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.”
Musty Mustapha, co-founder of Kuda, delivered a compelling keynote address titled ‘Start Small, Build Bold’ at the inaugural NACOSS TechFest on May 13, 2025, held at the University of Ilorin Auditorium.
Organised by the Nigeria Association of Computer Science Students (NACOSS), the event, themed ‘Tech for Good: Creating Solutions for a Better World,’ brought together students, industry leaders, and tech enthusiasts to explore how technology can create meaningful solutions for society.
In his address, Mustapha emphasised the transformative power of technology when grounded in empathy and purpose. Reflecting on Kuda’s journey, he highlighted how addressing real-world challenges like financial exclusion can lead to impactful innovations that resonate with everyday Nigerians.
“Technology isn’t just about what we build; it’s about who we build for,” Mustapha asserted, urging young people in tech to prioritise building solutions that bridge societal gaps instead of chasing fleeting trends. He stressed that genuine innovation stems from understanding and addressing the struggles of individuals, from students burdened by transaction fees to small business owners awaiting timely payments.
Reflecting on Kuda’s origins, he explained how the fintech’s founders identified a critical problem — the exclusion of millions of Africans from modern financial services — and decided to build a solution that was accessible, affordable, and suited to real-world needs. “Real innovation is based on empathy,” he emphasised. “Understanding real struggles is critical to making the world better.”
Mustapha encouraged the audience to keep empathy at the core of their work. “Whether you’re coding your first app, designing a product, or starting a company, ask yourself: Who does this help? What problem does it solve? How does it make someone’s life better?”
Mustapha’s call to action aligns with the broader potential of technology to drive economic change. According to a recent report by research agency, Public First, Artificial Intelligence, for example, is expected to contribute an estimated $15 billion to Nigeria’s GDP by 2030, reflecting a projected annual growth rate of 27.08 per cent from 2025 to 2030.
As Mustapha aptly concluded, “You don’t need permission to create something meaningful. All you need is a clear problem, a bold vision, and the courage to take the first step.”
Fidelity Bank Plc, has reentered the trillion-naira market capitalisation club, after its share price rose by 5.3%, climbing from ₦19.95 to ₦21.00 on May 13, 2025, according to data from the Nigerian Exchange Limited (NGX).
This latest development also brings the total number of Nigerian companies with a trillion-naira market capitalisation to 19.
According to a report published on Techcabal website, the bank had previously dropped below the threshold on May 12, marking another fluctuation in its valuation.
Earlier in the year, Fidelity Bank Plc first reached the trillion-naira milestone on April 4, 2025, joining tier-1 banks such as Zenith Bank, Guaranty Trust Holding Company (GTCO), Access Holdings, First HoldCo, and United Bank for Africa (UBA). However, it fell below the mark on April 7 before reclaiming its position on April 23.
With 50.2 billion outstanding shares, the valuation reflects renewed investor confidence and signals Fidelity’s potential transition to tier-1 status. Analysts believe the bank is well-positioned to meet the Central Bank’s ₦500 billion ($311.9 million) minimum capital requirement through equity.
“The strong Q1 results suggest continued upward momentum in its stock,” said Nabila Mohammed, an analyst at Chapel Hill Denham. “This could boost investor confidence and help sustain its valuation.”
The stock has surged 141% in the past year, up from ₦8.70 in May 2024. Meksley Nwagboh, Head of Brand and Communications, attributed the rally to a 189% rise in 2024 after-tax profit—the highest among Nigeria’s top 10 banks.
That momentum carried into 2025, with Q1 after-tax profit soaring 190% to ₦91 billion ($56.8 million), driven by higher interest income, forex gains, and cost efficiencies.
“Lower credit losses helped boost net interest income,” said Olamide, a Lagos-based banking analyst. “Combined with solid full-year results and dividend expectations, the bank’s fundamentals are attracting investors.”
A report from Proshare noted the NGX Banking Index gained 6.96% in Q1 2025, driven by recapitalisation efforts that injected ₦2.4 trillion into the sector. Fidelity was the NGX’s third most-traded stock between February and May.
According to Mohammed, Fidelity’s high net interest margin and low-cost deposit base enhance its appeal. On February 8, it completed the first phase of its capital raise with 237% oversubscription. CEO Nneka Onyeali-Ikpe confirmed plans to conclude the next phase before H2 2025.
The bank’s Vision 2025 agenda includes expanding internationally—starting with its 2023 acquisition of Union Bank UK—and securing tier-1 status.
Afrinvest projects continued growth, with gross earnings and pre-tax profit forecasted to rise 46% and 49.4% respectively in 2025, reaching ₦1.5 trillion and ₦415.4 billion. The firm maintains a 12-month target price of ₦21.60 for the stock.
With robust earnings, a solid recapitalisation strategy, and growing investor interest, Fidelity is positioning itself as a strong contender in Nigeria’s top banking tier.
FirstBank of Nigeria has announced an upward review of its transaction alert fee, raising the charge from N4 to N6 per SMS.
In a customer notice, the bank attributed the increase to the recent hike in telecom service costs by network providers.
“We understand that staying connected and informed about financial activity on your FirstBank account is crucial,” the bank stated. “Unfortunately, due to the recent increase in telecom service charges by service providers, the fee for our SMS transaction alerts has been adjusted from N4 to N6 per message.”
The bank acknowledged that the change may cause some inconvenience to customers but assured that efforts are being made to minimise the impact while maintaining service quality.
“We know that this change might cause you some inconvenience, but we are committed to minimising the impact of this change while we continue to provide you with the best financial services possible,” the message read.
The bank encouraged customers with concerns or questions about the adjustment to reach out through its official contact channels.
The adjustment comes at a time when banks are reviewing cost structures following increased operating expenses, including rising telecom tariffs and inflationary pressures across sectors.
The new SMS fee will apply per transaction alert received by customers.
However, some customers took to X (formerly Twitter) to criticise the move, especially at a time when other banks are reportedly scrapping similar charges.
An X user, @Tonyvyncent, wrote, “FirstBankngr have mercy. In a period when others like Sterling Bank are removing charges for customers, you’re increasing charges. No emotional intelligence.”
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