E-Financial
Move Towards Exchange Rate Unification Positive – Report
A report by the FSDH Research has described recent move by the Central Bank of Nigeria (CBN) to achieve exchange convergence is positive, saying it would ensure clarity and improve market confidence in the economy.
The report also stated that the move would enable Nigeria to unlock funding from several multilateral organisations such as the International Monetary Fund (IMF) and the World Bank and ease the pressure on the exchange rate in the medium term.
It further stated that the central bank’s current move towards unified exchange rate was expected to ensure flexibility and market- determined rate, which it stated to a large extent would, reduce arbitrage, round-tripping and could move the naira towards its fair value.
“The CBN’s move is expected to instill confidence in the market as foreign investors are more likely to participate in a less fragmented market that can be fairly predictable.
“Given this framework, the options available for the CBN include raising the interest rates to incentivise inflow of capital into the economy that may hurt economic recovery in subsequent quarters or relax capital control rules/restrictions and simultaneously increase market interventions to prevent significant depreciation of the naira that may result in external reserves depletion,” the report stated.
It, however urged the CBN to follow up the move to unify the exchange rate with a set of consistent forex policies that would seek to improve market liquidity and prevent every form of foreign exchange arbitrage and unnecessary subsidies.
It also urged the CBN to clear forex backlogs, which the IMF estimated to be $2 billion in February 2021, to further instill confidence in the market.
The report, which was titled: ‘Nigeria’s Foreign Exchange Policy Note- Navigating through the Tides of Uncertainty’.
It added that: “As much as Nigeria needs effective management of foreign exchange and unification of exchange rate to boost confidence, the supply shortage of foreign exchange is still a major problem.
“Increasing foreign exchange supply from non-CBN sources is vital in maintaining exchange rate stability in the I&E window and reducing speculative activities.”
The report predicted that the CBN would be faced with, “policy trilemma” to explain Nigeria’s foreign exchange and monetary choices.
The ‘trilemma’ refers to the trade-offs a government faces when making crucial monetary policy decisions because only two out of the three objectives could be achieved at a time.
It added: “With COVID-19, Nigeria maintained the two objectives of having a fixed/managed official exchange rate and monetary autonomy at the expense of free movement of capital. This was evident in the capital controls and forex backlogs.
“The recent move by the CBN to adopt the I&E market rate as the official rate will enable the CBN to control interest rate while capital controls can be relaxed, but exchange rate will have to be flexible.
“Whether the naira appreciates or depreciates will depend on the level of capital inflows and outflows, CBN’s involvement in the market and the external reserves position.
“This means only way to maintain a stable exchange rate is to attract even more capital into the economy or intervene heavily in the forex market using the external reserves.”
It added that the planned issuance of Eurobond by the government would provide some relief in the market and boost external reserves in the short term.
However, from the fiscal and trade perspective, “Nigeria will need to leverage on the African Continental Free Trade Area (AfCFTA) agreement to boost non-oil exports and increase foreign exchange inflows.”
The FSDH also recommended that, “providing direct incentives for businesses to produce for exports by implementing port reforms as well as developing a comprehensive industrial and trade strategies would be important steps that the government must take.
“Our 2021 forecasts for key indicators include real Gross Domestic Product (GDP) growth of 1.3 per cent, an average exchange rate of N430/$ and an inflation rate of 16.6 per cent.”
Fidelity Bank Plc has recorded gross earnings of N315.4bn for the first quarter ended 31 March 2025, representing a 64.2 per cent increase from the N192.1bn reported in the corresponding period in 2024.
Nneka Onyeali-Ikpe, managing director and chief executive officer, Fidelity Bank,
According to the bank’s unaudited financial statements filed with the Nigerian Exchange Limited, the impressive performance was driven by significant growth in interest income, foreign exchange revaluation gains, and higher fee and commission income.
Interest and similar income calculated using the effective interest rate method rose by 58.1 per cent to N256.1bn in the period under review, up from N161.9bn in the same quarter of 2024.
Additionally, the bank earned N25.4bn from other interest and similar income, compared to N8.2bn in the corresponding quarter of the previous year.
Despite a 28.5 per cent increase in interest expense to N90.7bn from N70.5bn, net interest income climbed to N190.8bn, reflecting a 91.5 per cent growth from N99.6bn in the same quarter last year.
Fidelity Bank recorded a credit loss expense of N6.3bn, a decline of 49.2 per cent compared to the N12.4bn reported in Q1 2024. Consequently, net interest income after credit loss expense rose to N184.5bn from N87.3bn.
The bank also saw growth in its non-interest income. Fee and commission income increased to N23.8bn, up from N18.3bn in Q1 2024.
Foreign currency revaluation gains contributed N9.8bn to earnings, representing a 200.8 per cent increase from N3.3bn in the same period last year.
On the cost side, operating expenses remained elevated. Personnel expenses rose to N19.7bn from N14bn, while depreciation, amortisation, and impairment increased significantly to N8.7bn from N2.2bn. Other operating expenses also grew to N87.5bn from N52bn.
Despite the cost pressures, the bank posted a profit before income tax of N105.8bn, more than doubling the N39.5bn recorded in the same period last year. After a tax charge of N14.7bn, profit for the period stood at N91.1bn, marking a 190 per cent increase compared to N31.4bn reported in Q1 2024.
Earnings per share rose to 181 kobo from 98 kobo in the corresponding quarter.
The bank’s total comprehensive income for the period rose to N101.6bn, up from N35.8bn in Q1 2024, bolstered by exchange differences on translation of foreign operations and revaluation gains on debt instruments.
Securities and Exchange Commission (SEC) has uncovered another suspected illegal investment platform identified as TOFRO.COM (Tofro).
The commission raised the alarm in a notice issued on Thursday and made it available to the newsmen.
The commission warned Nigerians against falling for their tactics to obtain money from them through the promise of unusually high returns.
SEC said that the suspected investment platform holds itself out as a cryptocurrency trading platform, adding that such an investment scheme is not registered by the commission.
It said that based on its investigations, Tofro’s operations exhibit the typical indicators of a fraudulent Ponzi scheme.
According to the SEC, it promises unusually high returns, heavy reliance on a referral system to sustain payouts, and failure to honour withdrawal requests from subscribers.
SEC, however, strongly advised Nigerians to be wary about investing with Tofro, noting that any person who places such an investment with the entity does so at their own risk.
The notice reads, “The attention of the Securities and Exchange Commission has been drawn to the activities of an online platform known as TOFRO.COM (Tofro), which holds itself out as a cryptocurrency trading platform.
“The Commission hereby informs the public that the Tofro is NOT REGISTERED by the Commission either to solicit investments from the public or operate in any other capacity within the Nigerian capital market.
“Investigations have revealed that Tofro’s operations exhibit the typical indicators of a fraudulent Ponzi scheme, including the promise of unusually high returns, heavy reliance on a referral system to sustain pay-outs and failure to honour withdrawal requests from subscribers.
“Accordingly, the public is strongly advised to be wary about investing with Tofro, as any person who places such investment with the entity does so at his/her own risk.
“The Commission similarly reminds potential investors of the need to VERIFY the registration status of investment platforms via the Commission’s dedicated portal: www.sec.gov.ng/cmos before transacting with them.”
The Development Bank of Nigeria (DBN) has received shareholders’ approval to invest $2.5 million or 25% equity stake in the proposed Youth Entrepreneurship Investment Bank (YIB) — a new investment vehicle designed to provide equity funding to youth-led businesses in Nigeria.
The approval came during the bank’s 8th Annual General Meeting (AGM) which was held in Abuja.
The move is a strategic step aligned with the bank’s broader mission to support Micro Small and Medium Enterprises (MSMEs), job creation and entrepreneurship among Nigeria’s youth.
According to Tony Okpanachi, DBN Managing Director, Youth Entrepreneurship Investment (YIB) is not a conventional bank. It is an investment vehicle that will deploy equity into promising youth-owned enterprises.
“This is about backing ideas and unlocking growth through long-term capital — not debt,” Okpanachi told journalists after the AGM.
The initiative is a partnership between DBN, the Nigeria Sovereign Investment Authority (NSIA), and the African Development Bank (AfDB), with additional backing expected from development finance institutions.
The African Development Bank (AfDB) is currently in discussion to provide debt financing, which would bolster the capital available to the vehicle without diluting equity.
“This $2.5 million is DBN’s initial stake,” Okpanachi said. “We are co-investing alongside NSIA, and this sets the stage for broader institutional participation — both local and global.”
YIB aims to fill a critical funding gap in Nigeria’s startup ecosystem. While the country has a vibrant pool of young entrepreneurs, access to early-stage funding remains limited. Many businesses rely on short-term loans or informal capital, which often constrains scalability and long-term planning.
Okpanachi emphasised that YIB’s structure is deliberately designed to avoid the trappings of a traditional bank.
“This is not a commercial bank. It won’t provide loans or open retail accounts. It’s structured purely as an equity-focused investment vehicle, targeting scalable ventures with strong fundamentals and youth ownership”, he noted.
This will be DBN’s second strategic investment following the establishment of its wholly owned impact credit guarantee subsidiary, which offers partial credit guarantees to MSMEs.
Final structuring of YIB is underway. Following the shareholder greenlight, the promoters are now coordinating with the relevant stakeholders to complete incorporation, legal frameworks, and capital mobilisation.
“We expect all groundwork to be finalised by the end of this year. With operations likely to begin by early 2026,” Okpanachi disclosed.
The move comes amid growing concerns over Nigeria’s rising youth unemployment rate.
By investing directly into youth-led businesses, DBN and its partners aim to accelerate job creation, promote innovation, and catalyse broader economic development.
“There’s already strong interest from global players,” the MD noted, though he declined to name institutions due to ongoing negotiations.
“What we are doing is laying the foundation. YIB will serve as a credible, well-structured platform to crowd in institutional capital and scale youth-driven entrepreneurship.”
He added that YIB is not a one-off initiative but part of a long-term strategy to create sustainable investment channels focused on Nigeria’s demographic dividend.
“This is more than a financial transaction,” Okpanachi said. “It is a statement of intent. We believe in the entrepreneurial potential of Nigerian youth — and we are backing that belief with real capital.”
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