The Central Bank of Nigeria (CBN) on Friday intervened in the foreign exchange market, injecting $197.71 million to stem the naira’s slide after the currency fell to an all-time low of ₦1,600 per dollar on the official market. The decline, which marks the weakest exchange rate since the currency was floated in 2023, comes amid mounting global headwinds, including a 14% import tariff recently imposed on Nigeria by the United States.
The intervention has reignited debate over Nigeria’s foreign exchange framework, with calls growing louder for a more structured approach to exchange rate management. One of the most prominent voices is that of Ndubuisi Ekekwe, a professor, investor, and founder of the African Institution of Technology, who is calling for the CBN to abandon the full float and reintroduce a managed peg.
In a statement shared over the weekend, Ekekwe urged the apex bank to fix the naira at ₦1,200 to the dollar, arguing that continued dollar injections contradict the principles of a truly floating exchange rate regime.
“That we are still injecting funds after two years does imply the naira cannot swim in a sea of global currencies when floated,” Ekekwe wrote. “Simply, the naira does not have the productive life jackets to float.”
Ekekwe, who said he has tracked the currency’s impact on the economy using personal models, claimed that the float has merely shifted the cost of defending the naira from the government to the private sector with significant fiscal consequences. According to him, companies like MTN that once paid significant taxes are now repatriating less value, resulting in reduced government revenue.
“My data shows that the opportunity cost revenue, investment, asset value, and extra borrowing linked to the float is nearly equal to what the government previously spent subsidizing the naira,” he said. “And when you include second-order effects like the decline in venture funding for startups, the policy becomes a net negative for economic competitiveness.”
However, not everyone agrees with Ekekwe’s assessment. Communications strategist Sodiq Alabi pushed back against the idea of returning to a pegged regime, warning that the policy carries painful historical baggage.
“He is too smart to not realise the high cost of what he is asking for,” Alabi said. “He wants to send us back to the days of queuing for weeks, months, or years for dollars.”
Alabi’s comment reflects concerns that a fixed exchange rate, without adequate reserves or a productive export base, would lead to rationing, parallel market distortions, and a return to the inefficiencies that plagued the economy during previous regimes of rigid currency control.
All things equal, Nigeria’s foreign exchange framework is in a better state today than during the eight-year tenure of former President Muhammadu Buhari, under whom a rigid peg was maintained for most of his administration. That period saw significant distortion in currency pricing, the proliferation of multiple exchange rates, and a chronic backlog in foreign exchange obligations.
Under Governor Olayemi Cardoso, who assumed office in 2023, the CBN has made notable progress in restoring transparency and clearing the forex backlog. Businesses can now access foreign currency from the CBN with greater predictability an improvement that has been acknowledged by both local and international market participants.
Yet, challenges persist. While the naira was officially floated, the process has been described by analysts as reluctant and inconsistent. The CBN continues to intervene in the market and maintains elements of administrative control, even as it pledges allegiance to a “willing buyer, willing seller” model.
Ekekwe argues that if the CBN must continue to intervene to prevent steep depreciation, then a formal peg at ₦1,200/$ may offer the clarity and stability investors are seeking.
“Mr. President is rational as an accountant and will see this from the numbers,” he said.
In a 2023 post shortly after the float was introduced, Ekekwe warned that “a stable state may not come as most experts have predicted.” Two years later, with continued interventions and market uncertainty, that caution now reads as prescient.
