Finance
CBN now to allocate forex to end users
ABUJA—The Central Bank of Nigeria, CBN, is now to allocate foreign exchange to end-users, with priority given to matured Letters of Credit, importation of petroleum products, raw materials and machinery. This is in a bid to effectively manage the nation’s depleted foreign reserves.
This came as Nigeria’s foreign trade report for imports and exports during the third quarter of 2015 has shown an unprecedented decline reflecting the level of stress the economy has witnessed since this year.
The Director of Monetary Policy of the CBN, Mr. Moses Tule, who spoke in Abuja, at the weekend said under the new regime, those who take pleasure in wasting the nation’s foreign exchange in shopping abroad would find it increasingly difficult.
His words: “Our priority as a nation for the allocation or use of foreign exchange is for the settlement of matured Letters of Credit, LCs, that have been opened for importation; for the importation of petroleum products until such a time when we have our refineries fully operational and we are not in a position to import fuel again to ensure that the wheels of economic development continue turning and running and for the importation of raw materials.
“By the time we meet these three priority areas, you will discover that people who are using their debit cards overseas for shopping can never be on the priority list.
“We do understand that it may not be all that the demands will be for shopping. We have seen that the reserves are not there and what we have we will use essentially for the purposes that will keep the wheels of the economy running. We have to produce for export, we can’t continue to depend only on the export of crude oil.”
The director said that the CBN synpathised with Nigerians on the ban of the use of debit cards abroad but that there was nothing the institution could do on its own to change the nation’s foreign exchange earnings, as it largely depends on oil receipts.
“It is a healthy development where Nigerians can no longer use debit cards abroad. But it is inconvenient. Right now the country is going through very difficult times because of developments in the oil market. Foreign exchange under the condition Nigeria has found itself has become a seasonal commodity. Seasonal in the sense that it depends on the movement of the price of oil. If oil prices are high, then we build reserves, if oil prices are low, then we have no reserves and we will be in a crisis situation.
“Does the CBN sympathize with the situation Nigerians find themselves not being able to use their debit cards outside the country? Yes the CBN certainly does sympathize with the hardship Nigerians are facing, but can the CBN stop it? The CBN cannot stop what the banks are doing now and the reason is very obvious,” he said.
Mr. Tule indicated that the policy would not be reviewed any time in the short term, as according to him, the reserves which currently stand at about $29 billion would have to be built up to a figure of around $50 billion before free use of the foreign exchange could be restored.
The moment we begin to build reserves, we expect that just as this restrictions were not there, most of the restrictions will be lifted but for now, every hand needs to be on deck. We need to earn foreign exchange as a country. You can improve your business processes in order to export and earn foreign exchange and that is what the country is calling on patriotic Nigerian businessmen to do.”
Economic downturn: Foreign trade drops by N2.5 trillion
Meanwhile, Nigeria’s foreign trade report for imports and exports during the third quarter of 2015 has shown an unprecedented decline reflecting the level of stress the economy has witnessed since this year.
A huge drop in crude oil export appeared to have taken a toll on the ability of the economy to finance imports as the Central Bank of Nigeria, CBN, tightened its restrictions of foreign exchange utilisation within the period.
According to the foreign trade statistics released by National Bureau of Statistics, NBS, compared to the corresponding quarter of 2014, the value of total merchandise trade comprising Nigeria’s imports and exports in third quarter 2015 decreased by N2.5 trillion or 38.3 per cent. Total value of trade in the third quarter of 2015 was N4.02 trillion as against N6.4 trillion in the corresponding period of last year.
This, according to the report, was as a result of a N132.4 billion or 7.3 per cent and N 2.4 trillion or 50.3 per cent decline in imports and exports respectively relative to the corresponding quarter in 2014.
The third quarter 2015 reports also show steady decline in the economy sector as the value dropped by N338 billion against the preceeding quarter of 2015.
Quarter-on-quarter, the sharp decline in exports and slight decrease in imports contributed to continued fall in the Country’s trade balance, by 32 per cent or N 303.1 billion during the third quarter of 2015.
Total value of Nigeria’s imports during the quarter stood at N1.7 trillion, a slight decrease of one per cent from what was recorded in the preceding quarter, but, year-on-year analysis showed that the country’s imports decreased significantly by N132.4 billion or 7.3 per cent, reflecting the significant difference in the economic conditions between the periods.
Total value of the nation’s exports totaled N 2.3 trillion in the third quarter of 2015, a decrease of N320.6billion or 12.1 per cent, over the value N2.65 trillion recorded in the preceding quarter.
This decline, according to NBS, was attributed to a fall in crude oil exports by N372.8 billion or 18.8 per cent over the preceding quarter.
The structure of Nigeria’s imports by section was dominated by the imports of “Boilers, machinery and appliances; parts thereof” which accounted for 24 per cent of the total value of imports in the third quarter of 2015.
Other commodities which contributed noticeably to the value of imports in the review period were “Mineral products” at 15.3 per cent, “Vehicles, aircraft and parts thereof; vessels etc” at 8.8 per cent, “Products of the chemical and allied industries” at 8.6 per cent, and “Base metals and articles of base metals” at 8.4 per cent.
Imports classified by Broad Economic Category, revealed that Industrial Supplies “ranked first with N470.3billion or 27.9 per cent of total imports. This was followed by “Capital Goods and parts” with the value of N398.7 billion or 23.6 per cent, and “Food and Beverage” with N322.8billion or 19.1 per cent. The value of Motor Spirit (petroleum products) stood at N220.6 billion.
Nigeria’s imports by direction (country of origin), showed that the country imported goods mostly from China, United States, Belgium, Netherlands and India which respectively accounted for N459.4 billion or 27.2 per cent, N160.6 billion or 9.5 per cent, N128.3billion or 7.6 per cent, N101.8billion or 6 per cent and N97.4billion or 5.8 per cent of the total value of goods imported during the quarter.
Further analysis of Nigeria’s imports by continent, revealed that the country consumed goods largely from Asia with imports valued at N764.5 billion or 45.3 per cent of total imports while it imported goods valued at N596.4 billion or 35.3 per cent from Europe and N241.3 billion or 14.3 per cent from the Americas.
Import trade from Africa stood at N65.4 billion or 3.9 per cent while imports from the region of ECOWAS amounted to N16.3 billion.
The structure of exports is still dominated by crude oil, which contributed N.6 trillion or 69.1 per cent to the value of total domestic exports in the third quarter of 2015. Natural liquefied gas recorded N265.2 billion of the total export value during the period under review.
Exports by section revealed that Nigeria exported mainly “Mineral Products”, which accounted for N2.025 trillion or 86.8 per cent of the total exports.
Other products exported by Nigeria include those categorized as “vehicles, aircraft and parts thereof; vessels etc.” at N216.2 billion or 9.3 per cent; “prepared foodstuffs; beverages, spirits and vinegar; tobacco” at N33.1 billion or 1.4 per cent, and “vegetable products” at N9.3 billion or 0.4 per cent of total exports.
Vanguard-
Nigerisa’s Vice President Kashim Shettima
By Modupe Asudo
The 2026 edition of the African Continental Free Trade Agreement (AfCFTA) Summit got underway in Lagos on Monday with regulatory agencies, project promoters, and financial institutions focused on deepening intra-Africa trade, a unified code of standards for professional qualifications and manufactured goods, and expansion of the frontiers of technological development and innovation.
Critical questions addressed include how AfCFTA’s 1.4 billion population and $3.4 trillion economy could achieve “a strategic shift from fragmented economies towards a globally competitive supply chain system”; how Africa could leverage its vast mineral resources, including copper, iron ore, petrochemical, for domestic production of hardware such as Christmas tree (an assembly of valves, fittings on top of a wellhead to control oil production), and how, hypothetically, Tema Shipyard in Ghana could be designated the vessel construction, assembly and repairs hub for Africa.
Related questions were how cables manufactured in Nigeria, hypothetically, could benefit from favourable trade terms in Angola; what compliance requirements a sacrificial anode producer in Nigeria would have to meet in regard to the rule of origin requirement to export anodes to Algeria for protection and longevity of pipelines, storage tanks, offshore platforms, etc., and what other support levers would be required to achieve energy security for Africa besides expanded refining capabilities in Dangote Refinery, laying of continental gas transmission pipelines, and establishment of industrial parks and other support infrastructure.
In a keynote address at the event, the Executive Secretary of the NCDMB, Engr. Felix Omatsola Ogbe, represented by the Director, Corporate Services, Dr. Abdulmalik Halilu, disclosed that Nigeria’s oil and gas industry embraced AfCFTA and developed a framework for domesticating the policy in 2022.
According to him, implementing AfCFTA in the industry was anchored on three broad pillars, namely, Opportunities Identification, Capacity Development, and Capacity Exportation. In regard to opportunities, he said Nigeria’s strength lies in formidable supply chain in oil field services, refining capacity, oil field logistics base, gas supply pipelines, and a pool of qualified oil field technical workforce.
On capacity development, he pointed out that Nigeria’s oil and gas industry, through the local content law, has developed capabilities in the oil and gas value chain spanning marine vessel asset ownership, fabrication, assembly and installation of production systems, including Christmas trees, pressure vessels, and pumps.
What remains unresolved, described by the Executive Secretary as “the next frontier and the reason for convening the Summit,” is capacity exportation. He posited for consideration a unified work permit and visa that would enable, say, “a welder in Senegal to be engaged in Arlec Engineering Works, Johannesburg, South Africa, for fabrication of heat exchangers, storage tanks, pressure tanks, pressure vessels, etc.”
In examining the importance of achieving continental economic integration, Engr. Ogbe explained that strong regional supply chains would shift Africa from exporting raw materials to producing high-value goods. For pathways to integration, he listed regional value chains, infrastructure connectivity, regulatory harmonization, industrial clusters, and small and medium scale enterprises (SME) inclusion.
He assured industry stakeholders and participants maximum support by the NCDMB.
By Modupe Asudo
The Nigerian Content Development and Monitoring Board has outlined a practical framework for positioning Nigeria’s energy sector to access the African Continental Free Trade Area, following a strategic webinar focused on meeting rules-of-origin requirements for continental trade.
The Board held a pre-conference webinar on Wednesday ahead of the Nigeria Local Content AfCFTA Energy Summit scheduled for Monday, February 9, 2026.
The engagement was attended by stakeholders from the oil and gas, power and renewable energy sectors, and they addressed how Nigerian products and services can qualify for preferential market access across 54 African countries with a combined gross domestic product of $3.4tn and a population of about 1.4 billion people.
Entitled ‘Meeting AfCFTA Origin Requirements in Energy Trade’, the webinar focussed on one of the major barriers facing Nigerian exporters under AfCFTA — structuring production and operations to meet origin requirements that determine eligibility for duty-free and preferential trade.
The initiative was supported by the Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, and the Acting Director of Planning, Research and Statistics, Mr. Ene Ette, as part of preparations for the forthcoming Nigeria Local Content AfCFTA Energy Summit, with the theme ‘Unlocking Africa’s Energy Future through AfCFTA: Trade, Innovation and Regional Integration’.
Speaking during the session, a communications analyst, Joseph Nwokedi, representing the Acting National Coordinator of Nigeria’s AfCFTA Coordination Office, Mrs Patience Okala, stressed the central role of energy in Africa’s economic integration under AfCFTA.
He urged Nigerian companies to shift their focus from Nigeria’s domestic market of about 200m people to the wider continental market of 1.4bn consumers.
“Without energy, there’s no industrialisation. Without energy, regional value chains remain aspirational,” Nwokedi said. “With AfCFTA, energy transforms from a domestic infrastructure issue into a tradable, investable and exportable sector within an integrated African market.”
He noted that even one per cent penetration of the African market translates to about 14m consumers, underscoring the scale of opportunity available to Nigerian energy firms.
The webinar identified four key pathways through which Nigeria’s energy sector can participate in AfCFTA-enabled trade. First, Nigeria’s Electricity Act of 2023 allows independent power producers to supply electricity directly to industrial clusters and export processing zones, positioning power generation as a foundation for trade-ready manufacturing.
Second, the country has submitted commitments under AfCFTA that enable professionals such as engineers, electricians, geophysicists and energy auditors to export services across Africa, subject to mutual recognition of qualifications.
Third, refined petroleum products, gas derivatives, electricity and renewable energy components can be traded across borders under preferential tariffs, provided they meet AfCFTA rules of origin.
Fourth, AfCFTA’s investment protocol, combined with recent domestic reforms, including the Presidential Directives on Investment Incentives for 2024–2025, strengthens Nigeria’s credibility for attracting cross-border investments in power generation, transmission, renewable energy and storage infrastructure.
Delivering a technical presentation, Assistant Comptroller of Customs, Burhan Sulaiman, explained that AfCFTA would eliminate tariffs on 90 per cent of goods traded within the bloc over five to 10 years, with an additional seven per cent liberalised over 13 years. However, he stressed that these benefits were conditional on meeting origin requirements.
“Companies lose benefits because origin was treated as an afterthought,” Sulaiman said. “You must build in origin compliance from the beginning, not while already running your project. Origin determines whether you export duty-free or pay full tariffs.”
He clarified that origin is determined by where economic production takes place, not by company ownership or registration. Foreign-owned companies producing in Nigeria can export as Nigerian origin, while Nigerian companies importing finished goods cannot claim AfCFTA preferences.
Sulaiman explained that products qualify for preferential access through two routes. “Wholly obtained” goods are entirely produced within AfCFTA member states, such as crude oil and natural gas extracted in Nigeria, as well as locally generated electricity regardless of fuel source.
The second route, “substantial transformation”, applies where foreign inputs are used and requires compliance with one of three tests: a change in tariff classification; a value-addition threshold limiting foreign content to between 30 and 60 per cent of ex-works price; or completion of specific prescribed processes such as distillation, cracking or reforming for petroleum products.
He provided sector-specific guidance, noting that in oil and gas, locally extracted crude and gas qualify, just as refined petroleum products that meet processing requirements. However, simple blending, basic distillation operations and modular refineries using imported crude without substantial transformation do not qualify.
In the power sector, he explained, locally generated electricity and regionally manufactured equipment with deep component transformation qualify, while installation-only activities, imported turbines, transformers and switchgear mounting do not.
“For renewables, regional solar cell and battery cell manufacturing with deep component processing qualify,” he said, adding that panel installation alone, simple module assembly and packaging imported batteries do not meet the thresholds.
Sulaiman warned that without regional manufacturing accumulation, power equipment exports fail origin tests.
According to him, the Nigeria Customs Service applies a five-step verification process for origin claims, including confirming accurate HS codes, reviewing production records, testing for minimal operations, verifying African input origins and ensuring consistency across certificates, production records and cost documentation.
“Weak documentation kills origin claims. Even genuinely originating products can be denied if documentation is incomplete or inaccurate,” he noted.
Both speakers emphasised that origin compliance should be treated as a core business strategy rather than a regulatory formality.
“Origin is not paperwork; it is strategy,” Sulaiman said. “It shapes where you locate facilities, how you source inputs, and where you sign regional contracts. Treat it as strategic from day one.”
Nwokedi urged Nigerian firms to act early. “AfCFTA is happening now. Early movers will shape supply chains, standards and partnerships. Are you going to lead, or simply follow?”
Officials also provided updates on AfCFTA implementation, noting that 92 per cent of rules of origin had been agreed, with negotiations ongoing in the textiles and automotive sectors.
An online dispute resolution mechanism has been established to coordinate Customs authorities, standards bodies and complainants.
Nigeria has deployed a fully operational electronic certification system for paperless trade, while Nigerian Customs is introducing risk-management frameworks that could allow exporter self-certification on commercial invoices.
Following a five-year implementation review led by the Minister of Industry and Investment, Dr Jumoke Oduwole, government sensitisation efforts have intensified through partnerships with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture; Women’s Chambers of Commerce; zonal outreach programmes and ‘P3 engagements’ involving the press, private sector and public institutions.
“The government will not trade under AfCFTA — our exporters will,” officials said. “If they win, we win.”
Nigerian Customs also reiterated its open-door policy for pre-export origin verification to help businesses avoid delays and additional costs at the border.
The webinar highlighted Nigeria’s potential as a regional energy and transition-fuel hub, building on frameworks such as the West African Power Pool to support cross-border electricity trade.
Key recommendations included structuring projects for origin compliance from inception, forming regional joint ventures, aligning with continental standards and leveraging AfCFTA service commitments to export Nigerian energy expertise.
The session ended with confirmation that the webinar was a technical precursor to the Nigeria Local Content AfCFTA Energy Summit, which will convene policymakers, industry leaders and trade experts to develop strategies for maximising Africa’s energy potential under the AfCFTA framework.
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