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Foreign Investors Want More Naira Devaluation

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International investors, dismayed by Nigeria’s decision to delay a naira devaluation they see as long overdue, will hold back from its stock and bond markets, raising risks of a deeper crisis in Africa’s biggest economy.

Reuters reported that the afterglow from March, when an incumbent president handed over power after what was seen as Nigeria’s freest ever election, is dissipating as new leader Muhammadu Buhari shows little sign of following up on promises of economic reform.

Markets have moved sharply in the past week in particular after the central bank announced curbs on dollar funding for investors, as well as for importers of goods ranging from toothpicks to private jets.

The move, meant to conserve foreign exchange, has dashed widely-held expectations of a naira devaluation – the central reform that investors had been banking on.

Since then 10-year bond yields have jumped 1 percentage point to almost 15 percent, stocks have fallen and the naira’s value is plunging in the parallel market, down about 7 percent from early-June levels.

According to Reuters, a devaluation to restore the economy to competitiveness is a matter of time, fund managers still believe. In the meantime, they are unlikely to bring back cash they pulled out before the election.

“It will take a combination of weaker currency and higher interest rates to get us back to Nigeria,” said Kieran Curtis, a bond fund manager at Standard Life Investments.

“When we compare Nigeria to other oil exporters it hasn’t had enough of a currency adjustment.”

With oil exports providing 70 percent of budget revenues, Nigeria can certainly use a cheaper currency. Most had reckoned on a 10-15 percent devaluation at least and some such as Curtis estimate a 20-25 percent move is probably needed.

The naira fell 20 percent in the year to February. Even so its real exchange rate, against currencies of trade partners and adjusted for inflation, is up than 50 percent in the past decade. link.reuters.com/ben53w

In real terms, currencies of oil-exporting peers Russia and Colombia are 5 and 17 percent respectively below long-term averages. African oil producer Angola also recently devalued its kwanza, which is down 15 percent to the dollar this year

And the price for supporting the naira is high – the central bank has spent at least $3.4 billion since fixing the exchange rate in February and reserves have fallen below $30 billion for the first time since 2005. http:link.reuters.com/huf76v

Devaluation expectations continue to mount. Non-deliverable forwards, derivatives used to hedge against future exchange rate moves, reflect expectations of currency weakening: six-month NDFs price the naira at 225 per dollar, while a week ago the forward price was around 215.

“To me, (central bank measures) are doing more harm than good: you are putting off the inevitable and the reaction you are seeing on rates markets and the NDF shows that,” said Kevin Daly, a fund manager at Aberdeen Asset Management.

“Effectively the bond market is starting to price in a much wider move on the currency.”

Curbing access to dollars may briefly stabilise reserves and constrict imports but pent-up demand for hard currency will eventually weaken the exchange rate and drains central bank coffers.

It may also stoke inflation if importers are forced to pay more for dollars. The naira trades at 230 per dollar in the black market, some 14 percent below the official rate.

With oil revenues down and borrowing costs rising, the 2015 budget is already 3.2 percent smaller than last year’s. By early May, the government had already exhausted half its borrowing allowance for the year.

Ten-year yields at almost 15 percent, 250 basis points above post-election lows, will raise borrowing costs for the government and the private sector.

“Ultimately (devaluation) will become more of a fiscal necessity than an external necessity. The longer they will take to do the adjustment, the bigger the adjustment would have to be,” said Antoon de Klerk, portfolio manager at Investec’s African Fixed Income Fund.

And crucially for investment flows, Nigeria’s place in the GBI-EM local currency debt index looks increasingly precarious.

JPMorgan warned in June it could eject Nigeria from its benchmark index by year-end unless it restores liquidity to currency markets in a way that allowed foreign investors to transact with minimal hurdles.

Nigeria has a 1.8 percent share in the $220 billion index, suggesting $4 billion in inflows, Morgan Stanley estimates, a major offset to its current account deficit.

“Were Nigeria to be removed from the index as a result of the dry-up in liquidity as forewarned by the index provider, upside risks to our naira forecast of 200-205 (per dollar) over the next 12 months could crystallise immediately, especially if one considers that its (annual) current account deficit could be up to … $10 billion,” Morgan Stanley said.


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HCSF Describes Galaxy Backbone as a Strategic Partner in Civil Service Digitalization Reforms

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In a significant move towards accelerating the Federal Government’s digital transformation agenda, the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack, paid a strategic working visit to Galaxy Backbone (GBB) Limited, Nigeria’s foremost ICT infrastructure and shared services provider.

The visit, which took place at GBB’s National Shared Services Centre (NSSC) and Corporate Headquarters in Abuja, forms part of the HCSF’s efforts to deepen collaboration and assess the technological infrastructure supporting the government’s ongoing digitalisation reforms across Ministries, Departments, and Agencies (MDAs).

Accompanied by the Permanent Secretary of the Federal Ministry of Communications, Innovation and Digital Economy (FMCIDE), Mr. Adeladan Rafi’u Olarinre, and a delegation of Permanent Secretaries and Directors from the Office of the Head of the Civil Service, the visit featured an extensive tour of GBB’s cutting-edge Digital Infrastructure facilities. These included its Network Operations Centre (NOC), Security Operations Centre (SOC), and Uptime Institute Certified Tier III Data Centre; all built to ensure a secure, scalable, and sovereign digital infrastructure for Nigeria’s public sector.

In his welcome address, Mr. Adeladan Rafi’u Olarinre described Galaxy Backbone as a critical institution under the supervision of FMCIDE, tasked with providing the nation’s core digital infrastructure and shared ICT services. “Today’s visit is an important opportunity to showcase the significant progress GBB has made in building the infrastructure necessary for a truly digital government,” he said.

“I believe this engagement will foster stronger alignment and collaboration between MDAs and GBB as we move towards a more connected and efficient public service.”

The Managing Director/CEO of Galaxy Backbone, Professor Ibrahim A. Adeyanju, expressed appreciation for the visit, noting its alignment with GBB’s mandate to support Nigeria’s digital transformation goals.

“A visit of this nature by the Head of the Civil Service is highly symbolic,” he remarked. “It reinforces the central role that the Civil Service plays in national development and highlights the importance of strategic ICT infrastructure in driving effective governance.”

He went on to emphasize that GBB’s mission to design, build, and manage Nigeria’s digital infrastructure aligns seamlessly with the Civil Service’s digital reform agenda.

“Our platforms; including the 1Government Cloud, GovMail, and our extensive fibre optic network present in 28 states, are designed to support a digitally enabled, secure, and efficient government,” Prof. Adeyanju added.

He also called for greater collaboration with the Office of the Head of Service to drive the adoption of GBB’s infrastructure, particularly the fibre optic connectivity already terminated at Federal Secretariat buildings across 28 states of the country. He further appealed for support in expanding Local Area Networks (LANs) in the Federal Capital Territory (FCT) secretariat buildings to integrate more MDAs into the digital ecosystem.

In her remarks, Mrs. Walson-Jack commended the world-class infrastructure and strategic digital solutions developed by Galaxy Backbone, stating that her perception of the agency had been greatly enhanced following the tour.

“This visit has opened my eyes to the enormous potential and capacity that Galaxy Backbone brings to Nigeria’s digital journey,” she said. “I now see GBB not just as an ICT agency, but as a strategic partner in the realisation of our dream to build a modern, agile, and paperless civil service.”

She specifically praised GBB’s support for the “War Room” initiative, the widespread deployment of GovMail — currently serving over 34,000 civil servants, and the agency’s high-speed fibre connectivity provided during the 2025 International Civil Service Week hosted by her office.

Reaffirming her office’s commitment to achieving a fully paperless civil service by December 31, 2025, the Head of Service expressed optimism that this goal is attainable with stronger collaboration and technical support from GBB.

She also highlighted several strategic areas where partnership with GBB is critical, including:

  • Full implementation of the 1Government Cloud to host and manage MDA operations.
  • Adoption of an Enterprise Content Management System (ECMS) to streamline records and workflow automation across MDAs.
  • Synergy between the 1Government Cloud Academy and the Civil Service Academy to enhance capacity development.
  • Training and onboarding of civil servants on innovative tools such as Service-Wise GPT – Nigeria’s AI-powered platform designed to transform public service delivery.

Mr. Mohammed Ibrahim Sani, Executive Director of Finance and Corporate Services at GBB, in his vote of thanks, expressed deep gratitude to the Head of Service and her delegation for taking the time to visit and engage with the team. He reiterated GBB’s unwavering commitment to partnering with all stakeholders to deliver inclusive, resilient, and forward-looking digital solutions for the Federal Government.

 


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Festive Seasons Trigger 400% Spike in Livestock Prices Across Nigeria’s North East — Moniepoint Study

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A new study by Moniepoint Inc., Africa’s leading financial technology company, has revealed that livestock prices in Nigeria’s North East markets surge by up to 400% during festive seasons, driven by high demand from cities like Lagos, Port Harcourt, and Onitsha.

The report, which focuses on informal market dynamics in Borno State, shows that traders at Kasuwan Shanu in Gamboru dispatch an average of 50 trucks daily during peak periods such as Eid al-Adha and Christmas, with goat prices rising by 400–470% and rams by over 230%.

Beyond seasonal spikes, the study highlights a shift toward investment-minded trading, where livestock is raised in advance to boost resale value. This approach is helping traders build more stable and profitable businesses, despite the region’s history of conflict and economic volatility.

Key findings include:

  • 51.2% of traders source goods from Maiduguri, reinforcing its role in Nigeria’s food supply chain
  • 45% of traders now accept digital payments, with mobile transfers and POS usage rising sharply since the 2023 cash crunch
  • Informal credit and trust-based transactions remain dominant, often conducted via phone calls and voice notes, without formal contracts

Moniepoint CEO Tosin Eniolorunda said the company’s tools are helping bridge long-standing gaps in access to finance: “This shift isn’t just tech-enabled — it’s structurally impactful. We’re helping build an economy where everyone can participate.”

The study joins Moniepoint’s growing portfolio of thought leadership on Nigeria’s informal economy, following previous reports on Onitsha Market, community pharmacies, and women-owned businesses.


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FG Eyes 8,000MW Power Boost in 18 Months with Grid Overhaul

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Federal Government has expressed optimism that improved management of the national power grid by the Nigerian Independent System Operator (NISO) could increase electricity supply to 8,000 megawatts within the next 12 to 18 months.

Speaking at a leadership retreat to onboard NISO’s top management in Abuja, the Director General of the Bureau of Public Enterprises (BPE), Mr. Ayodeji Gbeleyi, noted that although Nigeria’s installed generation capacity exceeds 14,000MW, actual daily output has hovered around 5,500MW.

Gbeleyi emphasized that with more efficient grid operations and increased investments in transmission and distribution infrastructure, the power sector is poised for substantial improvement.

“As an independent entity, NISO now carries the critical responsibility of managing the national grid with impartiality and integrity. It must ensure non-discriminatory access, efficient dispatch coordination, and fair market settlements—free from undue influence or conflicts of interest.

“Currently, about 5,500MW of power is being wheeled daily, compared to a nameplate generation capacity of over 14,000MW. With the right investments and enhanced grid resilience, it is realistic to project a 50% increase in supply within 12 to 18 months,” he said.

Gbeleyi also revealed that the Federal Government has secured a $500 million loan from the World Bank to support the upgrade of the distribution infrastructure. Under this initiative, 3.2 million electricity meters will be deployed across Nigeria, with an additional 2 to 3 million meters to be provided through a separate presidential initiative.

Chairman of the NISO Board, Dr. Adesegun Akin-Olugbade, stressed the significance of NISO’s independence following its unbundling from the Transmission Company of Nigeria (TCN).

“NISO is not just a new institution; it represents a new approach—an independent system operator, a neutral market coordinator, and a strategic planning authority. Our responsibilities span real-time grid operations, long-term system planning, and the development of the electricity market.

“These are not peripheral tasks—they are core to national stability. When power fails, everything else suffers: industry, healthcare, education, even security,” he said.

Also speaking, NISO Managing Director/CEO, Engr. Abdu Bello, affirmed that the 8,000MW target is achievable within the projected timeframe.

“We must stay focused, get our internal structures right, and attract private sector investment. This retreat is part of the strategic planning process. With a clear direction and commitment, the goal is within reach,” Bello stated.


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