The Central Bank of Nigeria (CBN) has unveiled a revised Foreign Exchange (FX) Manual aimed at improving transparency, strengthening market discipline, and restoring confidence in Nigeria’s foreign exchange market.
The updated framework comes as the country seeks to stabilise economic conditions, attract investment, and address long-standing challenges that have affected the efficiency of foreign exchange transactions.
For years, businesses and investors have faced difficulties ranging from foreign exchange shortages and settlement delays to inconsistent documentation requirements and uncertainty over access to foreign currency. The CBN believes the revised manual will help tackle these issues by providing clearer rules and more structured procedures for market participants.
Stronger Rules for a More Transparent Market
Speaking at the launch of the fourth edition of the FX Manual in Abuja, CBN Governor Olayemi Cardoso described the document as a key pillar of the bank’s ongoing reforms.
According to him, a credible foreign exchange market can only thrive when supported by transparency, accountability, compliance, and collaboration among stakeholders.
The revised manual introduces updated guidelines for foreign exchange transactions, enhanced reporting requirements, streamlined documentation processes, and improved access to domiciliary accounts. The measures are expected to reduce uncertainty and improve efficiency across the market.
Tougher Penalties for Market Violations
A major highlight of the revised framework is its stricter enforcement provisions.
The CBN has outlined tougher sanctions for practices such as round tripping, false documentation, failure to deliver funds in agreed transactions, and violations of foreign currency trading limits.
Banks found guilty of serious infractions could face licence suspensions, financial penalties, and other regulatory actions. The apex bank said the move is intended to discourage unethical practices and promote greater discipline within the market.
Focus on Liquidity and Market Growth
Cardoso also stressed the importance of building a deeper and more liquid foreign exchange market.
According to him, average daily market turnover has increased significantly, rising from about $100 million at the start of the current administration to between $400 million and $600 million, with occasional peaks of up to $1 billion.
He noted that the long-term goal is to reduce dependence on direct central bank interventions and create a more market-driven system capable of supporting economic growth and investor confidence.
Stakeholders Welcome the Reforms
Industry stakeholders have welcomed the revised manual, describing it as a timely step towards improving confidence in the foreign exchange market.
Group Managing Director and Chief Executive Officer of United Bank for Africa, Oliver Alawuba, said confidence among market participants has improved considerably in recent years due to policy consistency and ongoing reforms by the CBN.
The central bank also disclosed that the review process involved consultations with banks, exporters, regulators, corporates, and development partners to ensure broad stakeholder input.
Success Hinges on Effective Implementation
Despite widespread support for the reforms, analysts believe the true test will lie in implementation.
They argue that consistent enforcement of the new rules will be essential to achieving the goals of improved transparency, stronger market discipline, and increased investor confidence.
With the revised FX Manual now in place, businesses, investors, exporters, and other market participants will be watching closely to see whether the reforms deliver the more predictable and efficient foreign exchange system the country has long sought.
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CBN Unveils New FX Rules to Boost Market Confidence