In a surprising turn of events, thirteen Nigerian states have reported substantial foreign exchange revaluation profits totaling N71.59 billion in the third quarter of 2023. The revelation comes from data obtained from the states’ third quarter budget implementation reports for the period of July to September, as published on their respective websites.
This extraordinary financial gain is attributed to the foreign exchange revaluation gains resulting from the depreciation of the Naira, which is currently valued at N791/$, a significant drop from its 2022 closing rate of N461.50/$1. The Central Bank of Nigeria (CBN) played a pivotal role in this development by directing Deposit Money Banks on June 14, 2023, to remove the rate cap on the Naira at the official Investors and Exporters’ Window of the foreign exchange market. This move aimed to enable the Naira’s free float against the dollar and other global currencies.
“The Central Bank of Nigeria wishes to inform all authorized dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters window,” the CBN announced in its directive.
While there are a total of 36 states in Nigeria, only 13 have disclosed their earnings in the Q3 2023 report. These states include Akwa-Ibom, Jigawa, Imo, Kogi, Nasarrawa, Plateau, Abia, Adamawa, Enugu, Zamfara, Bauchi, Ebonyi, and Osun.
Among these states, Akwa-Ibom stands out with the highest earnings of N10.2 billion, followed by Jigawa with N7.23 billion and Imo with N6.26 billion. Kogi, Nasarrawa, Plateau, Abia, Adamawa, Enugu, and Zamfara also reported substantial profits ranging from N5.1 billion to N5.92 billion. Notably, Bauchi recorded the lowest profit of N120 million, while Ebonyi and Osun received N4.79 billion and N4.89 billion, respectively.
Further analysis indicates that a total of 14 states have received N86.92 billion from forex earnings in the first three quarters of the year. This financial windfall underscores the economic impact of the recent changes in the foreign exchange market and the resilience of some states in navigating the challenges posed by currency depreciation.