E-Financial
Reasons Naira May Hit N500 to $1 Before Year End- Otunuga
Lukman Otunuga, a research analyst at FXTM a keen follower of macroeconomic events, with a strong professional and academic background in finance, has once again predicted that certain external and internal factors may push the Nigeria’s currency vulnerability to dollar exchange rates even before the end of the year.
Well versed in the various factors affecting the currency and commodity markets, Otunuga, who was speaking Nigeria CommunicationsWeek recently in Lagos, said that depreciate in international oil price is principal among factors affecting the naira due to the mono-economic nature of the country.
He provides in-depth analysis on the global currency and commodity markets and isoften quoted by leading international media outlets such as: MarketWatch, CNBC, NASDAQ, Reuters, AFP, The Guardian and Yahoo.
Prior to joining FXTM, Otunuga spent two years as a research analyst with international currency broker FXCM, where he focused on technical and fundamental analysis of the global currency, commodity and stock markets.
Otunuga was also responsible for leading educational seminars for international and local high net worth individuals, and has published a series of educational articles on forex trading with City A.M.
Otunuga holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance, where he studied corporate finance, mergers & acquisitions and the role of international financial institutions.
Enjoy the chat:
When you heard, National Bureau of Statistics report that Nigeria’s economy has slide to recession, what first came to your mind?
“When I heard that the National Bureau of Statistics report that Nigeria’s economy has slip to recession, what first came to my mind was for extended period that oil price was down punished major oil-export dependent nations with Nigeria been a no exception.
“If we consider the fact that about 95% of export revenues and 70% of government revenue in Nigeria come from oil revenue, then you can understand why the nation has been under pressure. So, what has happened to Nigeria is both external and internal.
“Looking at the external factors, Nigeria is heavily oil export dependent. At the same time, even though dollar is not the legal tender in Nigeria, it has strong grip on the economy. Therefore, when you consider the global oil market and the dollar issues, they combined to put Nigeria under pressure.
With Nigeria’s mid-term policies, how quick can we come from the present recession?
“Well, we have to look at this from the short term and long term. Just last week, the even the Central Bank of Nigeria (CBN) decided to maintain the interest rate at 14%, despite the Finance Minister was saying that higher interest rates can actually act as barrier to the growth in future. Now, the CBN, on the short term is looking at price stability. In the month of August, inflation has climbed to 17.6%.
“So, I think the CBN is trying to see how the economy will fare in the Months of September and October before taking action. So, referring to the question, I think, on the short term, what the CBN can do is stay on the fence and watch how the Nigerian economy performs.
“On the long term, we have to fix our minds that a step has been taking towards diversification to agriculture and building of infrastructure. If these things are put in place, Nigeria could be back within the next two to three years.
You predicted that if CBN continued its policy direction with regards dollar restrictions, Naira will suffer in the market. That prediction has come to pass, Now, what in your view should CBN do differently?
“Yes, I remember that prediction. When I made that prediction I said that if the CBN was to delay de-peg of the Naira it will become deplorable over the natural forces of the demand and supply where equilibrium forces.
“That is what has happened. If you look at the Naira the official rate today naira is trading around N360 to $1 while the black market is around N420. So, I think even now, the Naira could be open to further losses, due to stronger dollar and weaker oil prices.
“There are still talks at the CBN which is why there is still gap between the official price and the black market. On what CBN should be doing, we have to keep in mind that the Naira is still affected by external factors- oil price. This entails that Naira could still be open to some losses in 2016.
Can you estimate how long (months, years) it will take Nigeria’s economy to flourish again BEYOND oil; that is, owing to Government’s decision to focus on Agriculture, technology?
“The way to diversification is best for Nigeria, but will take a very long time. Remember, Nigeria is made up over 160 million populations with youth the population quite high. One aspect of the diversification is agriculture, which is a better option to reducing food importation and export the surplus.
“When you look at agriculture, manufacturing, technology and building of infrastructure will help Nigeria live beyond oil exportation. For instance, in the West they produce oil and refine it instead of exporting crude only to import as oil later. So, this is something that can take years to achieve; I think four year minimum.
What Should CBN do with regards managing Bureau De Change (who are principal managers of dollar-naira exchange rates outside the banks)?
“I think the CBN could attempt that funds in this area be transferred through the CBN channels which will be used to manage the dollar-naira exchange.
The Federal Government of Nigeria has declared it intends to submit 2017 budget proposal to NASS as soon as possible, which sector, in your view, should have the lion’s share with regards to economic recovery?
“It goes back to what we have been saying. I feel the share should go to agriculture. No doubt, this is the time for Nigeria to diversify; and it takes time and money to get agriculture to a stable state. And when you have surplus, you export to boost your nation’s self reliance and foreign reserves.
“Another area of investment should be on infrastructure. We know that Nigeria’s infrastructure is weak and it takes a nation with strong infrastructure to easily galvanise all sectors for economic growth, especially manufacturing.
“Tourism could also be a huge industry to help in diversifying the economy. Let the government invest on roads to boost transportation of those agricultural produce and power. Power will enable SMEs heave sign of relief too and spring up surprises in technological advancements.
What is you prediction with regards how much Naira will exchange to Dollar by year end? What informed your view?
“For now, the main driver between the naira-dollar exchange rates as at today the dollar is domineering. The dollar may continue to strengthen against the Naira, because the U.S is working to strengthen its currency too. If this continues by year end naira may exchange for N500 to a dollar at the black market and N400 official rate.
In the face of the economic recession in the country, what is FXTM doing to help Nigerians (traders) on financial mastery/management?
“Good financial management is extremely important and this comes down to a person’s ability to successfully balance opportunities and risk with regard to their investments. When talking about forex trading, this means having in place a robust risk management strategy and acquiring an in-depth knowledge of the markets so that you can react accordingly to changing market conditions.
“These skills can be learnt and improved, which is why at FXTM we’ve really invested in trader education to ensure that Nigerians can achieve the most from their trading experience. We’ve recently held a number of highly successful educational events in Abuja, including a seminar on ‘The Ultimate Trading Formula’ and a 3-day afternoon trading workshop, and we’ll be holding similar events in Lagos in November. In addition, our local office also offers regular free educational training sessions.
Each week we hold a range of programs including: Basic, Applied and Advanced level financial market trading courses, a MetaTrader 4 Class and an investment seminar on how to trade with the FXTM Invest Program.
“FXTM was one of the first brokers to introduce the updated MetaTrader5 platform that offers hedging and we are seeing a lot of interest in that, so we will look to develop classes on that in the near future as well.
OneWallet microfinance Bank is partnering Zenith bank and MTN to build a platform that will provide digital financial services to support the growth of Small and Medium Scale Enterprises (SMEs) businesses in Abia State.
Dr. C Darl Uzu, Chairman of OneWallet, who disclosed this while launching the platform for traders at the Ariaria International Market, Aba, Abia State said it was meant majorly for traders and the SMEs because they are the bedrock of the Nigerian economy.
According to Dr. Uzu, “We want to expand the inclusion of small businesses in digital financial services by making it easy for them to make and receive payments on affordable digital devices, hence the UnionBell Smart phones and POS.
“We want to help SMEs to access financial support and loan easily to grow their business, and also help businesses to build the history and credibility they require for future growth and expansion.”
He said OneWallet was not created just as a payment application, but as a business support platform designed around the real needs of SMEs.
Dr. Uzu said the choice of Ariaria International Market as the pilot for the platform was intentional since the market is one of the strongest symbol of enterprise in Nigeria.
“We are not here however to teach Ariaria people how to trade because Ariaria already understands business, but we are hear to support Ariaria business energy with tools that can help businesses do more, reach more customers, organize better and prepare for bigger opportunities; we are here to help Ariaria innovate and grow.”
He thanked MTN, Zenith bank and the leadership of the traders for partnering OneWallet to provide the platform that help businesses to expand.
A representative of MTN at the launch, Dr. Ernest Chieke described OneWallet as a platform for individuals and SMEs which intend to move their businesses forward.
He expressed joy that his firm was partnering OneWallet to bring solution to SMEs’ financial problems.
Carl Akwarandu who represented Zenith bank at the event said the bank decided to partner OneWallet because it has a unique product that will make small businesses grow faster.
He promised that Zenith bank would give OneWallet all the support it needs to make it number one microfinance bank in the country.
The Director of OneWallet, Dr. David Nwosu described the microfinance bank a one stop-touch for SMEs growth.
He said at OneWallet, collateral are not needed to obtain loan, but the individual’s business history.
A member of the board of the microfinance bank, Wiedong Wang, commended Dr. Uzu for establishing OneWallet.
He expressed optimism that with the help of its partners, OneWallet will excel.
Central Bank of Nigeria (CBN) has warned non-interest financial institutions against governance and compliance risks capable of undermining public confidence and financial stability in the country’s growing Islamic finance sector.
Interest-free banks, often known as non-interest or Islamic banks, operate without charging or paying traditional interest (Riba).
The warning was contained in a press statement issued by the apex bank following the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts and the Advisory Committees of Experts of Non-Interest Financial Institutions held at the CBN Auditorium in Abuja.
Speaking through Dr Rita Sike, director of the Financial Policy and Regulation Department, Philip Ikeazor, deputy governor, Financial System Stability, said the rapid expansion of the industry had increased exposure to operational and regulatory vulnerabilities.
The statement read, “The Deputy Governor, however, observed that as the industry grows in size, sophistication, and interconnectedness, it faces unique risks, particularly non-compliance risk, governance challenges, operational vulnerabilities, and emerging technological risks.
“He warned that such risks, if not properly managed, could undermine public confidence, financial stability, and the overall credibility of the non-interest finance ecosystem.”
According to the CBN, the engagement was part of ongoing efforts to strengthen Shariah governance, improve regulatory clarity, and reinforce risk management standards within the non-interest financial services industry.
The apex bank noted that non-interest financial institutions continued to play an increasingly important role in Nigeria’s financial system by providing ethical and Shariah-compliant alternatives to conventional banking.
It stated that the institutions were also contributing to financial inclusion, real sector financing, micro, small, and medium enterprises development, and shared prosperity.
The CBN further explained that the establishment of FRACE and the mandatory constitution of ACEs across all non-interest financial institutions were designed to institutionalise a harmonised governance framework for the sector.
According to the statement, sustained interaction between FRACE and ACEs remained critical to ensuring that regulatory expectations were properly understood and consistently implemented across the industry.
“The objectives of today’s session include fostering the institutionalisation and effective operation of a robust Shariah governance system within Non-Interest Financial Institutions, and providing a structured platform for dialogue, knowledge-sharing, and collaboration,” Ikeazor was quoted in the statement.
In his remarks, Prof Bashir Umar, deputy chairman of FRACE, said the interactive session was aimed at strengthening governance within the non-interest finance sub-sector and promoting constructive engagement between regulators and industry advisory committees.
He also commended the management of the CBN for reviving the session, which was first introduced in 2014.
Earlier in her welcome remarks, Sike reaffirmed the apex bank’s commitment to building a strong and well-governed non-interest financial services industry.
She noted that the growing diversity of products and delivery channels, particularly the emergence of Islamic fintech, had increased the need for stronger regulatory oversight and continuous engagement among industry stakeholders.
“The growing diversity of products, institutions, and delivery channels, particularly with the emergence of Islamic fintech, underscores the need for continuous dialogue, sound regulatory oversight, and robust advisory input from scholars and practitioners,” she said.
The session featured technical presentations on Shariah non-compliance risks in non-interest banks and the role of Islamic fintech in driving financial inclusion.
Participants at the event included members of FRACE, chairmen and members of various ACEs, managing directors of non-interest banks, senior CBN officials, and representatives of the Bank of Industry and the Securities and Exchange Commission.
Federal government is in discussions with the World Bank over a proposed $1.25 billion loan facility aimed at supporting economic reforms, job creation, and competitiveness programmes across Nigeria.
A World Bank document titled Nigeria Actions for Investment and Jobs Acceleration showed the facility has moved beyond the concept and appraisal stages and is now scheduled for a decision meeting ahead of a planned Board presentation on June 26, 2026.
If approved, the loan would become Nigeria’s second-largest World Bank financing package after the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
The document listed the Federal Republic of Nigeria as the borrower, while the Federal Ministry of Finance will serve as the implementing agency.
It explained that the project is currently at the decision-meeting stage of the World Bank’s project cycle, where final appraisal documents undergo internal review before submission to the Board of Executive Directors for approval.
At this stage, the institution confirms policy actions, financing terms, and reform commitments already agreed in principle between Nigeria and World Bank teams.
It also said the proposed facility will support government efforts to expand access to finance, digital services, and electricity, while strengthening competitiveness through reforms in taxation, trade, and agriculture.
World Bank says loan will support finance, digital access, and electricity reforms
Between June 2023 and May 2026, the World Bank approved about $9.35 billion in loans and credits for Nigeria across key sectors including power, education, healthcare, agriculture, renewable energy, social protection, and MSME financing.
Major approvals during the period include the $2.25 billion RESET and ARMOR reform financing in June 2024, $1.57 billion for HOPE and SPIN programmes in September 2024, and $1.08 billion for education and resilience projects approved in March 2025.
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