Business
CBN, Banks Sell $9.9 Billion as Naira Weakens to N1,670/$
The Nigerian Autonomous Foreign Exchange Market (NAFEM) reported a notable increase in foreign exchange turnover, reaching N15.74 trillion ($9.90 billion) in August 2024. This uptick follows the Central Bank of Nigeria’s (CBN) disclosure of foreign inflows of $585 million for the same month.
On the official market, the naira depreciated to N1,658 against the U.S. dollar, a slight drop from N1,659 on Monday, while black market rates soared to N1,670.
According to the CBN, the substantial turnover reflects a month-on-month rise of 33.88%, contributing an additional N2.51 trillion from July’s turnover of N13.23 trillion ($7.39 billion). This surge indicates heightened trading activity and investor engagement within the foreign exchange market.
Key players, including commercial banks, the CBN, and international oil companies, are primary sellers of forex on NAFEM. The FMDQ’s financial markets report noted that the increase in turnover was driven by transactions involving Treasury bills, Open Market Operations (OMO) Bills, and Federal Government Bonds, although other bond transactions saw an 18.43% month-on-month decrease.
Despite this increase, the naira continues to experience volatility amid ongoing economic pressures. The report highlighted that the average spot exchange rate rose by 1.68% to N1,586.56 in August, with fluctuations ranging from N1,543.84 to N1,617.08.
The CBN auctioned $876.26 million to end users through 26 commercial banks last month in an effort to stabilize the naira. This initiative temporarily appreciated the naira to N1,596.52/$ from N1,601/$, providing critical support for businesses needing dollars for importing essential goods.
CBN Governor Olayemi Cardoso emphasized that the naira’s value cannot improve without addressing fundamental forex issues. He noted an increase in Nigeria’s external reserves, which reached $39.07 billion as of September 19, 2024, marking a 17.4% increase from the previous year.
Cardoso stressed the need for diversifying the economy and boosting non-oil exports to enhance the naira’s value, stating, “Without the fundamentals in the right position, you will continue to sub-optimize.”
Former Kaduna Central Senator Shehu Sani has criticized the World Bank for worsening Nigeria’s economic difficulties. In a post shared on X, Sani accused the institution of projecting that Nigeria’s hardship would extend for another 15 years before the country could reach a better economic future. He questioned how many Nigerians would be left to enjoy that future, and how many African nations the World Bank has successfully helped to prosperity.
Sani’s remarks follow the World Bank’s latest *Africa’s Pulse* report, which forecasts that the Nigerian Naira will be among the worst-performing currencies in Sub-Saharan Africa by August 2024. The report placed the Naira’s decline alongside that of the Ethiopian Birr and South Sudanese Pound.
Heirs Insurance Group (HIG) recently announced impressive financial results for the 2023 fiscal year, marking significant growth across all key metrics. The Group’s Gross Written Premium (GWP) surged by 59.3%, from N19.9 billion in 2022 to N31.7 billion in 2023. This remarkable performance underscores HIG’s resilience and operational efficiency, further solidifying its position as one of Nigeria’s fastest-growing insurance firms.
Heirs General Insurance (HGI) saw a 77% increase in GWP, reaching N12 billion in 2023. HGI’s profit before tax (PBT) also rose by 203%, reflecting the company’s effective cost management. Similarly, Heirs Life Assurance (HLA) reported a 71% GWP increase and a staggering 395% rise in PBT. Both companies have demonstrated a strong commitment to customer satisfaction, disbursing billions in claims.
Beyond financial success, HIG actively engages in corporate social responsibility (CSR) projects, contributing over N100 million to education, community development, and financial literacy. With plans for future expansion and innovation, HIG is poised to remain a key player in Nigeria’s evolving insurance market.
Federal Capital Territory (FCT) Minister, Nyesom Wike, has called on Nigerians to fulfill their tax obligations, emphasizing that government revenue is essential for delivering social services. Wike made this appeal during the inaugural Abuja Business and Investment Summit, held in Abuja on Wednesday.
Speaking on the summit’s theme, “Optimising Investment Through Partnerships,” Wike stressed the importance of collaboration to generate investment opportunities. He dismissed the misconception that the government does not need revenue, explaining that taxes are crucial for funding public services.
Wike reiterated that both investors and the government must benefit from such partnerships, ensuring that both parties “go home smiling” through a fair exchange of services and taxes.
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