By Abigail David

The Central Bank of Nigeria has unveiled the fourth edition of its Foreign Exchange Manual, introducing new rules aimed at improving transparency, strengthening compliance and enhancing efficiency in Nigeria’s foreign exchange market.

The revised manual, which took effect on June 1, marks the first comprehensive update since 2018 and forms part of the apex bank’s broader reform agenda to restore confidence and deepen liquidity in the foreign exchange market.

Speaking at the launch, CBN Governor, Olayemi Cardoso, said the review became necessary due to significant changes in global and domestic economic conditions over the past decade.

According to him, foreign exchange remains a critical driver of price stability, trade, capital flows and investor confidence, making a modern regulatory framework essential for market efficiency.

Cardoso noted that ongoing reforms in the foreign exchange market required a more coherent and forward-looking framework capable of addressing emerging realities.

The Deputy Governor in charge of Economic Policy, Muhammad Abdullahi, described the manual as part of a wider strategy initiated by the current leadership of the apex bank to improve transparency, strengthen market discipline and encourage participation through official channels.

Among the key changes introduced are the harmonisation of Personal Travel Allowance and Business Travel Allowance transactions with revised Bureau de Change guidelines, with 75 per cent of such transactions now to be processed electronically and only 25 per cent allowed in cash.

The manual also increases allowable advance payments for imports from 15 per cent to 30 per cent, a move expected to provide businesses with greater flexibility in settling transactions with foreign suppliers.

To encourage exports, the CBN has removed charges associated with processing Form NXP and introduced new provisions covering service exports, technology-sector remittances and transactions under the Pan-African Payment and Settlement System.

Other reforms include the introduction of Non-Resident Investment Accounts and Non-Resident Ordinary Accounts, as well as approval for foreign companies in the extractive sector to repatriate 100 per cent of export proceeds.

The apex bank also removed the mandatory Form A requirement for remittances through ordinary domiciliary accounts, although authorised dealer banks will continue to verify the legitimacy of transactions.

In addition, the revised guidelines permit tuition fee payments of up to $25,000 per semester for Nigerian students studying abroad and allow transfers between export proceeds domiciliary accounts and ordinary domiciliary accounts under specified conditions.

Commercial banks welcomed the reforms, describing them as a continuation of efforts to build a transparent and rules-based foreign exchange market.

Group Managing Director of United Bank for Africa, Oliver Alawuba, said the revised manual would reinforce transparency, ethical conduct, stronger documentation and improved oversight within the market.

Similarly, Group Managing Director of Access Holdings Plc, Roosevelt Ogbonna, said the framework would reduce ambiguity and promote market discipline among participants.

Representing the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, Permanent Secretary for Special Duties, Mohammed Danjuma, described the manual as an important component of Nigeria’s economic reform agenda aimed at promoting macroeconomic stability and sustainable growth.

Analysts say the success of the revised framework will depend largely on consistent implementation, effective enforcement and sustained policy stability across the financial system.

Airtel Africa has recorded a strong performance on the Nigerian Exchange (NGX), emerging as one of the most resilient large-cap stocks following a 10 per cent weekly gain that strengthened investor confidence in the telecommunications giant.

The company closed the trading week at N3,655.70 per share, rising from N3,323.40, making it one of the key drivers of market performance during a period marked by selective trading and cautious investor sentiment.

The performance reflects renewed confidence in the fundamentals of Airtel Africa Plc, supported by its diversified revenue base, strong regional presence, and long-term growth strategy across multiple African markets.

Market analysts say the telecoms firm continues to attract investors seeking stable, high-quality equities capable of delivering consistent returns amid macroeconomic uncertainty.

Unlike speculative gainers in the same trading period, Airtel Africa’s upward movement was driven largely by expectations of sustained earnings growth, foreign currency-linked revenues, and its dominant position in Africa’s telecommunications sector.

The company operates in 14 countries across sub-Saharan Africa, offering mobile voice, data, and mobile money services to more than 156 million customers, positioning it as a key player in the continent’s digital economy.

Investor interest has also been boosted by the company’s continued investments in network expansion, digital infrastructure, enterprise solutions, and financial inclusion services, all of which are seen as critical to Africa’s growing digital transformation.

These strategic initiatives have helped reinforce Airtel Africa’s reputation as a stabilising force on the NGX, particularly at a time when investors are becoming more selective in capital allocation.

Beyond its stock performance, the company’s broader impact on connectivity and digital access continues to shape economic activity across the region, supporting businesses, governments, and individuals through improved communication and mobile financial services.

Airtel Africa’s latest market performance underscores confidence in its long-term outlook and its ability to sustain shareholder value creation.

The company’s Nigerian arm, Airtel Nigeria, remains a key driver of its regional operations, offering telecommunications and mobile money services to millions of subscribers.

Overall, the strong showing on the NGX reflects growing recognition of Airtel Africa’s role in driving digital inclusion, innovation, and connectivity across the continent.

The International Monetary Fund (IMF) has cautioned governments against the use of broad subsidies, price controls, and tax cuts as tools to address rising food and energy prices, warning that such measures could worsen inflation, strain public finances, and deepen global supply challenges.

In a May report titled “Responding to the Energy and Food Price Shock: Getting the Policy Details Right,” the Fund said policymakers face a difficult balance between protecting households and maintaining fiscal stability.

“When global energy prices spike, governments face an unenviable dilemma: shield people and businesses while straining already reduced room in public budgets or let prices rise for everyone and risk social and political backlash,” the IMF stated.

No One-Size-Fits-All Solution

The IMF noted that there is no universal response to food and energy price shocks, as countries differ in fiscal capacity, market structure, import dependence, and social protection systems.

However, it stressed that governments should allow domestic prices to reflect global market conditions, while providing targeted support to vulnerable households.

“Fiscal measures have a role to play, but they need to be temporary, targeted, timely, and tailored,” the report said.

The Fund described the current situation as a negative supply shock, where rising prices reduce purchasing power while also slowing economic activity.

Warning on Broad Subsidies and Price Controls

The IMF strongly discouraged the use of blanket subsidies, fuel tax cuts, and price caps, arguing that they are often inefficient and financially unsustainable.

According to the report, such interventions tend to benefit higher-income households more than poorer ones while distorting market signals and worsening shortages.

“Energy tax cuts, price caps, or general subsidies mute the important signals from prices, usually benefit higher-income households more, and are hard to phase out,” it said.

The Fund warned that these policies can quickly escalate fiscal costs and increase pressure on global prices by boosting demand artificially.

It added that full price freezes should be avoided except in rare and highly specific circumstances.

Targeted Support Recommended

Instead of broad interventions, the IMF recommended targeted cash transfers as the most effective way to protect vulnerable households.

It noted that lower-income families typically spend a larger share of their income on food and energy and are therefore more exposed to price shocks.

“Protecting them is important to preserving social cohesion and avoiding a surge in poverty,” the report said.

Where social safety nets are weak, the IMF suggested temporary expansion of welfare programmes or one-off support payments.

For businesses, the Fund recommended short-term liquidity support such as credit facilities, tax deferrals, or government-guaranteed loans, rather than direct subsidies.

Risks for Developing Economies

The IMF warned that emerging and developing economies face greater challenges due to weaker safety nets, higher debt burdens, and limited fiscal space.

It also noted that policy decisions in wealthier countries can have global spillover effects.

“When larger or richer countries suppress domestic price signals, global demand rises, international prices increase, and shortages worsen, hurting poorer importing countries the most,” it said.

Policy Direction

The Fund urged governments to adopt a disciplined and phased approach, prioritising targeted interventions before considering broader measures.

It stressed that well-designed policies can help economies adjust to shocks without creating long-term distortions or undermining fiscal sustainability.

“The key question is not whether to act, but how to act effectively,” the IMF concluded.