Omanghana
The Chief Executive Officer of FMDQ Group, Zeal Akaraiwe, has said reforms introduced by the Central Bank of Nigeria have strengthened market credibility, creating a foundation for a more resilient financial system capable of attracting sustained investment.
Speaking at the Nigeria–Asia Financial Connectivity Dialogue in Singapore, Akaraiwe said greater transparency and predictability in the foreign exchange market had improved conditions for investors. He stressed, however, that stabilization must be followed by further market development to prepare Nigeria for future global economic shocks.
Akaraiwe identified the expansion of hedging instruments as a priority, urging regulators and financial institutions to use the current period of relative stability to strengthen tools that help investors and businesses manage risk.
“Nobody buys an umbrella when it’s raining,” he said, emphasizing the need to prepare before market conditions deteriorate.
His proposals build on existing instruments, including dollar-naira non-deliverable forwards, exchange-traded derivatives, naira-settled foreign exchange futures and bond futures. Areas identified for further development include standard forwards, cross-currency swaps, and vanilla and structured options.
A broader range of these products would give market participants more ways to manage exposure to currency movements and other financial risks, supporting longer-term investment decisions.
The Singapore dialogue was convened by the CBN in collaboration with J.P. Morgan, Nigerian Exchange Group and FMDQ Group. Discussions focused on strengthening financial links between Nigeria and Asia and attracting investment beyond short-term portfolio flows.
CBN Governor Olayemi Cardoso highlighted the role of monetary tightening and stronger market rules in addressing distortions and rebuilding investor confidence. The outreach sought to encourage greater participation by institutional investors from Asian financial centers.
Participants also stressed that closer financial ties require practical connections between payment systems, market data infrastructure and cross-border trading channels. Such improvements would help international investors access Nigerian markets more efficiently.
Alongside its international engagement, the CBN has reinforced restrictions on Nigerian banks’ investments in offshore subsidiaries, including a 10 per cent cap. The measure is intended to limit overseas exposure and retain more capital within the domestic banking system following recapitalization.
Akaraiwe’s central message was that restored confidence should serve as the starting point for deeper reforms. Expanding risk-management tools and improving market infrastructure, he argued, would help translate recent gains in stability into lasting investment.
Source: Omanghana
