“The biggest challenge we have in Africa as oil-producing countries is funding, so a short while ago, the council held a meeting and said the solution was the Energy Bank,” Nigeria’s minister of state for petroleum (oil), Heineken Lokpobiri, said at the July APPO meeting in Abuja.

Afreximbank and the African Energy Foundation are also contributing funding. Yet whether AEB’s capitalization is enough to bridge the industry’s funding gap remains to be seen.

“AEB is a wonderful idea, but as with everything African, it will face some challenges, even if they are just teething problems,” says Marcel Okeke, a former chief economist of Zenith Bank.

He wonders where the AEB would find additional capital if needed. Okeke suggests that it could force the bank to approach non-African investors, perhaps in the form of the African Development Bank, which has non-African members.

Investors consider several factors, including safety and macroeconomic challenges, before deciding where to invest. In Nigeria, investment in the oil and gas industry took a steep dive from 2014 to 2022, from $27 billion to $6 billion, the Nigerian Upstream Petroleum Regulatory Commission said last year.

Some international oil companies have left the country, citing a tough business environment and economic insecurity. “Insecurity in Nigeria is chasing investors away, and the oil and gas industry has become inclement,” says Okeke, who added that this is happening in other African countries, too.

He also notes that the world is going through an energy transition whereby hydrocarbon alternatives are rising in popularity. At the same time, oil and gas have become political hot potatoes, which doesn’t favor the bank. “This is why alternative energy could become the focus of the energy market, rather than fossil fuel. Therefore, the reality is that those who would have cooperated with the bank may not,” says Okeke.

“We are going to adopt blockchain technology to ensure that all data and transactions in the government space are transparent and tamper-proof,” said Vice President Mahamudu Bawumia at the May 14th Commonwealth Regional Conference and Annual General Meeting of Heads of Anti-Corruption Agencies in Africa.

Ghana’s previous plan, Revenue Assurance and Compliance Enforcement, was designed to identify and eliminate revenue leakages in areas such as petroleum bunkering, gold and minerals exports, port operations, transit goods, warehousing, border controls, and free zone operations.

 “Implementing blockchain technology to safeguard government revenue involves creating a transparent, secure and efficient system for managing and tracking revenue and expenditure,” says Arthur Augustus, a senior software engineer at Lagos-based fintech vendor Parthian Partners Limited.

By harnessing blockchain’s immutability, decentralization and transparency, African governments can significantly reduce fraud, improve tax compliance, and ensure efficient use of public funds. This, in turn, will lead to better governance and increased public trust, according to Augustus.

“Government procurement processes can be managed using smart contracts, ensuring that contracts are awarded and executed based on predefined criteria. Also, blockchain can be used to track the supply chain of goods and services procured by the government, ensuring that there is no misreporting in the supply chain,” he said.

These automated contracts ensure that all parties compete fairly and that the most suitable vendor is selected while allowing for proper tracking along the supply chain. They also ensure that goods and services are delivered as specified and prevent fraud and misreporting. According to Augustus, governments must prepare for the downsides of this innovation, including data privacy issues, environmental effects, and resistance to change. He added that they can mitigate these challenges by investing in technical expertise, creating robust legal frameworks, and ensuring that the transition to blockchain is inclusive and sustainable.        

The new requirements are to ensure banks have a robust capital base to absorb unexpected losses and the capacity to contribute to the growth and development in Nigeria, the central bank said, after the government set a goal of a $1 trillion economy by 2030.

Bigger banks with larger capital bases and capacity “can underwrite larger levels of credit, which is critical to lubricate and catalyze the economy’s growth,” it said.

The regulator set the new capital base for commercial banks with international licenses at 500 billion naira (up from 50 billion, or $36.5 million) while the requirement for national and regional lenders went up to 200 billion and 50 billion naira, respectively (from 25 billion and 10 billion). Non-interest lenders’ capital was raised to 20 billion naira, and 10 billion naira for regional licenses (from five billion).

Options for meeting the requirements include injecting fresh capital through private placements, rights issues and/or offers for subscription; mergers and acquisitions; and/or upgrades or downgrades of license authorization. Additional Tier 1 capital will not be eligible, the central bank said.

Recapitalization is “a necessary evil in an economy experiencing exchange-rate volatility and high inflation,” says Damilare Asimiyu, macroeconomic strategist and head of research at Lagos-based Afrinvest Consulting. The naira has fallen from 129 to the US dollar 2005, when Nigerian banks last raised the capital bases, to more than 1,100 to the dollar currently, slashing value of banks’ assets. All the Tier 1 lenders will likely scale through, Asimiyu predicts. Lenders in this group are known collectively by the acronym FUGAZ, for First Bank, United Bank for Africa (UBA), Guaranty Trust, Access, and Zenith. “They will raise the funds cleanly.” Among the Tier 2 banks, he expects to see consolidation. Some of the FUGAZ group have already begun making their moves. UBA has announced it will seek shareholders’ permission on the 24th of this month to raise fresh capital through rights issues and private placements. Zenith’s shareholders were slated to meet on May 8th to authorize it to raise capital in the Nigerian or international capital markets, the bank said in a statement. Guaranty’s board has proposed raising $750 million through public offerings and private placements.      

Nigeria’s population of over 227 million makes it Africa’s biggest market. However, to attract and retain the investment needed to realize its potential, close observers say the country must tackle a treacherous landscape that includes macroeconomic imbalances, a difficult business environment and banditry that threatens both agricultural and industrial production.

“When the government succeeds in handling the problem of insecurity, it will be part of the attraction for investors to come in, because the market is still here in Nigeria,” says Marcel Okeke, former chief economist at Zenith Bank, the nation’s largest lender by market capitalization.

 Some important changes are already underway. At his inauguration last May, President Bola Tinubu announced the removal of subsidies on gasoline. In June, the Central Bank of Nigeria followed with the flotation of the naira, aiming to eliminate multiple exchange rates. Together, the changes triggered a price spiral, pushing headline inflation to 29.9% in January, the highest in 29 years.

The naira depreciated on both official and parallel markets, falling to an all-time low of 1,551.24 naria to the dollar oas of February 20 on the official Nigerian Autonomous Foreign Exchange Market, lower than N1,488 on the parallel market the same day. Corresponding rates on these markets last June were N462 and N750 to the dollar, respectively.

The currency flotation “was just like throwing the naira into a boxing ring alongside the dollar, the pound sterling, the euro, and such other hard currencies,” says Okeke. “Within a few minutes, the naira was knocked down.” Thus, he adds, a new strategy must answer the questions of how to increase the dollar supply and to increase foreign exchange inflow.

The government argues that the two measures are already yielding positive results.  “We are saving money on fuel subsidy removal; we are saving money on naira liberalization against the dollar,” says Tope Fasua, special adviser to the president on economic affairs, in the Office of the Vice President. “For every receipt coming into the country in dollars, we are getting a lot more naira.”

Additionally, the central bank has proposed a bank recapitalization exercise, so that banks can help support the president’s announced goal of raising Nigeria’s GDP to $1 trillion by 2033. Recapitalizing the banks is imperative because the naira’s devaluation has reduced local banks’ global competitiveness, Okeke says. Pabina Yinkere, business head of asset management at Norrenberger, an Abuja-based integrated financial services group, notes that, since the last time the central bank set a minimum capital base, the largest category of commercial banks with international operations—those with N50 billion or more in assets—the Nigerian banking industry has shown nearly 50%: growth that is further buoyed by a weakening currency. 

But recapitalization in isolation will not transform the economy, says Damilare Asimiyu, macroeconomic strategist who is  head of research at Lagos-based Afrinvest Consulting. “Even if the banks raise the capital base, inefficiencies in the other sectors could neutralize the gain,” he argues. “This is because the operating environment in the real sector must be conducive and opportunities therein must be bankable with manageable risks.”

In January, the International Monetary Fund projected Nigeria’s economy would grow 3% this year. However, the IMF cautioned, Nigeria faces a growth slowdown, poverty and food insecurity, stalled per-capita growth, and difficulties raising revenue. It sees actual nominal GDP per capita on a downward slope over the current three-year period, dropping from $2,202 in 2022 to an estimated $1,669 in 2023 to a projected $1,219 in 2024. Nigeria exited the Covid-19 recession quickly, “ but growth, held back by the hydrocarbon economy, is barely keeping up with population dynamics,” the IMF warns.

Still, the IMF analysts add, “If the authorities succeed in developing and implementing a comprehensive reform agenda, the medium-term outlook would be much improved.” High inflation, including food prices, reflects the removal of the fuel subsidy, exchange rate depreciation, and poor agricultural production. Nigeria currently faces a food crisis that has led to protests.

Nigeria’s diversified economy, together with a wealth of untapped natural resources, continues to make the country an attractive investment opportunity, says Yinkere. The government currently invites investors into its mining sector, boasting of deposits of gold, bauxite, bitumen, lead, and zinc, among others.

“Many sectors are in their infancy, suggesting that there is room for much growth,” he says. “Nigeria’s per-capita consumption on so many items underscores the huge investment potential.”

But tapping that wealth remains a challenge. The headline issues is physical insecurity in the form of banditry and kidnapping for ransom. Since the government’s war with the Boko Haram jihadist insurgency began in earnest in 2009 in the northeast, violence has spread to all parts of the country. Armed bandits operate on highways and in villages and farmlands, holding victims for ransom payments or killing them.

“That new constituates an existential threat to the agricultural sector, for example,” says Okeke, noting that it has contributed to the rise in food prices in Nigeria.

Theft of crude oil, the country’s major export, is contributing to a dwindling of foreign exchange earnings. The IMF forecasts a drop in foreign reserves to $23.8 billion this year from $36.6 billion in 2022. Yinkere contends that to attract foreign capital, the government must “intentionally embark on reforms that will open up sector opportunities and position the economy as an investment haven for both foreign direct investment and foreign portfolio investment.”

Yet some foreign companies have left Nigeria in the past year, a development that close observers blame on a harsh business environment.

Among the major departures was GlaxoSmithKline Consumer Nigeria (GSK), the second-biggest pharmaceutical company in the country, which exited in August, 51 years after it began operating in the country, due to foreign exchange-related challenges and high operating costs. Procter & Gamble suspended its in-country manufacturing in favor of importation, blaming macroeconomic challenges for its decision.

Another loss was Sanofi, the French pharmaceutical company, which ended in-country manufacturing and appointed a representative to distribute its drugs in Nigeria. In the oil and gas industry, Shell announced in January that it had concluded a deal to sell its onshore business in the Niger Delta to a consortium of companies in a $2.4 billion deal.

Chalk these lost investments up to “exchange rate volatility and runaway inflation,” says Afrinvest’s Asimiyu, while economist Okeke blames an “asphyxiating” business environment. “They are choked out of existence,” he says, “so they give us all kinds of excuses.”

The causes of these pullouts are more complicated, presidential adviser Fasua counters. “Many of the companies are leaving based on their strategies,” he says, citing GSK’s exit from Kenya just four months after leaving Nigeria.

Instead of seeing the companies’ exit as a problem, Nigerians should look at the development as an opportunity, he suggests.

“By now, many of our pharmaceutical companies should be able to step up,” Fasua says, “and I see it as an opportunity for many companies that want to go into that business. Why are we twisting the narrative that the economy is dying?”

While he agrees that some of these exits were strategic decisions, Yinkere insists that Nigeria’s difficult operating environment hastened some of them. To halt the outflow, he wants the government to focus on macroeconomic stability and creating a friendlier business environment. “The high inflation and currency challenges must be addressed to stir investor confidence,” he says.

Yinkere expects the central bank to maintain a tighter monetary policy, at least in the first half of the year in the face of high inflation and currency challenges. This is in line with position of the IMF, which sees “continuing to raise the monetary policy rate until it is positive in real terms [as] an important signal of the direction of monetary policy.” Nigeria’s monetary policy rate was 18.75% in January and rose to 22.75% in late February.

Fasua counters that Nigeria has “overused our monetary policy.” The authorities need to be careful how much they raise interest rates, which could slow down the economy and precipitate a recession. “We don’t want to go there.” Fasua says.  “We need growth.”

On the fiscal side, the government has set up a Presidential Fiscal Policy and Tax Reforms Committee to make proposals for raising domestic revenue to support investments in infrastructure, health, and education. The hope is that the committee will come up with actionable proposals to generate more revenue in 2024 and beyond.

Access Holding is the parent company of Access Bank, Nigeria’s biggest lender by customer base. Previously, Agbede, whose appointment is subject to approval by the Central Bank of Nigeria, was the company’s most senior founding executive director, in charge of Business Support.

She began her professional career in 1992 with Guarantee Trust Bank, then becoming CEO of JKG, a business consultancy, in 2003.

Joining Access Bank in 2003, she rose to manage the bank’s portfolio of chemical trading companies, then served as head of Group Human Resources before becoming executive director of Business Support two years ago.

“She has a track record of successful people integration in business combination and culture transformation,” Access said in a statement.

Access operates in 21 countries on three continents and has over 65 million customers.

In 2022, it adopted a holding company structure, as many other Nigerian lenders have done, in compliance with the central bank’s regulation that they either focus on their core banking business or create a holding company to accommodate other services.    

Production began on January 12, with aviation fuel and diesel, after a series of delays and postponements. With a 650,000-barrel-a- day refining capacity for crude oil, the plant, owned by Africa’s richest person, Aliko Dangote, is Africa’s biggest and the world’s largest single-train refinery.

Nigeria is a member of OPEC, yet Africa’s biggest economy is often shut down by shortages of gasoline and other refined products and attendant price hikes. Protests by labor unions usually follow.

The new plant promises to change all this, analysts say, by raising production with the addition of gasoline and kerosene. The refinery will be “a game changer in Nigeria’s oil and gas sector and the macroeconomic environment,” says Muda Yusuf, an economist and chief executive of the Center for Promotion of Private Enterprise in Lagos.

Increased domestic supply of refined petroleum products will cut Nigeria’s demand for foreign exchange by about a third, owing to the reduction in the demand for imports, Yusuf predicts. This will help lower inflation, currently 28.9%.

Nigeria’s four state-run refineries, with a combined capacity of 450,000 barrels per day, have remained moribund for years. President Bola Tinubu, upon taking office last May, removed a subsidy on gasoline that had kept prices low, leading to a spike in prices and an inflationary spiral.

“The refinery is the loudest statement on the transformation of the Nigerian oil industry from a failed state-led extractive or primary product export industry to a private sector-led, value-adding diversified industry,” says Joseph Nwakwue, a partner at Lagos-based Zera Advisory & Consulting.

The Dangote plant will give Nigeria “all the obvious benefits of local crude oil refining,” he adds, “including provisions of local jobs, enhanced process plant capabilities, reduction in product import, and hence, reduced forex demand, and a diversified outlet for Nigeria’s crude oil.”

One variable remains: Nigerian National Petroleum Company Ltd, previously a state-run corporation, holds a 20% stake in the new refinery. The success of the new plant, Yusuf says, will depend on an uninterrupted supply of crude from NNPCL.

Côte d’Ivoire, the world’s top producer of cocoa and third-largest supplier of cashews, enters the new year with optimistic growth expectations. The World Bank projects a GDP growth rate of 6.5% in 2024 and 2025, while the International Monetary Fund (IMF) anticipates similar gains.

The World Bank adds that continued investment in network infrastructure, especially in the digital and transport sectors, as well as recent oil discoveries, alongside prudent macroeconomic policies, will boost business confidence and productivity in the country.

The outlook and expectations for the Ivorian economy in 2024 depend on political stability, economic reforms, and global conditions, according to Stéphane Eholie, founder and CEO of Ivorian transport and logistics company Societe Ivoirienne de Manutention et de Transit (Simat).

“The country is experiencing one of the fastest economic growth rates in sub-Saharan Africa,” he notes. “After the Covid-19 pandemic, the country has returned to strong growth and continues to have an important role as a regional economic hub.” Growth is expected to return to the pre-Covid era, when the economy achieved rates of up to 8%.

Yet, such expectations are subject to significant downside risks, mainly due to the Russia-Ukraine conflict, which has caused currency and inflation fluctuations.

In a December 8 statement announcing a $300 million aid package, the World Bank noted that “limited competition in key sectors, such as transport, financial services, and telecom, hinders private sector investment.” The bank also notes a need “to improve service delivery and build human capital, reduce spatial disparities, and address environmental concerns, including coastal erosion and deforestation.”

Meanwhile, several foreign companies operate in various sectors of the economy. Cargill, the global agricultural industry leader, operates cocoa processing facilities in the country, the largest producer of this commodity. In 2021, it completed a $100 million expansion of cocoa processing facilities in Yopougon.

Olam Group, the international food and agribusiness company, also operates in the country, sourcing cocoa, rubber, cashews, and cotton, among other commodities. TotalEnergies is the nation’s largest retailer of petroleum products. Recently, it acquired an offshore license and has begun exploration and production activities. Similarly, Vivo Energy, a Shell brand, has been in the country since 1927.

Others include Societe Generale, the French multinational investment bank and financial services company; Orange, a French international telecom company; and Unilever, a British global consumer goods company.

The country’s political stability has been tested by Jihadist strife in the northern region bordering Burkina Faso, which has led to the displacement of locals and the creation of humanitarian challenges.

In 2025, Côte d’Ivoire returns to the presidential polls, which will test whether the nation can avoid the tumult of the 2020 election, which was boycotted by leading opposition figures.

“There is no problem. Ivorians have had enough of problems,” says Achonu. “With the level of development going on in the country, the people are happy.”

Africans are enterprising people with a zeal for starting and running businesses. With a population exceeding a billion people with a high youth segment, labor is not a problem. But without capital to start them, launching new businesses is a challenge.

 “The problem of capital is not even the lack of it; it is the price of it. Capital in Africa is very expensive because inflation is very high,” says Emeka Ucheaga, CEO of EUA Intelligence, a Lagos-based financial consulting firm with expertise in macroeconomic and global market analysis.

In Nigeria, inflation is currently 24%; in Ghana, it is 32%; and in Angola, 12%. This explains the high interest rates prevalent in most of the continent. In Nigeria, Africa’s biggest economy, the monetary policy rate—the rate at which the central bank lends to banks—is 18.75%.

Sourcing capital from outside the continent is also expensive because the minimum internal rate of return that investors demand must give them a significant premium above the currency devaluation rate. Many African currencies have come under pressure due to low or unstable foreign earning capacities. In Nigeria, the naira fell by nearly 40% on June 14, when the central bank floated it, and has fallen further since then. In Ghana, the cedi has depreciated by about 35%.

Because of the difficult business environment in Africa, Ucheaga says, investors wishing to start generating profits early and at rates higher than currency depreciation may have to invest in several companies. These challenges are further compounded by inadequate infrastructure, and insufficient government support for businesses, he adds.

This creates a vital role for venture capital, Ucheaga argues.

“The only people who will be willing to wait for you to punch through all these harsh economic climates, be patient with you to gradually start raising profits in years to come and give you that technical expertise of best practices internationally, now become VCs,” he says.

But Africa’s venture capital ecosystem faces a funding gap that needs to close before a new wave of fast-growing companies can materialize on the continent. VC means investing in one’s own business or taking a high ownership percentage, says Rossie Turman, chair of the International Finance practice and co-chair of the Africa practice at Lowenstein Sandler, a New Jersey-based law firm.

“That matches up well with a slow-growth business or a medium-growth business,” he says, “but that doesn’t go well with a high-growth business where the expectation is that the people who are doing the work are going to have a meaningful ownership.”

Opening a path for foreign VCs on the continent will require African entrepreneurs to give up significant stakes in their businesses—more so than in economically more developed countries—to get the capital they need, says Ucheaga.

What African governments, policymakers, and long-term African investors need is to develop their own models, for which they will invest in the VC ecosystem, Turman contends.

According to figures compiled by the African Private Capital Association (APCA), foreign venture capital investment into the continent in the first half of 2023 fell roughly 40%, with only $2.1 billion worth of deals occurring throughout the continent compared to $3.5 billion raised in the same period last year.

“The drop in Africa VC echoes the drop-off we saw globally,” says Turman. “We had a pullback then and Africa has definitely seen that drop in the last two quarters.’

Additionally, African entrepreneurs must decide whether pursuing venture capital makes sense for them. Some small to midsized firms have potential to burgeon into high-growth companies and some may not; but if VC suppliers are going to invest, it must be in high-growth companies, says Turman.

Some foreign VCs lack a proper understanding of the African venture capital ecosystem, Turman adds, while carrying “all the biases that are out there regarding Africa.”

That said, foreign VCs are understandably concerned about the political and legal system of any country they want to invest in, notesAustin Nweze, who teaches economics at Lagos Business School.

“They are looking for political systems that are benign or semi-benign,” he says, “because without proper political stability, it’s a bit difficult for the economy. As you look around, how many African countries have political stability or benign political systems?”

Legal/judicial systems are a further issue. Venture capitalists worry about the length of time it takes for countries to dispose of any legal breaches that occur in business and about corruption, Nweze says.

 Africa needs venture capitalists because the current system in which banks fund startups is broken, Nweze argues. Instead, funds should be channeled to VC funds operating through banks.

“Banks don’t understand the kind of risks entrepreneurs take,” he says. “They cannot even manage them; they cannot give entrepreneurs the kind of attention they need. But if you have a venture capital firm, it can come in and take a seat on the board.”

African fintech startups continue to be popular among investors, the APCA report found, receiving as much as 25% of funds. This trend has been in place for about five years, Turman says, noting that they have been consistent, making them attractive to investors. He attributes this to three key factors.

First, investors themselves typically come from a finance background, and so fintech doesn’t require them to acquire much new knowledge to understand the model. Expertise may be required to understand solid minerals that are needed for computer chips, or clean energy, but not the business plan.

The second driver of fintech is the large number of unbanked Africans, says Turman. “The whole of Africa is unbanked,” he notes, “and we must get people to the banks. That’s an easy story to tell. The market is huge.” The fraction of Africa’s unbanked population is 50%. The third factor Turman identifies is “the fear of missing out. A whole lot of [investors] missed out before; now they don’t want to miss out again.”

How quickly they will respond is a more difficult question, however, and the answer may not be specific to Africa. Foreign VC activity on the continent has declined in line with a global trend, Turman notes, and this general macroeconomic trend that has affected all the regions.

“I am a buyer and I think that prices will go down,” he says. “I will wait for prices to go down. That’s what the VCs are doing. They raised a lot of money recently, so since they think prices are going to go down, why spend the money now when things are expensive and when prices of things are going to go down?”

When Bola Tinubu was inaugurated as president of Nigeria on May 29, he noted that the country’s monetary policy needed “thorough housecleaning,” and ordered the Central Bank of Nigeria (CBN) to work toward rationalizing its often vexing system of multiple exchange rates.

Action was not long in coming.

Eleven days later, Tinubu ordered the suspension of CBN Governor Godwin Emefiele from office, and asked him to hand over the reins to a deputy governor. The suspension was the latest step in an ongoing investigation of Emefiele’s office and the first step in a planning reform of the financial sector, the government stated following the suspension. Two days later, the Department of State Security announced it had the former governor in custody, with a list of allegations filed against him.

The removal of Emfiele, who had served nine years as governor, is unlikely to cause any destabilization in the state’s economic or financial policy, says Muda Yusuf, an economist and head of a Lagos-based think tank. “Rather, it is positive,” he argues, since “there is a need for policy reform in our financial sector,” and Emefiele’s removal will pave the way for improvements.

However, for the financial sector, businesses that trade with Nigeria, and critics of development policy in one of the world’s key oil exporters, the more important aspect of the move was as a prelude to needed monetary reform. Within days, the CBN announced it was floating the naira exchange rate and asked banks to sell dollars to their customers at market-determined rates.

At least two bankers confirmed the development but declined to be quoted on the issue. The exchange rate tumbled 40% on the news.

“If anything, the president is likely to liberalize the exchange rate system as he is doing with fuel,” says Sebastian Spio-Garbrah, chief frontier markets analyst at Damina Advisors, an independent frontier markets research and consulting firm with offices in the UK, Canada, Switzerland, and Ghana as well as Nigeria. “The parallel market rates gets business complicated, so Tinubu is going to push for a full liberalization.” Days earlier, Tinubu announced cuts in fuel subsidies in a bid to control spending.

For years, Nigeria has had an assortment of exchange rates, including the Investors and Exporters rate, today 463.8 to the dollar, and a parallel or black-market rate, most recently 755 to the dollar, which many regarded as the most relevant for investment decisions. Unifying the rates, Tinubu said at his inauguration, would direct funds away from arbitrage and into meaningful investment in plant and equipment for industrial expansion.

The multiple-rate regime was seen by many analysts a failing of Emefiele’s leadership. Under this aegis, the central bank argued that it did not amount to “multiple” rates, but various windows for accessing foreign exchange. And other close observers warn that a shift to an unmanaged system will not be easy for a country like Nigeria.

“The problem with full liberalization is that when you look at history, countries that are oil exporters never had floating exchange rates, but managed exchange rates because oil is a more volatile commodity,” Spio-Garbrah notes. “So commodity exporters generally have more managed currencies. When you liberalize the currency market, the local currency always becomes weaker for a country that imports a lot.”

That could threaten protected industries, he warns, “but not the financial market.”

But with Tinubu’s government taking a different tack, Emefiele’s departure was in the cards. Separately, he incurred the displeasure of Nigerians late last year when the CBN embarked on a controversial redesign of the naira. The exchange program led to severe distortion in economic activities, with millions of Nigerians unable to access their bank accounts for days and weeks.

“Emefiele’s position on foreign exchange and naira redesign is not the same with the new president, which means they are not on the same page,” says Yusuf. “You cannot reform a place without making changes. If the person who should drive the reform is not in support how do you drive it?”

The Nigerian Exchange Group (NGX) completed its prolonged ambition to be listed on the exchange it operates. At the end of its first day of trading, October 15, 2021, the bourse operator’s market capitalization reached 34.86 billion naira ($85 million) from the sale of 1.96 billion units of shares that started trading at N17.75 ($0.04).

“NGX Group’s listing allows us to expand in key capital market infrastructure verticals and look beyond Nigeria’s borders, as we deliver on our growth plans to become Africa’s leading capital market infrastructure group,” said Oscar Onyema, Group CEO of NGX, during a listing event.

Although the shares are still closely held by erstwhile members—especially the dealing member institutions, each of which received more than six million units of the demutualized NGX shares—there is a strong appetite from nonmember retail investors and institutional investors to own shares in the exchange.

The exchange operator’s decision to demutualize “is positive for the agility of the NGX and its ability to effectively reinvent and reposition itself for global competitiveness,” according to Yadinma Onwu, executive vice chairman of Funds Matrix & Assets Management.

“It is good for stronger governance and market development and, of course, [to] unlock the exchange from the shackles associated with a mutually owned entity, where decisions had to be taken in the interest of the broad members even when such undermines market development,” he says. “With the completion of this process, the exchange should be more efficient in running its core operations, even as it may also explore new opportunities to broaden the scope of the Group’s operation.”

Chinenyem Anyanwu, CEO of Dependable Securities, notes that “the members are now shareholders, who may seek to hold the shares or trade it with other interested investors—who do not necessarily have to be participants of the exchange to own its shares—as an investment just [like] any other corporate entity listed on the bourse.”

Anyanwu also finds it exciting that NGX would now report profit to its shareholders, “unlike [the] hitherto practice when it operated as a nonprofit-oriented entity, with annual surplus or deficit, as the case may be.”