Optimism surrounding the clearance of Nigeria’s $7 billion foreign exchange backlog and improved market liquidity fueled a 3.68% week-on-week appreciation of the naira, closing at ₦1,474.78/$ last week, compared to ₦1,531.20/$ the previous week.
On Wednesday, Central Bank of Nigeria (CBN) Governor Olayemi Cardoso announced that the Federal Government had successfully cleared the backlog following a forensic audit verification. Speaking at the launch of Nigeria’s Regulatory Policy Framework, organized by the Presidential Enabling Business Environment Council, Cardoso expressed confidence that this move would ease repatriation challenges for businesses, multinationals, and foreign investors.
“This initiative has restored confidence among market participants and reinforced Nigeria’s commitment to honoring financial obligations efficiently. We have cleared the verified claims and are at the final stage of determining which remaining claims qualify for payment,” he stated.
As the naira strengthened at the official market, it also appreciated at the parallel market, rising 5.12% from ₦1,660/$ to ₦1,575/$ last Friday.
Analysts at Meristem Securities noted in their weekly macroeconomic report that clearing the backlog would help restore investor confidence, improve liquidity, and support market stability.
Business executives are already expressing confidence in the stability of the naira. Speaking at a PwC event, the CEO of Rainoil, Gabriel Ogbechie, emphasized that market predictability was crucial:
“The problem is not what the exchange rate is, but ensuring it is stable so businesses can plan.”
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, also highlighted that with this move, the CBN has reduced pressure on its reserves and created more room for stability.
“Clearing the backlog allows the CBN to better manage reserves, stabilize the currency, and ease inflationary pressures.”
With the forex backlog settled, analysts expect the CBN to continue stabilizing the currency, boost foreign reserves, and implement policies that reinforce investor confidence.
