The Central Bank of Nigeria (CBN) plans to introduce an updated foreign exchange (FX) manual in early 2026, which aims to fortify the naira, diminish volatility, and boost confidence in the national currency.
The central bank announced that this initiative is part of a broader strategy to reform the governance of forex transactions and enhance trust in its forex system.
This information surfaced following a report from the Nigerian Exchange Limited (NGX), which revealed that combined transactions by both domestic and international investors surged to N11.9 trillion in 2025, marking the highest growth seen since 2007.
During a forum discussing the modifications to the FX manual, the Deputy Governor for Economic Policy at CBN, Dr. Muhammad Sani Abdullahi, indicated that the bank is implementing a thorough overhaul of the forex manual, a vital regulatory reference for banks regarding export earnings and other foreign trade activities.
He mentioned that the manual is currently undergoing significant modifications intended to align market operations with prevailing economic situations.
Abdullahi clarified that the reformed manual would feature more transparent guidelines, enhanced oversight, and upgraded procedures to promote clarity and efficiency within the FX sector.
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He stated that the expected reforms would mitigate loopholes, lessen uncertainties for market players, and facilitate a more organized operation of the foreign exchange system.
"This year, we are focusing on a complete overhaul of the framework regulating forex transactions in Nigeria. The FX manual is crucial as banks rely on it for exports and other foreign trade-related dealings.
"It is already undergoing extensive reforms, which we anticipate to complete in the next month or two, leading to an improvement in the value of the naira and reduced volatility," Abdullahi remarked.
In parallel, the NGX revealed on Friday that total market transactions grew significantly to N11.9 trillion in 2025, reflecting the highest surge since 2007. This represents an increase of approximately 113.4% compared to the N5.59 trillion reported previously in the "Domestic & Foreign Portfolio Investment Report of Nigerian Exchange Limited."
The remarkable N11.9 trillion increase was attributed to CBN's reforms in the forex sector, which prompted substantial foreign portfolio investments in the stock market last year.
These reforms are part of CBN’s broader initiative to develop a fairer and more stable forex market while promoting economic growth through improved monetary strategies.
The N11.9 trillion transactions also contributed significantly to a market capitalization of N36.6 trillion, providing average returns of 51.2% for investors in 2025.
Market analysts linked last year's stock market rally to the growing appeal of the Nigerian market for international investors, ongoing economic reforms, robust earnings from Nigerian enterprises, exchange rate differentials, and enhancements in the banking and oil sectors.
According to the report, foreign transactions amounted to N2.65 trillion in 2025, which was a remarkable 210.7% rise from the N852 billion recorded in 2024. Domestic investor activities surged from N4.73 trillion in 2024 to N9.27 trillion in 2025, demonstrating a nearly 96% increase.
The report further indicated that foreign investors represented 22.21% of the N11.9 trillion in 2025, up from 15.25% in 2024, marking the highest level since 2007. Conversely, domestic investors accounted for 77.79% in 2025, decreasing from 84.75% in 2024 amidst an uptick in foreign participation in the Nigerian stock market.
The report also highlighted that foreign inflows outpaced outflows for the first time in 2025, driven by robust market fundamentals and strong corporate performance by listed firms. Specifically, foreign inflows reached N1.4 trillion in 2025, contrasting with outflows that totaled N1.24 trillion.
Domestic retail transactions reached N3.65 trillion in 2025, an increase from N2.31 trillion, while the value of domestic institutional transactions rose to N5.62 trillion from N2.43 trillion in 2024.
The NGX's report observed that over the last 19 years, domestic transactions have risen by 160.82% from N3.556 trillion in 2007 to N9.27 trillion in 2025, with foreign transactions increasing by 329.87% from N0.6156 trillion to N2.65 trillion during the same period.
"In 2025, domestic transactions accounted for approximately 78% of the total transactions, while foreign transactions constituted about 22%,” the report stated.
"Total market transactions have increased remarkably year-over-year, climbing from N5.587 trillion in 2024 to N11.922 trillion in 2025, reflecting a growth of N6.3352 trillion or around 113.39%."
Mr. David Adnori, Vice President of Highcap Securities Limited, noted in a conversation with THISDAY that the rise in foreign investor participation can be attributed to government efforts to address forex backlogs, which helped bolster investor confidence and maintain stock market trends.
Analysts from Coronation also noted that the removal of the fuel subsidy, the liberalization of the forex market, and tightening of monetary policies by the current administration have played crucial roles in this market resurgence.
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