, and engaged stakeholders at both government and private sector levels to mitigate risks and maximize opportunities.

    Read Also: Tinubu to Nigerians: I understand your challenges, reforms crucial

    The agro-allied sector is experiencing renewed confidence due to the government’s agriculture-driven economic policies. With policies supporting local production, mechanisation and access to finance, there is a strong push toward industrial-scale agriculture and value addition. This has resulted in increased investments, job creation, and a more structured market. However, for sustained growth, public-private partnerships (PPPs) should be encouraged to drive further investments and research into modern farming techniques.

    How to harness the vast potential of Nigeria’s cotton industry

    Nigeria grows long-staple cotton, premium variety known for its superior fibre quality, as a diverse producer of raw materials for various textile applications. This diversity allows Nigeria to cater to both domestic and international markets, contributing to industries such as well as medium and short-staple cotton, making it a diverse producer of raw materials for various textile application. This diversity allows Nigeria to cater to both domestic and international markets, contributing to industries such as textile, home furnishing and industrial fabrics. Developing and taking advantage of the vast land mass in states like Kastina, Kebbi, Gombe, Niger, and Kano, where cotton farming thrives will be crucial in expanding production. Additionally, some parts of south with loamy soil offer favorable condition for cultivation of high-quality cotton varieties, further strengthening the country’s production capacity However, due to an underutilised industry, Nigeria loses an estimated $6 billion annually, relying on textile imports despite having the resources for local production. A well-developed cotton industry could contribute over $10 billion annually to the economy, significantly reducing import dependency and boosting exports. Beyond fabric production, cotton contributes to several industries, including cotton seed oil for food and cosmetics, biofuel production and animal feed, making it a critical commodity for industrial growth and sustainability. With fertile land, favourable weather and a large labour force, Nigeria can establish itself as a global leader in high quality cotton production, if backed by the right policies, investment and infrastructure. The sector also has the potential to create over 2 million jobs across the value chain, from farming to textile processing, fashion manufacturing and exports. Engaging youth and women in cotton farming, modern textile production, and innovative fashion businesses will further drive economic empowerment and industrial development. Historically, Nigeria was once a key player in the global cotton export market, but years of underinvestment and policy inconsistencies have hindered progress. However, with a renewed focus on sustainable cotton farming, advanced processing technologies and international trade alignment, Nigeria has the potential to reclaim its place on the world stage.

    The government has initiated several programmees aimed at revitalising the cotton and textile industry, such as the Anchor Borrowers’ Programes (ABP), the Central Bank of Nigeria’s (CBN) intervention in the Cotton, Textile, and Garment (CTG) sector, and the National Cotton Development Programmes. These initiatives have helped increase local cotton production, create employment, and promote industrialisation. The federal government’s renewed focus, particularly through the Ministry of Trade and Investment, on the urgent call to revamp the cotton and textile industry is both promising and reassuring. Their approach demonstrates a commitment to revitalising this critical sector, ensuring that Nigeria regains its competitive edge in the global textile market. However, funding models must be structured in a way that ensures efficiency and accountability. Special grants, tax incentives, and dedicated agro-industrial funds can further enhance the cotton sector’s growth. Additionally, investments in mechanisation and modern processing plants will significantly improve productivity.

    The government has the potential to make substantial progress if implementation is well structured. However, success will depend on stakeholder engagement, proper funding mechanisms, and removing bureaucratic obstacles. Execution of the initiative is key—it must be properly implemented to yield real impact. This includes modern irrigation systems, structured farmer support, and investment in high-quality ginning technology. A key component of this modernisation is investing in double roller gins, which preserve fibre strength and improve quality, ensuring that Nigerian cotton remains competitive in premium global markets. When combined with improved soil management, better seed varieties and sustainable farming practices, these investments will significantly enhance output and economic returns. Uzbekistan, which faced similar challenges in its cotton industry, successfully transformed its sector through government-backed reforms, mechanisation and strong export policies. The country attracted $130 million in investment from the IFC and EBRD, which modernised farming and processing systems. This contributed to a 4.5% annual growth in cotton fabric exports, demonstrating how structured investment and reform can unlock long-term economic gains. Furthermore, developing dedicated industrial zones for cotton processing, modernising transport networks for logistics efficiency, and investing in state-of-the-art storage facilities will further strengthen Nigeria’s competitiveness in the cotton-to-textile value chain.

    A well-developed cotton industry will have a ripple effect on the agro-allied sector by boosting textile production, increasing demand for agricultural inputs, and strengthening rural economies. It will also create opportunities for mechanization, value addition, and job creation across the supply chain. Cotton expansion will directly impact other agro-industries such as oil processing, feed mills, and bioproduct manufacturing, strengthening Nigeria’s position as an agricultural powerhouse.

    Brazil’s transformation in the cotton sector is a powerful example of how strategic investment and policy support can drive industrial growth. Over the past two decades, Brazil has expanded production from approximately 3 million bales to 14.6 million bales, making it the second-largest exporter of cotton globally. This success was fueled by government – backed incentives, modernised farming techniques and an efficient logistics system that ensured seamless processing and exports. With a strong emphasis on research, mechanisation and sustainability, Brazil has positioned itself as a major player in the global textile market. Nigeria possesses similar agricultural potential and can achieve comparable success by prioritising investment-friendly policies, infrastructure development and trade incentives. A well-integrated cotton-to-textile value chain, backed by sustainable farming practices and advanced processing technology, would attract global investors seeking emerging markets. With the right execution, Nigeria can position itself as a leading supplier of high-quality cotton and textiles, meeting the growing demand across Europe, Asia, and North America. However, for Nigeria to achieve this, critical enablers must be in place. Investors look for stability, security and clear investment frameworks. Addressing power supply challenges, improving ease of doing business and ensuring policy consistency will be key to attracting foreign direct investment into the agriculture, textile, and manufacturing sectors. Additionally, the development of the CTG Free Trade Zone in Funtua is a strategic move to boost cotton processing and textile manufacturing, offering a dedicated industrial space with favourable policies and infrastructure. This initiative will drive value addition, job creation, and export expansion, positioning Nigeria as a key player in the global textile market. The roadmap 2025 initiative is a strong starting point, providing a framework for boosting investor confidence and ensuring sustainable industrialisation.

    Making investment climate attractive to Nigerians in the diaspora

    Nigerians in the diaspora want to invest, but they need trust in the system. Issues like policy inconsistency, infrastructure deficits, and capital repatriation challenges discourage many investors. However, the outlook is getting better, and economic forecasts indicate a favourable trend for investment, particularly as government policies continue to evolve towards greater transparency and investor confidence. If the government strengthens institutional frameworks, provides investment guarantees and fosters transparency, diaspora investments will increase significantly. There are already successful Nigerian diaspora investors in agriculture and agro processing, demonstrating that investing in Nigeria’s agricultural sector can yield significant returns. The International Finance Corporation (IFC) has also backed several Nigerian agro businesses, signaling strong confidence in the country’s agricultural potential. However, targeted incentives such as tax breaks, land access, and investment protection schemes will further encourage diaspora Nigerians to channel their capital into the cotton and textile industries.

    If given the opportunity to work with the government, we are ready to take immediate action with structured solutions that will drive measurable impact within the first year. Our plan is SMART covering everything from cotton production to processing. We are excited about the revamp initiatives and the Road 2025 Roadmap. Having worked on this for almost 10 years, we can confidently say that we have the solutions to make this sector work. We are ready to hit the ground running and show results within the first year.

    Within the first year, we anticipate a measurable increase in cotton yield and processing output, supported by improved logistics and stakeholder coordination. The Brazilian technical team has also shown commitment to supporting Nigeria’s cotton revitalisation through capacity building, research collaborations and mechanisation strategies. This international partnership further strengthens our execution capacity. Their expertise in large-scale cotton farming and sustainable fiber production will be instrumental in advancing Nigeria’s cotton value chain. We are fully prepared. We have the expertise, partnerships, and industry knowledge to drive the success of the initiative. However, for this to be effective, there must be a genuine commitment from the government as we can see now through the released roadmap to ensure proper infrastructure and eliminate bureaucratic roadblocks.

    Nigeria has unlimited potential, and this administration’s pro-business stance, commitment to economic transformation and the Road 2025 initiative have created a more favourable investment climate. Achieving sustainable growth in the cotton and textile sector will require multi-stakeholder collaboration, including government bodies, private sector partners and international investors. By prioritising infrastructure development, funding accessibility, and policy consistency, Nigeria will solidify its position as an economic powerhouse. If we continue strategic partnerships, sound policymaking, and transparent governance, Nigeria will become a leading economic hub in Africa and one of the strongest economies in the world.

  • CBN, MPC’s sustained fight against inflation yields positive results

    CBN, MPC’s sustained fight against inflation yields positive results

    Inflation in Nigeria is expected to continue its downward trajectory in 2025 as the impact of the Central Bank of Nigeria (CBN) reforms continue to drive growth and economic development. Already, Nigeria’s annual inflation rate dropped to 24.48 percent in January, reflecting the positive outcomes of several policy measures implemented by the CBN-led Monetary Policy Committee (MPC). For instance, the MPC decided to pause its policy rate tightening cycle during the first meeting of the year, marking the first pause since May 2022. This decision is part of the CBN’s broader policy strategy to maintain a positive inflation outlook and sustain the naira’s rally across markets, reports Assistant Editor, Collins Nweze.

    The Nigerian economy is well-positioned to achieve price stability within the year, supported by the stabilisation of exchange rates, the normalisation of energy prices following subsidy removal, and improved liquidity in the forex market. In its 2025 macroeconomic outlook, Comercio Partners highlighted that the rebasing of Nigeria’s Consumer Price Index (CPI) to 2024 would introduce statistical effects that could result in a decrease in inflation figures.

    Additionally, Comercio Partners underscored the importance of expanding local refining capacity, particularly with the launch of the Dangote Refinery. This development is expected to mitigate the impact of exchange rate fluctuations on energy prices. By increasing reliance on domestically refined petroleum, Nigeria is likely to experience reduced energy price volatility.

    This, coupled with a more stable exchange rate, is expected to reduce production and transportation costs, triggering a positive ripple effect across the broader economy. According to Ifeanyi Ubah, Head of Investment Research and Global Macro Strategist, remarked, “We expect headline inflation will decrease to around 15 percent in the first half of 2025, indicating a gradual return to economic stability.”

    The report also highlighted the critical need for expanding local refining capacity, especially with the upcoming launch of the Dangote Refinery. This development is expected to lessen the impact of exchange rate fluctuations on energy prices. With increased reliance on domestically refined petroleum, Nigeria is likely to experience a reduction in energy price volatility. Combined with a more stable exchange rate, this is expected to lower production and transportation costs, triggering a positive ripple effect throughout the broader economy.

    MPC steps in

    The need to tame inflation and sustain exchange rate stability were key factors influencing the Monetary Policy Committee’s (MPC) decision to keep rates unchanged at its 299th meeting held last week in Abuja. As a result, the Committee voted to maintain the Monetary Policy Rate (MPR) at 27.50 percent and kept all other parameters unchanged. This includes the Cash Reserve Requirement (CRR) for Deposit Money Banks (DMBs) and Merchant Banks at 50 percent and 16 percent, respectively; the asymmetric corridor around the MPR at +500bps/-100bps; and the liquidity ratio at 30 percent.

    According to the National Bureau of Statistics (NBS), Nigeria’s annual inflation rate stood at 24.48 percent in January, reflecting a notable decline from the previous month’s figure. This decrease followed the first rebasing of Nigeria’s Consumer Price Index (CPI) in more than a decade.

    CBN Governor Olayemi Cardoso said the apex bank is now more than ever, consolidating market gains and ensuring sustained improvement is crucial. “We will enhance collaboration with the fiscal sector by increasing the depth and regularity of our interactions to drive economic growth. With stabilising forex rates, strengthened price controls, and rising investor confidence, the economy shows strong signs of resilience and recovery,” he said.

    Cardoso explained that ⁠following positive developments in the FX market, the CBN’s focus on boosting liquidity and maintaining transparency in forex operations is sacrosanct. “Our Objectives have been and will continue to be, to achieve stability in the Foreign Exchange and the Financial markets. CBN will continue to embrace orthodoxy and stay the course. We remain vigilant and will not take anything for granted, inflation has been too high for too long, and our goal is to bring it down from double digits to single digits in the medium to long term,” he said.

    On February 20, the naira strengthened by 6.95 per cent to N1,510/$ in the parallel market, driven by positive exchange rate expectations, subdued forex demand, and continued intervention by the Central Bank of Nigeria (CBN). Businesses, particularly those in the real sector, welcomed the MPC’s decision to hold rates, viewing it as a step toward sustaining the naira’s rally and alleviating the rising cost of borrowing. These decisions were based on the Committee’s expectation of robust GDP growth in the medium term, fueled by strong contributions from the non-oil sector. Furthermore, the MPC highlighted the sustained rise in domestic crude oil production (1.74 mb/d) and anticipates an improved contribution from the oil sector, further bolstering overall GDP growth.

    The MPC acknowledged the recent rebasing of the Consumer Price Index (CPI) and the adjustments made to the weights of items in the CPI basket, noting that the new methodology more accurately reflects current consumption patterns. The Committee also anticipates a moderation in inflationary pressures in the near term, supported by a relatively stable naira and a gradual easing of PMS prices.

    Furthermore, the MPC highlighted the recent appreciation of the naira, which has been buoyed by improved forex liquidity. The Committee also recognised the CBN’s ongoing efforts to promote transparency and credibility in the foreign exchange market. These efforts include the implementation of the Electronic Foreign Exchange System (EFEMS) and the Nigerian Foreign Exchange Market (NFEM) FX Code.

    The Committee anticipates that sustained policy initiatives will bolster Foreign Direct and Portfolio investments, as investor confidence continues to rise. Additionally, the MPC emphasized that increased domestic crude oil production is expected to improve the current account balance and support the growth of FX reserves. On the global front, the Committee noted that while the Russia-Ukraine war and ongoing Middle Eastern conflicts pose downside risks to global GDP, potential resolutions could emerge through policy actions by the new US administration. The Committee also identified the risk of a possible global trade war triggered by US tariff hikes, which could heighten inflationary pressures and dampen global growth. Despite these risks, the MPC highlighted that the International Monetary Fund (IMF) has maintained its global GDP growth forecast at 3.3 percent for both 2025 and 2026.

    Looking ahead, analysts at Cordros Securities expect future MPC decisions to be largely driven by developments in the foreign exchange market and the trajectory of inflation. They noted, “While a potential rate cut could be considered at the May policy meeting, we anticipate a gradual approach aimed at balancing exchange rate stability with the expected disinflationary process,” as stated in their emailed notes to investors.

    Analysts also observed that, ahead of the MPC meeting, market participants had already started repricing yields downward, despite the tight liquidity conditions in the financial system. The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, stated that the global and domestic economic landscape is rapidly evolving, and Nigeria’s policymakers are navigating treacherous waters. He emphasized that balancing risks is a delicate task—tighten too much, and growth could be stifled; ease too soon, and inflation could spiral out of control.

    “In its first meeting in 2025, held on February 19-20, the Monetary Policy Committee (MPC) finally hit the pause button on interest rate hikes after 12 months of an aggressive tightening campaign. The restrictive stance saw the policy rate peak at 27.5 per cent per annum, pushing maximum lending rates above 30 per cent per annum. Markets perceive this move as the beginning of a more accommodating stance as the yield curve inverted, especially at the short end following the rate decision,” he said.

    The decline in the inflation rate, largely driven by the rebasing of the Consumer Price Index (CPI), indicated that the MPC’s decision to hold rates was in line with expectations, although further moderation in yields remains possible. Commenting on the MPC’s decision, Charles Abuede, the Head of Research at Cowry Asset Management Limited, noted that the MPC is proceeding cautiously. He added that market expectations were for the MPC to increase the MPR by 25 basis points to align with broader market sentiments, driven by the need to address rising inflation, which has become entrenched in the economy.

    “The committee should remain focused on maintaining price stability, especially as inflationary pressures persist despite previous rate hikes.” Abuede said a lower inflation print is prompting the MPC to prioritise economic growth over further tightening, particularly as other macroeconomic indicators suggest easing cost pressures.

    Also weighing in, Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, stated that the MPC is gradually relaxing its monetary policy tightening. He acknowledged the Central Bank’s historically strict stance but emphasised that the current economic realities necessitated holding rates steady. Yusuf also agreed that there has been some stability in the exchange rate, noting that, given the current situation, there is already an excess of monetary policy tightening tools in play.

    He said: “Monetary Policy Rate (MPR) were already at around 27.5 per cent and the Cash Reserve Requirement (CRR) is already at 50 per cent, which are practically the limits that monetary policy can be pushed for now. Interest rate now for many businesses is over 35 per cent, and it should not get worse than that.

    “We need to tackle food inflation which is a major factor in our current inflation. So, we need to do a lot more in the area of development finance, why the CBN continues to pursue is the orthodox monitoring policy,” he stated.

    Analysts from the Nigeria Economic Summit Group noted that the easing of inflation is expected to play a significant role in shaping monetary policy decisions. They forecast that the CBN’s Monetary Policy Committee (MPC) may adopt a more accommodative stance in late 2025, potentially lowering interest rates to stimulate economic activity. This shift would represent a departure from the previous tight monetary policy regime that focused primarily on controlling inflation.

    Battle against inflation thickens

    The battle against inflation is intensifying, as policymakers face mounting challenges in managing the delicate balance between curbing inflation and supporting economic growth. The CBN policies, including the unification of the exchange rate, have resulted in significant foreign capital inflows, reducing the bank’s intervention in the forex market. The floatation of the naira, along with the clearing of over $7 billion in FX backlog, has improved the country’s outlook with foreign investors. Multilateral organizations like the World Bank have described these actions as bold interventions aimed at enhancing the economy’s long-term sustainability.

    Upon assuming office, CBN Governor Cardoso highlighted that rebuilding Nigeria’s economic buffers and strengthening resilience were top priorities for his leadership. Prior to his appointment, inflation had surged to 27 per cent, largely driven by excessive money supply growth. Over the previous eight years, GDP growth had stagnated at a modest 1.8 percent, while money supply grew rapidly, averaging around 13 per cent annually. This imbalance not only fuelled inflation but also contributed to a significant depreciation of the naira. Governor Cardoso explained that inflation creates uncertainty for both households and businesses, functioning as a silent tax that erodes purchasing power and drives up the cost of living.

    The nation was also facing a fiscal crisis, marked by unsustainable deficit financing through the Central Bank’s Ways and Means advances, which had ballooned to an unprecedented N22.7 trillion by 2023—roughly 11 percent of the GDP. Additionally, quasi-fiscal interventions by the CBN, totaling over N10 trillion, further undermined market confidence and weakened the effectiveness of its policy tools.

    Against these challenges, the Central Bank of Nigeria (CBN) under Governor Cardoso has sparked renewed optimism in the management of the financial system and the broader economy. The current macroeconomic stabilisation efforts are enhancing Nigeria’s ability to attract foreign investors to its markets. For example, by the end of 2024, Nigeria was able to leverage its improved economic fundamentals to re-enter the Eurobond market, aiming to address its fiscal deficit. This marked the country’s return to the international debt market in November after a two-year hiatus. In a dual-tranche Eurobond issuance, investor demand soared, with subscriptions surpassing $9 billion.

    The high-interest rate environment also drew increased foreign portfolio investment, with inflows reaching $3.48 billion in the first half of 2024, compared to just $756.1 million in the same period of 2023. This upward trend signals growing investor confidence in Nigeria’s ability to manage its external debt burden, providing a positive outlook for the country’s Eurobonds.

    Inflation targeting framework in the works

    The fight against inflation has intensified with the planned adoption of an inflation targeting framework by the CBN to enhance price management. This framework, which has been successfully implemented by central banks in several African countries, is expected to strengthen Nigerians’ purchasing power, increase disposable income, drive aggregate demand, and stimulate production.

    Read Also: CBN, EDC partner to transform cooperative societies

    The effects of rising inflation are being felt by households and businesses throughout the country, making price stability a core mandate of the CBN. In response, the CBN is working towards adopting and implementing the inflation targeting framework, which will replace the current exchange rate targeting framework. This shift is expected to be implemented with strong public support.

    In its efforts to tackle inflation, the CBN recently hosted the Monetary Policy Forum 2025, bringing together fiscal authorities, legislators, the private sector, development partners, subject-matter experts, and scholars. The forum, centered on the theme “Managing the Disinflation Process,” served as a platform for collaborative discussions on strategies to curb inflation and stabilize the economy.

    The forum represents a significant push to enhance monetary policy communication, promote dialogue, and foster collaboration on key issues shaping monetary policy. During the event, Governor Cardoso outlined the CBN’s primary focus on sustaining price stability, transitioning to an inflation-targeting framework, and implementing strategies to restore purchasing power and alleviate economic hardship. He emphasised that the apex bank is maintaining its disciplined approach to monetary policy, with the goal of curbing inflation and stabilising the economy in the face of ongoing challenges.

    “These actions have yielded measurable progress: relative stability in the FX market, narrowing exchange rate disparities, and a rise in external reserves to over $40 billion as of December 2024.”

    Cardoso reiterated that the goal of the CBN is to ensure that monetary policy remains forward-looking, adaptive, and resilient. In addressing our economic challenges, collaboration is key: “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence,” Cardoso said.

    “Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” he added.

    The CBN has also placed a strong emphasis on strengthening the banking sector by introducing new minimum capital requirements for banks, effective March 2026. This move aims to ensure the resilience of the sector and position Nigeria’s banking industry for a $1 trillion economy. This week, the CBN took another significant step forward with the launch of the Nigeria Foreign Exchange Code, which is designed to promote integrity, fairness, transparency, and efficiency in the FX market. Built on six core principles, the code represents a binding commitment from the financial community to rebuild trust and inspire confidence in the market.

    In addition, the CBN continues to prioritize financial inclusion. The Women Entrepreneurs Finance (We-FI) initiative, part of the National Financial Inclusion Strategy, is actively working to bridge the gender gap by ensuring that more women have access to financial services and digital tools, helping to empower women economically.

    Remittances through International Money Transfer Operators (IMTOs) rose by 79.4 percent to US$4.18 billion in the first three quarters of 2024, underscoring the positive impact of the foreign exchange reforms. Additionally, the CBN lifted the 2015 restriction barring 41 items from accessing FX at the official market, aiming to enhance trade and investment. These reforms and developments reflect the CBN’s commitment to creating an enabling environment for inclusive economic growth. However, achieving long-term macroeconomic stability requires sustained vigilance and a proactive stance on monetary policy.

    “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Governor Cardoso stated. He also highlighted that the move from the exchange rate targeting framework to the inflation-targeting framework aligns with the CBN’s determination to control inflation surges in line with its mandate of maintaining price stability. Inflation continues to be a major concern for the CBN, and the current environment calls for the effective use of monetary policy tools to manage it.

  • Our Scorecard In Blue And Marine Economy, By Oyetola

    Our Scorecard In Blue And Marine Economy, By Oyetola

    Nigeria is at the cusp of an economic transformation through its Blue Economy, leveraging its vast maritime resources. With a coastline stretching over 853 kilometres and an expansive Exclusive Economic Zone, the country is primed to tap into the potential of industries such as shipping, fisheries and renewable energy to drive growth, create jobs and foster sustainability, reports Associate Editor ADEKUNLE YUSUF

    As one of the world’s largest maritime nations, Nigeria finds itself at the threshold of a significant economic shift—one propelled by the Blue Economy. With an abundance of natural resources, particularly in the marine space, Nigeria is presented with an incredible opportunity to diversify its economy, drive sustainable development, and improve the quality of life for its citizens. Through its extensive coastline along the Atlantic Ocean, vast inland waterways, and untapped marine resources, Nigeria has the potential to become a global leader in the Blue Economy sector. If effectively harnessed, these resources have the power to diversify the national economy, generate employment, and promote sustainable development. This vision was articulated by Adegboyega Oyetola, Minister of Marine and Blue Economy, during a media engagement in Lagos last week.

    Under the leadership of President Bola Ahmed Tinubu, Nigeria is taking important steps toward realising the full potential of its marine economy. According to Oyetola, the creation of the Ministry of Marine and Blue Economy reflects the government’s unwavering commitment to establishing Nigeria as a global maritime force. This ministry’s role is to develop and oversee policies that will ensure the responsible use of Nigeria’s marine resources, leveraging them for economic prosperity and environmental sustainability. This strategic move offers Nigeria a unique opportunity to tap into industries such as shipping, fisheries, offshore oil and gas exploration, and renewable energy, all of which are crucial to ensuring the nation’s long-term economic resilience.

    After unveiling the federal government’s vision for the sector, Oyetola then delved into the nation’s proactive measures to build a sustainable blue economy, outlining both the progress made and the challenges faced along the way. He highlighted the regulatory reforms, robust policies, and achievements that have already been realised, emphasising the significant contributions of key stakeholders in these areas. In doing so, Oyetola painted a vivid and optimistic picture of Nigeria’s dynamic maritime landscape, emphasising the immense potential for growth and transformation in the coming years. With such a comprehensive approach, he said he is optimistic that Nigeria is on track to fully capitalise on its maritime resources, forging a future that is both prosperous and sustainable for all.

    Nigeria’s maritime wealth as a foundation for sustainable growth

    The Blue Economy encompasses a wide range of industries and activities that depend on the oceans, seas, and marine resources. In Nigeria, the maritime industry presents opportunities in shipping, fisheries, oil and gas, marine biotechnology, and tourism. This sector’s immense potential has not gone unnoticed. According to the Minister of Marine and Blue Economy, “Nigeria’s maritime sector has the potential to contribute over $100 billion annually to the national GDP if fully developed.”

    With a coastline bordering the Atlantic Ocean and a vast inland waterway system, Nigeria is uniquely positioned to benefit from the untapped opportunities within its waters. The nation’s Exclusive Economic Zone (EEZ) provides vast prospects for offshore exploration, particularly in oil and gas, which has long been the backbone of Nigeria’s economy. Additionally, the fisheries sector, which accounts for a significant portion of the country’s food supply, holds vast untapped potential. By improving fisheries management and boosting aquaculture, Oyetola said Nigeria can reduce its dependency on fish imports and contribute significantly to regional food security.

    Nigeria is blessed with an extraordinary range of marine resources, both on land and beneath the sea. The nation’s coastline, stretching over 853 kilometres along the Atlantic Ocean, is just the beginning. Nigeria’s Exclusive Economic Zone (EEZ), which covers more than 300,000 square kilometres, offers enormous potential for economic growth through sectors like shipping, fishing, offshore oil, and gas exploration, and marine biotechnology. Oyetola disclosed that the fisheries subsector alone has the potential to significantly reduce the country’s dependence on fish imports, create employment, and bolster food security. Nigeria’s inland waterways also provide vital trade routes that connect various parts of the country, supporting regional economic integration, he said. These water systems are key to ensuring more efficient transportation of goods and services, contributing to the nation’s logistical capabilities.

    The Minister explained the Blue Economy, in its broadest sense, includes all activities related to the oceans and seas, such as shipping, tourism, renewable energy, and fisheries. However, it also covers emerging sectors like marine biotechnology, desalination of seawater, and seabed mining. The combination of these resources and industries places Nigeria in a prime position to tap into an expanding global market that values sustainability, innovation, and ocean-based economies. The government’s vision for the Blue Economy, he said, is both ambitious and essential for the nation’s long-term economic prosperity. Under the current administration, there has been an emphasis on tapping into the economic potential of the nation’s maritime resources while ensuring that environmental sustainability is maintained.

    A core element of this vision is the diversification of Nigeria’s economy. The government has recognised the limitations of an oil-dependent economy and understands that the Blue Economy can provide an alternative source of revenue generation and job creation. The creation of the Ministry of Marine and Blue Economy was a strategic move to focus on harnessing these maritime opportunities, ensuring that policies are aligned with national and global objectives of sustainable development. According to Oyetola, this focus on the Blue Economy aligns with Africa’s Agenda 2063 and the United Nations’ Sustainable Development Goals (SDGs), especially those focused on the sustainable use of ocean resources. The overarching goal is to position Nigeria as a leading maritime and marine economy, with an emphasis on sustainability, inclusivity, and job creation across different segments of the population.

    As stated by the President in his inaugural address, “Our government will prioritise the sustainable use of Nigeria’s maritime resources to foster long-term economic growth, job creation, and environmental conservation.” This strategic focus also aligns with global frameworks, such as the United Nations Sustainable Development Goals (SDGs) and Africa’s Agenda 2063. The newly established ministry has outlined a ten-year roadmap to facilitate the integration of maritime sectors into the national economy. This roadmap focuses on creating more efficient infrastructure, boosting security, and aligning policies to make Nigeria a global leader in the Blue Economy. As articulated by Minister: “Our vision is to build a robust Blue Economy framework that delivers prosperity to the people while preserving the marine environment for future generations.”

    Although the Blue Economy presents vast opportunities, it is not without challenges. Nigeria’s maritime sector has long been plagued by poor infrastructure, outdated regulatory frameworks, and security concerns. However, the establishment of the Ministry of Marine and Blue Economy has been instrumental in addressing some of these issues, leading to notable progress. Oyetola said regulatory reforms have been a priority for the government, particularly with regard to the efficiency of port operations and the ease of doing business within the maritime sector. He added that efforts have been made to streamline the regulatory processes at the nation’s ports, ensuring better coordination between various agencies and private sector players.

    In addition to regulatory reforms, the Minister explained further that the government has invested in modernising Nigeria’s ports infrastructure. This includes plans for upgrading both the Eastern and Western ports, improving port connectivity, and increasing capacity for handling larger vessels. The completion of these projects is expected to enhance Nigeria’s position as a logistics hub in West Africa, attracting more investment and boosting economic activity. Nigeria’s maritime security has also seen notable improvements, with initiatives such as the Deep Blue Sea Project and the Falcon Eye surveillance system playing a critical role in reducing piracy and illegal activities in the Gulf of Guinea. These efforts have bolstered confidence in Nigeria’s maritime industry, making the country a more attractive destination for international trade and investment.

    Furthermore, Oyetola boasted that the Nigerian government has made strides in strengthening its maritime security capabilities, working closely with international partners to ensure the safety of its shipping lanes and offshore resources. This renewed focus on maritime security has been essential in creating a stable environment for businesses to operate and thrive in the sector. He reminded stakeholders that the success of Nigeria’s Blue Economy initiative relies on the coordinated efforts of various governmental agencies and stakeholders. The Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), and the National Inland Waterways Authority (NIWA) are among the key agencies driving this transformation.

    These agencies play a critical role in implementing policies that support the growth of the maritime sector. For example, NPA’s efforts to modernise port facilities and ensure efficient port operations are vital for attracting international shipping companies and improving trade flow. Similarly, NIMASA’s regulatory oversight in ensuring safety standards and environmental protection is crucial for maintaining Nigeria’s reputation as a secure and reliable maritime nation. Additionally, the Nigerian Maritime University in Okerenkoko, Delta State, has contributed to capacity building by training future generations of maritime professionals. With a growing demand for skilled labour in the maritime industry, this institution is central to ensuring that Nigeria has the human capital necessary to succeed in the Blue Economy.

    Read Also: Fed Govt to evacuate 100,000 Nigerian refugees from other Afrcican countries

    A central pillar of Nigeria’s Blue Economy is sustainability. Oyetola disclosed that the federal government understands the need to balance economic growth with the preservation of marine ecosystems. This is especially important as Nigeria seeks to maximise the potential of its fisheries and aquaculture subsector, both of which depend heavily on healthy marine environments. Efforts to protect marine biodiversity have already been initiated, with stricter enforcement of regulations related to illegal fishing and pollution. Additionally, the government is working on establishing Marine Protected Areas (MPAs) to conserve sensitive marine ecosystems, which play a critical role in the health of ocean life and the well-being of coastal communities.

    The growth of renewable energy sources, such as offshore wind and solar energy, is another important aspect of Nigeria’s sustainable development strategy. By tapping into these resources, Nigeria aims to reduce its reliance on fossil fuels while creating new opportunities in the renewable energy sector. Sustainability also extends to Nigeria’s maritime governance, which includes international cooperation to ensure the responsible use of ocean resources. Nigeria has been active in global maritime governance forums, such as the International Maritime Organisation (IMO), where it advocates for policies that prioritise environmental protection and sustainable marine resource management.

    While much progress has been made, Nigeria’s journey toward fully realising its Blue Economy potential is far from complete. The Ministry of Marine and Blue Economy has developed a 10-year roadmap, which serves as a guide for achieving the goals outlined in the country’s Blue Economy strategy. This roadmap focuses on several key areas: infrastructure development, sectoral reforms, security, and international cooperation. As part of its plans, Nigeria aims to expand its fishing fleet, improve port facilities, and increase capacity for shipbuilding and repairs. Investments in technology and innovation will also play a crucial role in driving growth in the sector.

  • Celebrating academic excellence

    Celebrating academic excellence

    The University of Ilorin has recognised the outstanding contributions of its faculty by promoting 51 academics to the esteemed ranks of Professors and Readers – a momentous milestone that highlights the university’s dedication to fostering academic excellence, research innovation and leadership in shaping the future of higher education, reports Associate Editor ADEKUNLE YUSUF

    In what has been widely touted as a momentous celebration of intellectual achievement and dedication, the University of Ilorin, Kwara State, has elevated 51 of its distinguished faculty members to the prestigious ranks of Professors and Readers. This recognition, effective from October 1, 2024, affirms the university’s unwavering commitment to academic excellence, research innovation and professional development, while expanding horizons and shaping the future of higher education.

    The university registrar, Mr. Adeleke Alfanla, confirmed that 20 Readers were promoted to the rank of Professor, while 31 Senior Lecturers were elevated to the position of Reader. This promotion followed recommendations made by the university’s Appointments and Promotions Committee, which were presented to the Council during its meeting on Monday, January 27, 2025, by the Vice Chancellor, Prof. Wahab Egbewole (SAN). The Appointments and Promotions Committee (A&PC), at its 186th meeting on January 27, 2025, reviewed the recommendations from the 2024 promotion exercise for eligible academic staff members to be promoted to the positions of Professor and Reader.

    Among those elevated are two distinguished scholars who have reached the esteemed rank of Professor in the field of Mass Communication—Dr. Lambe Kayode Mustapha and Dr. Kehinde Kadijat Kadiri. Their recognition is not only a personal achievement but also a significant milestone for the academic community at large. It heralds a new era of excellence in scholarship, research, and innovation in Mass Communication studies, both in Nigeria and globally.

    A brilliant scholar of remarkable depth, Dr. Mustapha stands as a towering figure in the field of Mass Communication, distinguished not only by his extensive research and academic leadership but also by his deep commitment to advancing the study of media’s role in shaping societies. With over two decades of ground-breaking work, Dr. Mustapha’s career has significantly transformed the landscape of communication studies in Nigeria and beyond.

    As one of the founding academic staff members of the Department of Mass Communication at the University of Ilorin, he was one of the pioneers that helped to build a rigorous academic framework that has since become a cornerstone of excellence in the university. A distinguished scholar, Dr Mustapha earned his Bachelor’s and Master’s degrees in Mass Communication from the University of Lagos (UNILAG), followed by a Ph.D. in Communication from the International Islamic University Malaysia (IIUM). Further solidifying his scholarly expertise, he completed a Post-Doctoral Fellowship at the esteemed School of Communication, Universiti Sains Malaysia. These qualifications, paired with his wealth of experience, have firmly established him as an expert of exceptional depth and insight.

    Dr. Mustapha’s research is deeply rooted in the intricate relationship between media and society, exploring how communication shapes cultural, political, and social dynamics. His primary areas of focus include Political Communication, Media Effects, and the evolving landscape of New and Social Media. His work has tackled pressing issues such as the role of media in political participation, the spread of misinformation, and the influence of media on public health policies. One of his hallmark studies explored the role of social media in influencing political behaviour among Nigerian youths, while his investigation into the role of conspiracy theories in shaping public health policy during the COVID-19 pandemic was ground-breaking. His impactful research has been widely published in renowned journals, including the Romanian Journal of Communication and Public Relations, World of Media, and the Journal of African Media Studies.

    Beyond his ground-breaking research, Dr. Mustapha has earned a reputation as a visionary educator, shaping the minds of future media professionals. His teaching philosophy transcends the transmission of knowledge; it fosters critical thinking, intellectual curiosity, and ethical responsibility. He has mentored a generation of students who are not merely passive recipients of information, but active creators and analysts of media content. His students often attest to his ability to ignite their intellectual passion and inspire them to tackle complex societal issues through the lens of communication. His dedication to academic rigor and his emphasis on ethical media practice have made him a beloved and respected figure at the University of Ilorin and beyond.

    Dr. Mustapha’s leadership at UNILORIN extends beyond the classroom and into the administrative and academic realms. He has held several key positions, including Head of the Department of Mass Communication, Postgraduate Coordinator, and Staff Adviser. As a member of the University Senate, he has represented the Faculty of Communication and Information Sciences (FCIS), further contributing to the strategic direction of the university. His leadership has been instrumental in shaping the department into a premier institution for Mass Communication studies in Nigeria. His academic influence has not been confined to his teaching or research alone. Dr. Mustapha is an active member of several professional organisations, including the African Council for Communication Education (ACCE), the Nigerian Institute of Public Relations (NIPR), and the Association of International Mass Communication Researchers (AIMCR). He has collaborated extensively with both governmental and non-governmental organizations, lending his expertise as a consultant and advisor on projects that seek to address contemporary media challenges.

    His research contributions have earned him recognition from prestigious institutions such as the Centers for Disease Control and Prevention (CDC) and the National Natural Science Foundation of China, further solidifying his global academic standing. As a visiting scholar at Kwara State University and Summit University Offa, he continues to shape the future of Mass Communication through mentoring and collaborative research. His unparalleled dedication to the advancement of Mass Communication has earned him a legacy that will continue to influence scholars, students, and media practitioners for generations to come. His academic career is a testament to the power of communication as a force for societal transformation. Through his cutting-edge research, mentorship and leadership, Dr. Mustapha has proven himself to be not just an educator, but a transformative figure whose work resonates far beyond the classroom, impacting media systems, political processes and societal well-being.

    Read Also: Federal Govt targets capital market to fund infrastructure

    Also standing as a beacon of inspiration for aspiring scholars is Dr. Kadiri, a Mass Communication scholar who seamlessly blends academic excellence with a deep commitment to humanitarian causes. Her journey has been marked by an unwavering dedication to social change, especially in the areas of digital media activism, rural development, and health communication.

    Her academic journey began with a Bachelor’s degree in Mass Communication from the University of Lagos, where she first cultivated her passion for media and communication. Eager to expand her global perspective, Dr. Kadiri furthered her studies at the University of Ghana, Legon, earning a second degree in Communication Studies. This experience broadened her understanding of the international media landscape and informed her later work. She went on to obtain a Ph.D. in Communication from Universiti Utara Malaysia, specialising in digital media and health communication. Her commitment to academic excellence is further exemplified by a scholarship in 2018, allowing her to study the Social Sector Management Programme at Pan-Atlantic University, Lagos.

    Dr. Kadiri’s contributions extend beyond the classroom. She is a passionate advocate for the power of media to address social issues, particularly in marginalized communities. Through her work in health communication, she has raised public awareness on critical health topics, leveraging digital platforms to influence positive change. Dr. Kadiri is also a talented humanitarian photographer, recognized for her powerful images that shed light on the lives of underserved populations. Her activism, through both her photography and research, continues to drive discourse on social justice and rural development.

    Besides the duo of newly appointed Mass Communication professors, UNILORIN also announced the promotion of several academics whose appointments take effect from October 1, 2024. Among these distinguished scholars are Prof. Olufunmilayo A. Abiodun and Prof. Fausat I. Kolawole from the Department of Home Economics and Food Science; Prof. A.G. Animasawun from Peace and Conflict Studies at the Centre for Peace and Strategic Studies; Prof. A.S. Afolabi from the Department of History and International Studies; Prof. E.E. Anyebe from the Department of Nursing; and Prof. H. M. Omokanye from the Department of Otorhinolaryngology.

    Also joining the ranks of professors are Prof. K.T. Omopupa from the Department of Library and Information Science; Prof. A.O. Akanbi from the Department of Science Education; Prof. J.A. Adeniran from the Department of Chemical Engineering; Prof. Olubunmi A. Mokuolu from the Department of Water Resources and Environmental Engineering; Prof. A.M. Ismail from the Department of Business Law; and Prof. O.A. Iyiola from the Department of Zoology. The promotion also includes Prof. Shakirat I. Bello from the Department of Clinical Pharmacy and Pharmacy Practice; Prof. A.A. Kilishi from the Department of Economics; Prof. A.Y. Ahmed from the Department of Geography and Environmental Management; Prof. O.A. Fawole from the Department of Sociology; Prof. Nusirat Elelu from the Department of Public Health and Preventive Medicine; and Prof. L.O. Raji from the Department of Theriogenology and Production.

    The university also proudly unveiled the promotion of 31 new Readers: Dr. S.O. Akanbi from the Department of Agricultural Economics and Farm Management; Dr. A.O. Dauda from the Department of Home Economics and Food Science; Dr. Folusho A. Bankole from the Department of Agronomy; Dr. A.A. Aliy from the Department of Arabic; Dr. A. Mahmoud-Mukadam from the Department of Arabic; Dr. Theresa N. Odeigha from the Department of History and International Studies; and Dr. T.O. Ayinde from the Department of Physiology. Other newly promoted Readers include Dr. Grace G. Ezeoke from the Department of Obstetrics and Gynaecology; Dr. S.O. Onidare from the Department of Telecommunication Science; Dr. Eniola K. Ola-Alani from the Department of Adult and Primary Education; Dr. M.A. Lawal from the Department of Arts Education; Dr. S.O. Olatunji from the Department of Arts Education; Dr. A.A. Falade from the Department of Educational Technology; Dr. I. Ologele from the Department of Health Promotion and Environmental Health Education; and Dr. K.O. Afolabi from the Department of Science Education.

    Also promoted as Readers are Dr. Khadijat S. Ameen from the Department of Science Education; Dr. Dorcas S. Daramola from the Department of Social Science Education; Dr. M.O. Ibitoye from the Department of Biomedical Engineering; Dr. A.O. Otuoze from the Department of Electrical and Electronics Engineering; Dr. Taibat R. Adebiyi from the Department of Quantity Surveying; Dr. A.B. Ola from the Department of Urban and Regional Planning; Dr. Khadijat A. Abdulkareem from the Department of Plant Biology; Dr. T. Garuba from the Department of Plant Biology; Dr. S. Oyedeji from the Department of Plant Biology; and Dr. E.O. Dunmade from the Department of Industrial Relations and Personnel Management. The list of newly promoted Readers also includes Dr. Iyiola T. Akindele from the Department of Public Administration; Dr. F.U. Attah from the Department of Pharmacognosy and Drug Development; Dr. O.K. Yusuff from the Department of Chemistry; Dr. A.I. Abdulrahman from the Department of Economics; Dr. A. Raji from the Department of Sociology; and Dr. M. Adam from the Department of Veterinary Pathology.

  •  Naira’s sustained rally hits forex speculators hard

     Naira’s sustained rally hits forex speculators hard

    The naira rally continued last week following key policy changes at the Central Bank of Nigeria (CBN). In the parallel market, the naira appreciated to N1,540, and stabilized at N1,501/$1 in the Nigerian Foreign Exchange Market (NFEM), the official market. The continued naira gains have pushed FX speculators to post losses as they offload long-held dollar positions at cheaper rates, writes Assistant Editor, COLLINS NWEZE

    For many people who understand the workings of the forex market, one of its biggest threat remains the activities of speculators. Such activities not only create panic and volatility in the market, but stifle investment into the domestic economy.

    But of recent, the naira has been recording major gains across markets, pushing forex speculators to offload dollar holdings to guard against further loses.

    The naira has sustained rally at both official and parallel markets, with the local currency, reaching its strongest level in nearly eight months. It closed at N1,540/$1 at the parallel market, and N1,500.41/$1 at the official market.

    Analysts said FX speculators lost over N10 billion in current naira rally and will record more losses as the greenback holders dump it in open market.

    One forex dealer, said he offloaded dollar stockpiled for months, over fears of losing more funds.

    “A stabilizing naira is good for everyone stabilizing at both the official markets, but sad over capital loses. This is not the time to hoard dollar because naira is fast finding its feet,” Michael Amos, FX trader based in Mushin Lagos. 

    According to Bureau De Change operators in Wuse Zone 4, Abuja, naira rally has made it difficult for speculators to make new purchases.

    One of the traders Aminu Bakori said that he was surprised that the naira could make such recovery within a short period.

    He said the CBN’s decision to extend $25,000 weekly sale to Bureaux De Change (BDCs) at the Nigeria Foreign Exchange Market (NFEM) by four months is also impacting positively on the naira.

    He said the sale of dollars to BDCs at the official market rate was to enable the operators meet rising demand for foreign exchange.

     Asked what he thought was responsible for the positive turn in the fortunes of the Naira, Bakori said: “The CBN recently reminded the general public, especially travelers of the continued availability of personal travel allowance and business travel allowance from their banks to meet their personal and business travel requirements”.

    Continuing, he said the apex bank promised that all legitimate and eligible foreign exchange transactions are expected to be complete in the NFEM, at the market determined exchange rate.

    “The CBN reaffirmed its commitment to a fully functional foreign exchange market as it continues to provide liquidity when necessary to manage price volatility which brought positive feedback into the market,” he said.

    Other FX operators said the era of forex speculation and distortions in the domestic foreign exchange market came to end with the ongoing implementation of FX Code.

    Analysts advised foreign exchange (Forex) buyers to resist the urge of succumbing to the speculative activities of some players in the market to save the naira.

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    President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said he believed the apex bank remained committed to resolving the foreign exchange issues confronting the nation and as such has been working to manage both the demand and supply side challenges.

    While admitting that there was huge demand pressure for foreign exchange to meet the needs of manufacturers as well as those for the payment of tuition, medical fees and other invisibles, he added that the monetary authority was strategizing to help Nigeria earn more stable and sustainable inflows of foreign exchange in the face of dwindling inflows from the oil sector.

    Specifically, he noted that recent initiatives undertaken by the Bank such as the FX code policy, Electronic Foreign Exchange Matching System (EFEMS), had helped to increase foreign exchange inflow to the country.

    The EFEMS was meant to check forex market distortions, eliminate speculative activities and instill transparency. The EFEMS, which is commonplace in developed and developing markets offers real-time information on currency rates, trading volumes, and market activity.

    He urged Nigerians to play their role by adjusting their consumption patterns, looking inwards and finding innovative solutions to the country’s challenges.

    He submitted that Monetary policy alone could not bear all the burden of the expected adjustments needed to manage the challenges around Nigeria’s foreign exchange.

    He attributed the ongoing rebound of the naira against dollar and other world currencies to the CBN’s policies.

    Gwadabe hinged the naira rally to the newly implemented Foreign Exchange (FX) Code, rising investors confidence, and policies supporting more dollar inflows through diaspora remittances.

    He backed the apex bank’s position that the FX Code is comprehensively addressing various aspects of market conduct and practice, it is not intended to be exhaustive.

    He said the policy authorises the CBN to establish and enforce directives regarding the standards for financial institutions under which FX deals are to be conducted.

    Gwadabe said the code will further entrench transparency and accountability in the FX market, and continually sustain naira rally.

    He also backed CBN’s position that all institutions engaged in the foreign exchange market must also provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code.

    These plans are expected to be formally approved and signed by the institution’s board of directors, and it must be accompanied by relevant extracts from the board meeting where the plan was reviewed and endorsed.

    The local currency was battered in 2024 after it was devalued, leading to an over 40 per cent depreciation.

    Experts attributed previous naira’s depreciation to high inflation but remained confident that better days are ahead, as the CBN takes strategic steps to curb inflation and strengthen the naira.

    More views from stakeholders

    In a report, CEO of Comercio Partners Capital, Stephen Osho, said that he expects the naira to appreciate further in the future. He attributed this optimism to several factors, including the clarity provided by the CBN regarding the clearance of foreign exchange (FX) backlogs.

    “This has been one of the challenges we’ve faced in terms of supply shortages,” he explained.

    Osho noted that in recent times, there has been an increase in FX inflows, improving liquidity in the market. He also pointed to the CBN’s focus on transparency, liquidity, and price discovery, all of which have contributed to this improvement.

    Comercio Partners, in its 2025 macroeconomic outlook, highlighted that the rebasing of Nigeria’s Consumer Price Index (CPI) to 2024 would also create statistical effects that could lower inflation figures.

    According to Ifeanyi Ubah, head of investment research and global macro strategist, “We expect headline inflation to decrease to around 15 percent in the first half of 2025, indicating a gradual return to economic stability.”

    The report also emphasised the importance of local refining capacity expansion, particularly with the launch of the Dangote Refinery. This development is expected to reduce the impact of exchange rate fluctuations on energy prices. By relying more on domestically refined petroleum, Nigeria is likely to see a reduction in energy price volatility. This, combined with a more stable exchange rate, is expected to lower production and transportation costs, creating a positive ripple effect throughout the broader economy.

    Managing Director, Afrinvest West Africa Limited, Ike Chioke, projected a sustained positive naira performance this month, supported by CBN’s efforts at entrenching transparency in market operations. “In this new month, we expect the naira to remain on a positive trajectory bolstered by CBN’s effort at currency stability,” he said in emailed note to investors.                                     

    The naira rally was also driven by inflows from Foreign Portfolio Investors (FPIs), substantial contributions from International Oil Companies (IOCs), and the CBN’s $18.40 million intervention to authorised dealers.

    Other analysts also mentioned the renewed interest of Foreign Portfolio Investors (FPIs) in the FX market—driven by improved market confidence, a more efficient FX framework, and strengthening macroeconomic conditions—alongside the CBN’s sustained market interventions, is expected to continually support naira stability.

    CEO, Countryside Markets Limited, Stevens Michael, said: “For me,  the whole idea is just to ensure that there is a lot more sanity in the foreign exchange market because those characters have really created a whole lot of problems over the years in the foreign exchange market,”

    “I think that is what the CBN is trying to do and the more we’re able to sanitise the markets, I think the more stability it will achieve in the foreign exchange market,” he said.

    forex

    The CBN has stated that while every effort has been made to ensure that the FX Code comprehensively addresses various aspects of market conduct and practice, it is not intended to be exhaustive.

    Governor Cardoso also noted that the journey towards market reform is already yielding results. He stated, “The year 2024 was marked by structural reforms that sought to return the naira to a freely determined market price and ease volatility as several distortions were removed from the market.”

    Beyond the foreign exchange market, the FX Code forms part of the CBN’s renewed focus on compliance across the financial sector. Its six guiding principles, alongside 52 sub-principles, were designed to become the benchmark for conduct across all participating institutions.

    Domestic, foreign investors eye economy

    A member of the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC), Bala Bello, listed key indicators that have overtime, kept domestic and domestic investors attracted to the domestic economy.

    In his personal statement during the last MPC meeting held in Abuja, he said the external reserves position have grown remarkably to $40.88 billion as of 21st November 2024 from $40.06 billion at end-October 2024.

    The upsurge in reserves levels, he said strengthens the needed buffer to mitigate unforeseen risks and reinforces the importance of ongoing efforts at sustaining improved foreign exchange supply.

    Bello said the rising reserves position, alongside the relatively stable exchange rate, would enhance Nigeria’s position as an attractive investment destination.

    He maintained that the resilience of the domestic economy, bolstered by a strong financial system with robust soundness indicators, instils confidence in the economic structure.

    “Major prudential ratios, such as capital adequacy, liquidity, and Non-Performing Loans ratios, were within prudential limits, reflecting proactive regulatory oversight and strong industry risk management practices. Significant credit was extended to growth-enhancing sectors such as agriculture, manufacturing and general commerce, as well as individuals and households,” he said.

    According the MPC member, this credit played a crucial role in stimulating economic activities and supporting output performance, emphasizing the role of financial institutions in the economy.

    He disclosed that the results of stress tests showed that bank’s solvency and liquidity ratios remained resilient in scenarios of potential severe macroeconomic shocks. Continued vigilance is, however, required to ensure that the banking system remains strong and stable amid lingering risks.

    He added that everyone has a role to play in this, and our collective vigilance is crucial for the stability of our financial system.

    Continuing, he said that notwithstanding, Nigeria’s Real Gross Domestic Product (GDP) has maintained a positive trajectory, with a growth rate of 3.46 per cent in the third quarter of 2024, compared with 3.19 and 2.54 per cent in the preceding and corresponding periods, respectively.

    “This growth, driven by both the oil and non-oil sectors, with a notable contribution from the Services sector, is a testament to the resilience of our economy. The non-oil sector grew by 3.37 per cent in the third quarter, compared with 2.80 per cent in the second quarter, while the oil sector grew by 5.17 per cent (year-on-year), compared with 10.15 per cent in the preceding quarter,” he said.

    Another MPC member, Aloysius Ordu, said CBN staff presentations show noteworthy green shoots since the era of tight money began.

    “First, there has been a marked improvement in the current account balance. Q3 2024 data shows a surplus of US$6.29 billion vis-à-vis US$5.14 billion in Q2 2024; and the overall balance of payment position recorded a surplus of US$3.79 billion,” he said.

    “Second, the external reserves stood at US$40.88 billion at end-October 2024, a remarkable 16.9 months of import cover. The exchange rate remained relatively stable for most of the second half of 2024, reflecting increased capital inflows on account of attractive yields,” he added.

    On his part, another member of MPC, Bandele Amoo, said Nigeria’s Balance of Payments (BOP) position remained stable to support our external sector stability.

    The BOP provisionally recorded a surplus in the 3rd Quarter of 2024 driven by positive balances in the current account and net asset acquisition positions.

    The overall account positively stood at US$3.79 billion as at Q3 of 2024. Meanwhile, portfolio inflows remain high, recording a net inflow US$0.59 billion as at November 2024.

    “The total foreign exchange flows through the economy stood at US$6,175 billion in September 2024 compared with $2,570.6 billion in August 2024. Furthermore, foreign reserves at the end of October 2024 stood at $39.68 billion, equivalent to several months of import cover”.

    “External reserves is projected to further increase by year end due to expected reduction in import demand pressures arising from the full deregulation of the downstream oil sector, reduced petroleum products importation regime, increased inflows and other process management by the CBN,” he said.

    Global inflation statistics

    Earlier, CBN Governor, Olayemi Cardoso, said  global inflation is projected to decline to 3.5 percent in 2025, down from its peak of 9.4 percent in 2022.

    Speaking during the last Chartered Institute of Bankers of Nigeria (CIBN) Bankers Dinner in Lagos, he said major central banks are gradually easing their monetary conditions and this shift is slowly reopening access to international capital markets for emerging economies. However, global growth remains subdued at 2.6 percent, hindered by geopolitical tensions, China’s economic slowdown, and growing trade fragmentation.

    He said the Sub-Saharan Africa has seen modest growth of 3.6 per cent last year, while still lagging pre-pandemic levels.

    “The effects of monetary tightening measures have helped to curb inflation in some key markets such as South Africa and Kenya but many countries are still grappling with double-digit inflation rates and high debt service burdens. These challenges constrain the resources available for critical investment in education, healthcare and infrastructure,” he said.

    While food prices remain a key contributor to the uptick, the Monetary Policy Committee  members recently commended the efforts of the Federal Government for the improved security, especially in the North-East of the country, which would likely improve food production.

    The committee members also noted the role of rising energy prices on the general price level due to its impact on factors of production. The recent increase in the price of Premium Motor Spirit (PMS) has also impacted the cost of production and distribution of food items and manufactured goods.

    The committee members were optimistic that the full deregulation of the downstream sub-sector of the petroleum industry would eliminate scarcity and stabilise price levels in the short to medium term.

  • Concerns mount as regulatory audit of local airlines begins

    Concerns mount as regulatory audit of local airlines begins

    Plans by the NCAA to conduct a comprehensive audit on local carriers have sparked anxiety in Nigeria’s aviation sector. This move, prompted by recent incidents such as Max Air’s suspension and frequent near misses, aims to address ongoing challenges eroding traveller confidence and ensure long-term growth and safety within the industry. KELVIN OSA OKUNBOR reports

    The drive to enhance air safety systems, procedures and processes is gaining significant momentum as countries around the world, including Nigeria, take proactive steps to strengthen their civil aviation regulations. Experts often view these efforts as an ongoing journey rather than a final destination, requiring all stakeholders in the aviation value chain to adhere to internationally recognized standards set by global regulators, including the International Civil Aviation Organisation (ICAO), the International Air Transport Association (IATA), Flight Safety International (FSI), the Airports Council International (ACI), and other relevant bodies. Therefore airlines, airport authorities, regulators, and service providers invest substantial resources to meet the highest safety standards, ultimately boosting the confidence of air travel users.

    However, the recurring incidents of near-miss accidents in Nigeria’s aviation sector raise concerns about the effectiveness of collaboration among key industry players. In recent years, reports of aircraft overshooting runways, skidding off, and incidents such as runway incursions and excursions have become all too common, dominating industry discussions. As a result, the state of Nigeria’s air transport sector is increasingly becoming a topic of concern and debate, both locally and internationally.

    Intriguingly, some airlines have found themselves at the forefront of the industry’s concerning narrative. In a recurring pattern, certain carriers are forced to temporarily suspend operations due to a series of serious incidents, while the regulatory body is often compelled to take drastic action to prevent what could be an impending accident. Just last week, the Nigeria Civil Aviation Authority (NCAA), the country’s apex regulatory body, revealed plans to intensify its ongoing comprehensive audit of all scheduled domestic carriers.

    Speaking on this development, Mr. Michael Achimugu, the Director of Public Affairs and Consumer Protection at the NCAA, stated: “The safety audit will involve a re-inspection of Max Air’s organization, procedures, personnel, and aircraft, in accordance with the Nigeria Civil Aviation Regulations.” He further explained that the economic audit would evaluate the airline’s financial stability to ensure it can maintain safe flight operations. Achimugu added that the NCAA had begun conducting organizational risk profiles for each of the scheduled operators.

    During this suspension period, a thorough safety and economic audit will be carried out on the airline. He emphasised that the economic audit would assess the airline’s financial health to ensure its ability to sustain safe flight operations. He also noted that the NCAA had initiated organisational risk profiles for each scheduled carrier, including Max Air, which is nearing completion. The audit has become increasingly necessary due to the frequent incidents involving some domestic carriers. Achimugu further stated that the resumption of Max Air’s domestic operations would depend on the satisfactory completion of this audit.

    “Statutorily, the Nigerian Safety Investigation Bureau (NSIB) has initiated investigation into the occurrence. The NCAA will provide the required support to the NSIB in this regard. However, as a result of this incident, Max Air is suspending its domestic flight operations for a period of three months with effect from midnight, 31st January 2025, to allow for an internal appraisal of its operations by its management.

    “During this three -month period, the NCAA will conduct a thorough safety and economic audit on Max Air. The safety audit will entail a re-inspection of Max Air’s organization, procedures, personnel, and aircraft as specified by Part 1.3.3.3(b) of the Nigeria Civil Aviation Regulations, while the economic audit will critically examine the financial health of the airline to guarantee its capability to sustain safe flight operations. The resumption of Max Air’s domestic flight operations will be predicated on the satisfactory completion of this audit. The NCAA is aware of the inconvenience this action may cause intending passengers of Max Air. However, the safety and well-being of passengers is paramount. Thus, the NCAA appeals for patience and understanding while it ensures the protection of passenger rights,” Achimugu said.

    Experts suggest that the latest development comes on the heels of a series of serious incidents involving local carriers. Notably, this is not the first time Max Air has come under the regulatory spotlight. On July 13, 2023, the Nigeria Civil Aviation Authority (NCAA) suspended parts A3 and D43 in the Operations Specifications for the Boeing B737 aircraft type in Max Air’s fleet. This decision was prompted by a series of incidents involving the Boeing B737 aircraft type. One of the incidents occurred on May 7, 2023, when a Boeing 737-400 (registration 5N-MBO) experienced the loss of the number 1 Main Landing Gear (MLG) wheel during a flight from Yola Airport, Adamawa State, to Nnamdi Azikiwe International Airport, Abuja.

    Additionally, on July 7, 2023, a fuel contamination issue was reported in the main fuel tanks of a Boeing 737-300 (registration 5N-MHM), leading to an Auxiliary Power Unit (APU) shutdown on the ground at Yola Airport. Another serious incident occurred on July 11, 2023, when a Boeing 737-400 (registration 5N-MBD) aborted its take-off at Mallam Aminu Kano International Airport (MAKIA) due to high Exhaust Gas Temperature (EGT) readings. On the same day, a Boeing 737-300 (registration 5N-MHM) had to return to Nnamdi Azikiwe International Airport (NAIA) due to a duct overheat indication in the cockpit.

    In response to these incidents, the NCAA assembled a team of inspectors to audit Max Air’s operations. The airline was informed that the audit results must be satisfactory before it would be permitted to resume operations with the affected aircraft type. This is just one example of the NCAA’s regulatory actions. In 2022, the NCAA conducted financial and economic audits of eight domestic carriers to assess their financial health. The regulatory body stressed that the audits were crucial to ensuring the stability of airlines in an industry where passenger confidence is increasingly under scrutiny. The NCAA clarified that the audits would be carried out in phases, with preliminary reports suggesting that while the carriers were not facing major safety challenges, they were struggling with cost-related issues. These included difficulties accessing foreign exchange at the official rate and the rising cost of aviation fuel, which have made it difficult for airlines to cover their operational expenses.

    The NCAA said: “Eight other carriers are undergoing financial and economic audit, and this is done in batches. Right now, it is just a financial and economic crisis, and we will do all we can to ensure it doesn’t get to a safety crisis. The NCAA has grounded a considerable number of aircraft. Though airlines may be undergoing these challenges, the regulator would not compromise on safety.”

    Besides Max Air, the NCAA had conducted audits on the operations of Aero Contractors, DANA Air and others with damning outcomes. On July 20, 2022, the NCAA suspended Dana Air’s Air Transport License and Air Operator Certificate indefinitely after a thorough financial, safety and technical audit. “The decision is the outcome of a financial and economic health audit carried out on the Airline by the Authority, and the findings of an investigation conducted on the Airline’s flight operations recently, which revealed that Dana Air is no longer in a position to meet its financial obligations and to conduct safe flight operations. The NCAA acknowledges the negative effect this pre-emptive decision will have on the airline’s passengers and the travelling public and seeks their understanding, as the safety of flight operations takes priority over all other considerations.”

    During a summit last year organized to support local carriers, the acting Director-General of NCAA, Captain Chris Najomo, dropped a bombshell. He disclosed that if the NCAA were to strictly adhere to the findings of the financial audits conducted on Nigerian carriers, it could expose significant vulnerabilities in their long-term sustainability. To help these carriers remain operational, Najomo emphasised that the NCAA continues to support indigenous airlines, ensuring that safety is never compromised. This commitment, he noted, was the driving force behind the recent regional summit themed: “Repositioning the Nigerian Aviation Industry for Financial Capability and Economic Viability: An Inclusive Regulatory Dialogue.”

    Najomo explained that the summit aimed to strengthen airlines and other service providers, enhancing their operational efficiency and international competitiveness. He said, “Supporting the sustainable growth of the local airline industry while promoting compliance with national and international obligations, and assessing existing local laws and international regulations, is crucial. This will improve funding, financial management, and safety, among other factors.”

    In a related development, Chairman of the Senate Committee on Aviation, Abdulfatai Buhari, announced that the National Assembly is working on a bill that would require Nigerian airlines to operate with a fleet of at least four to five aircraft before starting operations. Buhari stated that this proposed bill is one of the measures to address the capacity issues and other challenges Nigerian carriers face.

    Experts suggest that the ongoing audit of local carriers will provide the NCAA with an opportunity to reassess its policy, particularly the regulation that mandates a minimum fleet size of six aircraft for scheduled airlines. Meanwhile, the President of the National Association of Nigeria Travel Agents (NANTA), Mr. Yinka Folami, voiced deep concern over the increasing number of near-fatal incidents within Nigeria’s local aviation space. He urged all stakeholders to prioritise safety and address operational issues. While welcoming the ongoing audit by the NCAA, Folami remarked that an organizational risk audit for all airlines operating in Nigeria had been long overdue. He urged both airline operators and government regulatory agencies to set aside their differences and collaborate to enhance emergency response systems and ensure passenger safety. “We are concerned about the growing number of near-fatal incidents in the Nigerian aviation space and the impact this is having on the traveling public,” Folami stated. He also highlighted that many of the association’s customers have shared similar concerns, expressing anxiety over the safety of air travel in Nigeria.

    “We urge all stakeholders to unite and tackle the challenges facing the industry to restore confidence in air travel across Nigeria,” said the NANTA president. NANTA also praised the ongoing investigations into the industry’s challenges but stressed the need for proactive measures to ensure the safety and smooth travel experiences for passengers. “We cannot ignore the safety concerns of our customers. We call on all stakeholders to collaborate in minimising risks and maximizing passenger protection.” He added that the Nigerian traveling public is already facing many difficulties, making it essential for the industry to prioritize their safety and well-being.

    In a related statement, a former NCAA chief, who requested to remain anonymous, underscored the importance of auditing local carriers to maintain the integrity of the safety chain. “The NCAA must regularly engage with industry players, especially airlines, to ensure that safety issues do not arise, particularly in situations of financial distress,” he said. He emphasised that failing to address financial difficulties in a timely manner could lead to safety compromises, with airlines potentially cutting corners in their operations. “Aviation is inherently safety-sensitive. If financial troubles are not properly managed, it’s only a matter of time before airlines can no longer meet all regulatory requirements, and safety may be compromised,” he warned.

    The former NCAA official pointed out that the COVID-19 pandemic had not only placed airlines in a difficult position but also revealed several systemic issues. “Many airlines worldwide didn’t survive the pandemic, and some are still grappling with its effects. Just when we thought recovery was on the horizon, issues like foreign exchange shortages and the rising cost of Jet A1 fuel further exacerbated the situation. Despite these challenges, airlines are doing their best under difficult circumstances.” He concluded, “These challenges have increased our workload, but we are committed to maintaining vigilant oversight to ensure safety standards are met.”

    The verdict came as little surprise to many industry watchers, who noted that global carriers have been navigating turbulent financial and economic challenges since the outbreak of the COVID-19 pandemic. A study conducted by industry experts highlights that Nigerian carriers’ efforts to acquire new aircraft have been hindered by the stringent conditions imposed by aircraft manufacturers and leasing companies. Additionally, the prohibitive cost of offshore aircraft maintenance continues to be a major challenge for local carriers.

    However, efforts are underway by several ambitious operators to establish aircraft repair facilities within Nigeria. Ibom Air, Air Peace, United Nigeria, Xejet Airlines, and others are in the process of negotiating with foreign partners to realize this significant goal. In an interview, the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, explained that the construction of the XeJet Flight Support and Engineering facility at the Nnamdi Azikiwe International Airport in Abuja—valued at approximately $10 million—aligns with the vision of the current administration to foster growth and development in local aviation. The government has consistently emphasized the need for a Maintenance, Repair, and Overhaul (MRO) facility, similar to those found in other parts of the world.

    Read Also: Experts canvass rejig of operational model for NCAA’s airlines’ audit

    The facility, to be built by the Chinese Civil Engineering Construction Company (CCECC) over an 18-month period, will feature a Private Business Terminal, a Maintenance Hangar, hotels, conference centres, and more. Keyamo expressed his enthusiasm about having an indigenous airline, in partnership with Nigerian banks, not only constructing an MRO facility but also establishing other critical flight support infrastructure. Keyamo further disclosed that the federal government has attracted a similar project and allocated resources to develop an Aircraft Manufacturing Company in Nigeria. “While the government may not be able to provide direct financial support to airlines, it is committed to creating the right policy and enabling environment for growth and development. We will continue to provide all the necessary support to XeJet,” Keyamo said.

    Keyamo also assured that the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Civil Aviation Authority (NCAA) would oversee the project to ensure that the facility adheres to all regulatory requirements, making it world-class and capable of attracting international customers. XeJet CEO Emmanuel Iza noted that the facility would offer flight support services to business passengers while improving aircraft maintenance services. He expressed the airline’s ambition to put Nigeria on the map as a hub for aircraft manufacturing. Even if they are not initially able to manufacture entire aircraft, Iza said, their goal is to produce aircraft components, adding that Nigeria has the talent and infrastructure necessary to support such an endeavour. “All that is needed is the right enabling environment,” he emphasised. Iza also revealed that the construction of the facility would occur in two phases: first, groundwork, including the creation of a runway and taxiways connecting the facility to the airport; and second, the construction of the necessary buildings and structures.

    About the Private Business Terminal, the Chairman emphasised that the tarmac would be built to world-class standards, providing private jet owners with top-tier services comparable to those in other developed countries. However, some industry experts argue that the Nigerian Civil Aviation Authority (NCAA) should look beyond cosmetic measures to address the sector’s underlying issues. Captain Roland Iyayi, Chief Executive Officer of Top Brass Aviation, stated that a regulatory overhaul of local carriers is needed, which should include creating multiple licensing structures for airlines. According to Iyayi, the scale of an airline’s operations should determine the type of license it receives. He argued that categorizing all scheduled operators under the same regulatory framework is inappropriate, as it fails to account for the varying needs of different carriers.

    “I believe the NCAA should license airlines based on the type of aircraft they operate,” Iyayi said, stressing that charter operators, scheduled carriers, and airlines using small and medium-range aircraft should not fall under the same operational classification. He proposed that the licensing structure be tailored to the scale of operations, with distinct categories for different types of carriers. These could include air taxis for airlines using small propeller aircraft, regional operators for those with medium-range aircraft, and national airlines capable of nationwide operations.

    Iyayi argued that applying a one-size-fits-all model does not make economic sense. “To drive change, enforcement of regulations is crucial. We need to review policies that hinder growth, particularly the current licensing structure. It is essential to create a regulatory framework that accommodates different niches in the industry. The one-size-fits-all mentality is flawed, and there is wisdom in licensing airlines according to their specific categories,” he emphasised.

    Meanwhile, investigations reveal that the NCAA is intensifying its engagement with local carriers over the implementation of the proposed minimum fleet requirement. The plan to mandate a six-aircraft fleet for scheduled carriers has sparked controversy and divided opinions within the industry. Some experts have expressed concerns that this policy could be detrimental to the sector’s growth. Despite setting 2025 as the target date for enforcement, NCAA’s Acting Director-General, Captain Najomo, has indicated that the regulator is open to adjusting the policy. Najomo stated that there is room for flexibility, ensuring that the implementation of the six-aircraft requirement aligns with the specific operational needs of individual carriers. He said: “We are tweaking that, even though it takes effect from 2025, but we are looking at the regulation very well, whereby it will suit what operation you want to do. If you’re going to go to a full-blown airline, we will look at the regulation and maybe the six aircraft that will come in, but there are some operators who just want to do it, maybe Lagos-Ibadan, Lagos-Ilorin and all that. So, we’ll look at the regulation and say, okay, maybe you should stick back to the three aircraft and see how it is. We want to encourage more people to come into the industry.”

    He said the Federal Government is working on interventions for the sector. The NCAA, he further disclosed, has finalized plans to digitize its operations to enhance its oversight functions. Under this new initiative, the civil aviation regulator will implement digital platforms for processing approvals, licenses, recertification renewals, and addressing passenger complaints. On the benefits of the training and the new portal, Najomo explained: “The portal will allow for real-time monitoring of airline performance, in addition to tracking passenger handling procedures during check-in, boarding, disembarkation, and other aspects of the travel experience. The data collected will provide regulators, service providers, and the public with an accurate gauge of airline performance. Consumers will be able to view performance details on the official NCAA website, enabling them to assess the best and worst-performing airlines from a customer service perspective.”

    He added: “The portal has yet to be launched, but we are ensuring that the necessary training is in place. We’ve already trained our staff, and it’s crucial to engage all stakeholders to understand how the portal will function. Once operational, this system will benefit everyone involved.” According to Najomo, the new platform will not only expedite the resolution of passenger complaints but will also serve as a barometer for evaluating the performance of both local and foreign airlines operating in Nigeria. He emphasised that the capacity-building program aims to equip airline personnel and the regulatory body with the skills needed to address common passenger complaints, such as flight delays and cancellations. To further this goal, Najomo revealed that the NCAA has undertaken the digitalisation of much of its operations using cutting-edge information technology applications.

    Najomo also highlighted the ongoing efforts by Mr. Keyamo to create a favourable environment for local carriers to acquire aircraft. “The Minister has been actively engaging with aircraft manufacturers such as Boeing and Embraer to secure dry leasing options for our airlines,” he said. “This initiative is progressing well, and we expect tangible results soon, which will enable our airlines to expand their fleets.”

    However, the proposed fleet policy has faced criticism from some sector experts. Engr. Cyril Obuah, former Director at Azman Air, argued that raising the minimum fleet requirement to six aircraft for start-up airlines would discourage investment and could prove counterproductive. Obuah pointed out that many of Nigeria’s past and present airlines, including ADC, Kabo, Afrijet, Belview, Slok, and Azman Air, started with fewer than three aircraft when the country’s economy was not as challenging as it is today. He argued that the collapse of many defunct carriers was due to a poor economy, exchange rate volatility, and corrupt leadership, rather than mismanagement, as often claimed. Obuah stressed that the NCAA should focus on encouraging the government to support the growth of more airlines, particularly after the failed attempt to launch Nigeria Air, the planned national carrier. He warned that the new regulation could lead to increased unemployment, particularly for aviation professionals, as many would struggle to find work under the new fleet policy.

    He further contended that flight delays and cancellations are not necessarily caused by the number of aircraft in a fleet. “The NCAA is already dealing with many aviation professionals who are unemployed,” Obuah said. “This new law will only worsen the situation. The NCAA alone cannot absorb all these jobless professionals. Instead of implementing policies that harm the economy, we need laws that will stimulate growth.” He concluded, “Delays and cancellations are not solely due to the number of aircraft an airline operates. There are many other factors. This law, in my opinion, will be regretted.” Capt. Mohammed Badamasi, a former pilot with the defunct national carrier Nigeria Airways, also urged the NCAA to reconsider the new regulation, despite the challenges faced in the past.

    Badamosi emphasised that the NCAA should focus on monitoring airlines to ensure they operate within the limits of their fleet size and avoid overextending by flying more routes than they can handle. He also criticized the NCAA for not consulting stakeholders before formulating the regulation, pointing out that it could face challenges in the National Assembly. “Why is it that the NCAA is no longer engaging with stakeholders to brainstorm on issues like this before enacting a regulation that affects the entire industry?” Badamosi asked. “Rules should not be made to make life difficult for those who are meant to follow them. If the NCAA is unwilling to correct this mistake, can’t it be challenged in the National Assembly?”

    Meanwhile, Frank Oruye, an aviation stakeholder, shifted some of the blames for the industry’s challenges to Nigerian airline operators. He suggested that the minimum fleet requirement for start-up airlines should be four aircraft to increase their chances of survival. Oruye also critiqued Nigerian investors for their tendency to operate independently, rather than pooling resources to build a more robust industry, like how European airlines collaborate. He explained: “New national airlines have been created all over Africa, each operating only a few aircraft—often less than what a single European airline would own. Europeans, however, pool resources for maintenance, aircraft specifications, and spare parts procurement, benefiting from economies of scale. African airlines, on the other hand, tend to add just one, two, or three aircraft, contributing to GDP and profits in Europe rather than to the African continent.”

    In contrast, Group Capt. John Ojikutu (rtd) supported the new regulation. He suggested that airlines unable to meet the six-aircraft minimum could opt for charter operations. Ojikutu further recommended that airlines partner or interline with each other, thereby reducing delays and cancellations, and suggested that some airlines collapse due to mismanagement and corruption. “No, it was not a bad economy that led to the collapse of early airlines—it was poor management,” Ojikutu asserted. “It wasn’t the exchange rate either, but institutional corruption. Take a look at airlines such as Kabo, Okada, DAS, Gas and others. They flew over 2,000 sorties for the Economic Community of West African States Monitoring Group (ECOMOG), earning $50,000 to $120,000 per sortie, depending on the aircraft used. Airlines such as ADC with just four aircraft, carried an average of 25,000 passengers monthly. The real issue was poor management and corruption, not the economy.”

    Despite the challenges, there is optimism in the horizon. The recent signing of the Cape Town Convention Protocol on Mobile Asset Protection offers a new avenue for Nigerian carriers to secure aircraft leases. This breakthrough was highlighted during a high-level meeting at the Aviation Economic Conference in Dublin, where Afreximbank expressed its readiness to support aircraft financing for Nigerian airlines. Afreximbank’s commitment to supporting Nigerian carriers came after a positive discussion led by Mr Keyamo. Helen Brume, Afreximbank’s Director and Global Head of Project and Asset-Based Finance, underscored the bank’s 30-year track record in promoting African trade and its experience with airlines such as Arik Air, Kenya Airways, and TAG. Brume highlighted the importance of aviation infrastructure in improving the competitiveness of African carriers.

    Afreximbank also announced the launch of a leasing subsidiary, with plans to deliver 25 aircraft for dry leasing to African airlines.

    This initiative aims to enhance the operational capacity of Nigerian airlines, particularly for domestic and Bilateral Air Service Agreement (BASA) routes. Praising Nigeria’s progress, Lereece Rose, Senior Director of Finance at Boeing, noted that Keyamo had significantly raised the country’s score in the Cape Town Convention, from 49.5% to 75.5%. This achievement reflects Nigeria’s commitment to fostering a favourable environment for aircraft financing and leasing.

    Keyamo reaffirmed the government’s dedication to facilitating partnerships that will enable Nigerian operators to access financing solutions, thus stimulating growth in the aviation sector, and improving service delivery on both domestic and international routes. To ensure these discussions result in actionable outcomes, a committee has been established to guide the collaboration. The partnership with Afreximbank marks a promising step forward for Nigeria’s aviation sector, signalling the potential for transformation and growth.

  • Assessing market reactions to FX Code policy implementation

    Assessing market reactions to FX Code policy implementation

    The foreign exchange market is at the centre of Nigeria’s economic and business growth. Last week, the Central Bank of Nigeria (CBN) took strategic step to enhance transparency and boost market confidence with the inauguration of the Nigeria Foreign Exchange Code (FX Code) in Abuja. The FX Code has so far ignited naira rally at both official and parallel markets, but its overall success will depend on banks and other financial institutions compliance with the implementation rules set by the apex bank. Assistant Business Editor COLLINS NWEZE reports

    Globally, foreign exchange markets are built on the foundation of ethics, transparency, and regulatory compliance, all under the vigilant supervision of central banks. These principles not only define the operations of these markets but also serve as key benchmarks for evaluating their effectiveness.

    The Nigerian foreign exchange market is no different. Last week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, unveiled the Nigeria Foreign Exchange Code (FX Code), underscoring the importance of integrity, fairness, transparency, and efficiency as essential drivers of the country’s economic growth and stability. He highlighted that the FX Code is based on six core principles: ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes. These principles, he noted, align with international standards while also addressing the unique challenges within Nigeria’s foreign exchange market.

    According to Cardoso, “The FX Code represents a decisive step forward, setting clear and enforceable standards for ethical conduct, transparency and good governance in our foreign exchange market. The era of opaque practices is over. The FX Code marks a new era of compliance and accountability. Under the CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions.”

    FX Code impact in market operations

    The naira has sustained rally at both official and parallel markets since the launch of the FX Code last week, with the local currency, reaching its strongest level in seven months. Analysts from Cordros Securities said the naira strengthened significantly, appreciating by 3.8 per cent week-on-week to N1,474.78/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM). This sharp increase is attributed to the policies implemented by the CBN, especially the FX code, which have influenced market dynamics and contributed to the currency’s strengthening.

    This latest movement marks a return to that range, reflecting the impact of recent monetary and foreign exchange measures introduced by the CBN to stabilise the currency and improve market confidence. Managing Director, Afrinvest West Africa Limited, Ike Chioke, said naira gained 4.3 per cent month-on-month against the greenback to close at N1,474.78/$1.00. Similarly, parallel market rate appreciated 1.4 per cent to N1,610.00/$1.00. He projected a sustained positive naira performance this month, supported by CBN’s efforts at entrenching transparency in market operations. “In the new month, we expect the naira to remain on a positive trajectory bolstered by CBN’s effort at currency stability,” he said in emailed note to investors.

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    The naira rally was also driven by inflows from Foreign Portfolio Investors (FPIs), substantial contributions from International Oil Companies (IOCs), and the CBN’s $18.40 million intervention to authorised dealers. Other analysts also mentioned the renewed interest of Foreign Portfolio Investors (FPIs) in the FX market—driven by improved market confidence, a more efficient FX framework, and strengthening macroeconomic conditions—alongside the CBN’s sustained market interventions, is expected to continually support naira stability.

    On his part, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, attributed the ongoing rebound of the naira against dollar and other world currencies to the CBN’s  policies. Gwadabe hinged the naira rally to the newly implemented Foreign Exchange (FX) Code, rising investors’ confidence, and policies supporting more dollar inflows through diaspora remittances. He backed the apex bank’s position that the FX Code is comprehensively addressing various aspects of market conduct and practice; it is not intended to be exhaustive.

    He said the policy authorises the CBN to establish and enforce directives regarding the standards for financial institutions under which FX deals are to be conducted. Gwadabe said the code will further entrench transparency and accountability in the FX market, and continually sustain naira rally. He also backed CBN’s position that all institutions engaged in the foreign exchange market must also provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code.

    These plans are expected to be formally approved and signed by the institution’s board of directors, and it must be accompanied by relevant extracts from the board meeting where the plan was reviewed and endorsed. CEO, Countryside Markets Limited, Stevens Michael, said: “For me, the whole idea is just to ensure that there is a lot more sanity in the foreign exchange market because those characters have really created a whole lot of problems over the years in the foreign exchange market,”

    “I think that is what the CBN is trying to do and the more we’re able to sanitise the markets, I think the more stability it will achieve in the foreign exchange market,” he said.

    The CBN has stated that while every effort has been made to ensure that the FX Code comprehensively addresses various aspects of market conduct and practice, it is not intended to be exhaustive. Governor Cardoso also noted that the journey towards market reform is already yielding results. He stated, “The year 2024 was marked by structural reforms that sought to return the naira to a freely determined market price and ease volatility as several distortions were removed from the market.”

    Beyond the foreign exchange market, the FX Code forms part of the CBN’s renewed focus on compliance across the financial sector. Its six guiding principles, alongside 52 sub-principles, were designed to become the benchmark for conduct across all participating institutions.

    Banks role in code implementation

    Commercial banks are major stakeholders in the FX Code implementation. Analysts have therefore called on the CBN to institute strong measures of compliance checks to ensure that banks, which in the past constituted one of the weakest links to FX policy implementation, comply with the new policy measures.

    Although the apex bank has secured their support and commitment to policy implementation, routine regulatory checks will help sustain market gains from the project. The formal signing by participating banks, symbolising a unified effort to promote transparency and trust but the apex bank regulator should take steps that guarantees that the lenders match their words with action.

    Understanding FX Code Rules

    Issued as a guideline for the foreign exchange market, the FX Code is backed by the authority of the CBN Act of 2007 and the Banks and Other Financial Institutions Act (BOFIA) of 2020. These legislative instruments empower the CBN to establish and enforce directives regarding the standards financial institutions must follow in conducting foreign exchange business in Nigeria.

    The FX Code, therefore, serves as an official directive that all market participants are expected to observe in their operations. As part of compliance requirements, market participants must conduct a self-assessment of their adherence to the FX Code and submit a report detailing their level of compliance to the CBN by January 31, 2025.

    Following this, all institutions engaged in the foreign exchange market must also provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code. This plan must be formally approved and signed by the institution’s board of directors, and it must be accompanied by relevant extracts from the board meeting where the plan was reviewed and endorsed.

    The CBN has also taken strategic steps to tackle inflation. The apex bank recently hosted the Monetary Policy Forum 2025, featuring fiscal authorities, legislative, private sector, development partners, subject-matter experts, and scholars with the theme: “Managing the Disinflation Process.”

    Cardoso explained that the apex bank’s focus is to sustain price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship.

    The CBN is continuing its disciplined approach to monetary policy, aimed at curbing inflation and stabilising the economy. “These actions have yielded measurable progress: relative stability in the FX market, narrowing exchange rate disparities, and a rise in external reserves to over $40 billion as of December 2024. The CBN also focused on strengthening the banking sector, introducing new minimum capital requirements for banks (effective March 2026) to ensure resilience and position Nigeria’s banking industry for a $1 trillion economy,” he said.

    Already, remittances through International Money Transfer Operators (IMTOs) rose 79.4 per cent to US$4.18 billion in the first three quarters of 2024, demonstrating the positive impact of FX reforms. Additionally, the CBN lifted the 2015 restriction barring 41 items from accessing FX at the official market to enhance trade and investment. These reforms and developments reflect the bank’s commitment to creating an enabling environment for inclusive economic development. However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance.

    “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Cardoso reaffirmed.

    To tackle the pressing challenge of inflation, the CBN acted decisively by raising the Monetary Policy Rate by 875 basis points to 27.5 per cent in 2024—an essential move to contain inflation and restore stability. “Our tight monetary policy stance has altered the previous dire trajectory, and we expect a downward trend in 2025. Inflation remains unacceptably high, but the signs are encouraging, particularly given that the full effects of monetary policy typically take 6-9 months to impact the consumer sector. Our commitment is unwavering: we will prioritize price stability until its benefits are felt by every Nigerian,” Cardoso said during the last bankers’ dinner held in Lagos.

    The CBN under Cardoso has equally undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency. This unification has enabled us to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future. Analysts insist that these measures under Cardoso have not only lifted the forex market and entrenched long-lasting stability but laid foundation for sustainable economic growth.