The Central Bank of Nigeria (CBN) has implemented crucial measures to stabilize the foreign exchange market, including the launch of the Electronic Foreign Exchange Matching System (EFEMS) and the issuance of a $2.2 billion Eurobond by the Debt Management Office (DMO).
This comes as the National Bureau of Statistics (NBS) reported that Nigeria’s total merchandise trade increased to N35.16 trillion in the third quarter of 2024, up from N31.89 trillion in the previous quarter. Over the past week, the naira has strengthened, appreciating by more than N200 to around N1,500/US$, compared to the previous rate of N1,700/US$.
The $2.2 billion Eurobond issuance by the Debt Management Office (DMO) has delivered a vital boost of foreign capital to Nigeria’s reserves. The bond attracted strong demand, with the order book reaching $9 billion, drawing participation from global investors across North America, Europe, Asia, the Middle East, and Nigeria. The DMO has described the successful issuance as a clear sign of investor confidence in Nigeria’s macroeconomic policies, as well as its sound fiscal and monetary management.
The introduction of EFEMS, alongside the Eurobond issuance, has further strengthened the naira by automating foreign exchange matching and ensuring more efficient dollar allocation. EFEMS is expected to reduce market volatility and build confidence among participants, complementing other measures to stabilize the FX market, including policies to curb arbitrage and increase supply.
While the recent initiatives have provided temporary relief, experts warn that the long-term stability of the naira will rely on deeper structural reforms in Nigeria’s economic policies. Ongoing challenges, such as limited export diversification, heavy dependence on oil revenues, and a weak industrial base, continue to undermine the naira. To achieve lasting stability, analysts stress the need for policymakers to focus on boosting non-oil exports, attracting Foreign Direct Investment (FDI), and improving overall economic management.
