Nigeria is making history by allowing financial technology businesses, or Fintechs, to participate legally in its official currency market as Naira plummets in value.
During the October 23 Nigerian Economic Summit, Taiwo Oyedele, a significant member of President Bola Tinubu’s committee on tax reform and fiscal policy, reported this development. Additionally, the Nigerian government is considering outlawing transactions on the parallel foreign exchange market.
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This decision comes as the Nigerian Naira faces
challenges, with a significant drop in value against the dollar on the parallel market. The exchange rate or the parallel market reached 1,215 Naira for every U.S. dollar, while the official market maintained a rate of 1:795 Naira to the dollar on the same day.
This depreciation follows the recent removal of import restrictions on 43 items by the Central Bank of Nigeria (CBN) to counter the Naira’s depreciation on the parallel market.
Despite these measures, the Naira continues to weaken, raising concerns that it may surpass the 2,000 Naira per dollar mark.
Taiwo Oyedele attributes this decline to the
narket’s inadequate liquidity, stating, “We currently
have a market that is not working, and it’s not going to work in its current format. We don’t have sufficient liquidity, even if you combine the parallel and official markets.“
