Nigeria to Relaunch Currency Trade Scheme After Setback – CBN

The Central Bank of Nigeria (CBN) has announced plans to relaunch its currency trade scheme as part of efforts to stabilize the foreign exchange (FX) market and strengthen the naira after months of volatility and mixed results from earlier policy interventions. The scheme, which initially faced operational challenges and policy bottlenecks, is being redesigned to improve transparency, increase liquidity, and attract greater participation from both local and international investors.

Speaking in Abuja, CBN Governor Dr. Olayemi Cardoso revealed that the bank has completed a comprehensive review of the earlier version of the currency trade initiative and identified critical areas for reform. He explained that the new framework would address issues of inefficiency, limited market access, and manipulation that previously undermined its objectives.

“The relaunch of the currency trade scheme represents a strategic step toward ensuring a more stable, transparent, and market-driven FX system,” Cardoso stated. “Our aim is to create a level playing field where genuine market forces determine exchange rates while ensuring sufficient liquidity to meet legitimate demands.”

The initial version of the CBN’s currency trade programme, launched in 2023, was designed to encourage exporters and investors to bring foreign exchange into the country through official channels. However, it suffered setbacks due to inconsistent policy execution, backlogs of FX demand, and a widening gap between official and parallel market rates.

According to Cardoso, the relaunch will feature a new set of guidelines developed in collaboration with key financial stakeholders, including deposit money banks, international trade institutions, and licensed bureau de change operators. The initiative will also leverage technology to ensure real-time monitoring of FX inflows and outflows.

“Our new model is anchored on transparency and accountability. All FX trades will be conducted through an upgraded digital platform to ensure traceability, reduce speculation, and promote confidence among market participants,” the CBN chief explained.

The apex bank is also working with the Ministry of Finance and the Nigerian Export Promotion Council (NEPC) to strengthen export proceeds repatriation, a major component of the new currency trade scheme. Exporters will be incentivized to bring their earnings through official channels with benefits such as priority access to foreign exchange, tax incentives, and credit facilities.

Cardoso noted that the new policy direction aligns with the broader macroeconomic reforms being implemented by President Bola Tinubu’s administration to boost investor confidence and attract foreign direct investment (FDI). “The government is determined to create a predictable, transparent, and efficient FX environment that supports growth in trade and industry,” he said.

The CBN’s move comes at a time when Nigeria’s FX market remains under significant pressure. Despite the naira’s recent modest recovery, analysts say the local currency continues to face structural weaknesses caused by high import dependency, low export diversification, and limited dollar inflows from oil sales.

Market experts have welcomed the planned relaunch but emphasized that its success will depend on the CBN’s ability to maintain consistency and transparency. According to financial analyst Dr. Muda Yusuf, “The idea of a currency trade scheme is commendable, but implementation must be disciplined. The market must be transparent, and interventions should not distort price discovery.”

He added that the participation of exporters, investors, and financial institutions would determine the sustainability of the initiative. “If properly managed, it could help reduce pressure on the naira and narrow the gap between the official and parallel markets,” Yusuf said.

Similarly, the Chief Executive Officer of Financial Derivatives Company, Mr. Bismarck Rewane, noted that the restructured scheme could improve dollar supply if confidence is restored. He, however, warned that Nigeria must also address underlying fiscal challenges, such as low oil revenue remittances and capital flight.

In preparation for the relaunch, the CBN has begun consultations with stakeholders across the financial sector to fine-tune operational guidelines and ensure seamless implementation. A pilot phase of the new system is expected to begin before the end of the year, targeting key export-oriented industries such as agriculture, manufacturing, and solid minerals.

Part of the redesign also includes improved access for small and medium-scale exporters, who often struggle to navigate complex FX procedures. The CBN plans to integrate them into the platform through simplified registration and compliance mechanisms.

The apex bank emphasized that the success of the new currency trade scheme would depend on the cooperation of all market participants and the adherence to fair market practices. It also reaffirmed its commitment to sustaining price stability and restoring macroeconomic balance in Nigeria’s financial system.

Economic observers believe that the relaunch could mark a turning point for Nigeria’s FX market if effectively implemented. By fostering transparency, promoting export competitiveness, and attracting foreign inflows, the policy could help strengthen the naira and boost investor confidence in the country’s economy.

As Nigeria prepares to reintroduce the scheme, the CBN insists it has learned from previous challenges and is ready to implement reforms that align with international best practices. “We are determined to build a credible, market-driven FX system that supports our national economic goals,” Cardoso affirmed.

 

With the new measures, analysts anticipate that the relaunch could help stabilize Nigeria’s foreign exchange market, restore market confidence, and lay the foundation for sustained economic recovery in the months ahead.