Hurray! Some good news on this Week’s Flutterwave Market Roundup for the Lagosians! 

Lagos Overtakes Nairobi as Home to Most Start-ups 

Nigeria’s most populous city rose five spots in 2021 to rank 122 (127 in 2020) after swapping places with Nairobi, which is now ranked 136, according to StartupBlink’s Global Startup Ecosystem Index 2021, which has ranked 1000 cities and 100 countries.

The large population of Lagos, the commercial center of Nigeria, is one of the reasons for the emergence of new businesses in the city.

“It’s no wonder that Lagos is Africa’s leading hub for startups,” said Andrew S Nevin, Partner / Chief Economist at PwC, Nigeria. This is because, according to Nevin, “there are big challenges to solve on a large scale” and “this can only be solved with innovation.”

The most economically successful country has one of the highest urbanization rates in Nigeria, as more and more people arrive in search of opportunities, creating a demand for housing, financial service products, roads, healthcare, and electricity, among others.

Although Lagos is the smallest in Nigeria in terms of area, the center of excellence is the largest in Africa, a densely populated megalopolis that is home to around 21 million people. most populous in Nigeria.

The economic capital of Nigeria alone would rank seventh among African economies. Known for its traffic jams and business dynamism, Lagos alone is responsible for around 30% of Nigeria’s gross domestic product. If Lagos were a country, its economy, which is worth more than $ 136 billion, would be the seventh in Africa.  

CBN Moves to Increase FOREX Allocation to BDCS

The CBN, following its meeting with ABCON, decided to increase the foreign exchange allocation to the BDCs and maintain funding for approximately 5,000 members of the association.

This comes after the exchange rate between the Naira and the US dollar closed at 411₦/$1 at the official investors and exporters Market. The naira appreciated against the US dollar on Friday to close at ₦411 per dollar, against ₦411.5/$1 on Thursday, June 17, 2021.

In addition, the exchange rate depreciated in the parallel market to close at ₦498/$1 compared to ₦493/$1 registered on Thursday. This represents a decline of ₦5 after the significant gain of the previous trading day. The Naira fell in the parallel market after the significant increase from the previous trading day due to the improvement in the supply of currencies, with speculators losing heavily as ABCON (Association of Bureau de Change of Nigeria) warned against hoarding and speculative behavior in traders, which they claimed would lead to heavy collateral losses.

IMF Calls for Harmonisation of FX Rates for Market Clearance

The International Monetary Fund (IMF) called for the adoption of the Nigerian Autonomous Exchange Window (NAFEX) for official transactions, as well as the unification of all rates to achieve a market equilibrium rate.

The recent removal of the official exchange rate from the CBN website and steps to improve transparency in setting the NAFEX exchange rate is encouraging. The mission recommended maintaining the momentum to unify all exchange rate windows and establish a balanced exchange rate in the market. To strengthen the monetary targeting regime, the mission recommended integrating the interbank and debt markets and using the central bank or short-term government bonds as the main liquidity management tool, rather than liquidity reserve requirements.

The mission also urged authorities to keep CBN overdrafts for deficit financing within legal limits as the government continues to strive to strengthen budget planning and public finance management practices to enable financing. The flexibility of domestic markets and better integration of treasury and debt management “.

According to the IMF executive, the team noted that “the government’s consolidated budget deficit is expected to remain high at 5.5% of gross domestic product (GDP)” with short-term downside risks that could arise from further deterioration. security conditions and uncertainty caused by the COVID-19 pandemic.

The team confirmed the gradual recovery of the economy but warned that rising unemployment and high inflation pose huge risks to the economy. Growth, the group said, is expected to reach 2.5% this year.

The group noted that the banking sector was sufficiently capitalized and that NPLs were reasonably low.

***All Currency Rates, Fixings, Prices, and Indices were obtained as of Value date, Monday, June 21, 2021.

***BDC Rates: (Bureau De Change)This refers to the FX rates obtainable for valid transactions at the Parallel market i.e Black Market or local Licensed BDC operators in Nigeria

I & E Rates: The Investors’ & Exporters’ FX Window (I&E FX Window) is the market trading segment for Investors, Exporters, and End-users that allows for FX trades to be made at exchange rates determined based on prevailing market circumstances, thus ensuring efficient and effective price discovery in the Nigerian FX market. The I&E FX Window was established by the Central Bank of Nigeria (CBN) via a circular dated April 21, 2017

NAFEX – (The Nigerian Autonomous Foreign Exchange Fixing) is the reference rate for Spot FX operations in the Autonomous FX Market which comprises recognized FX trading segments, including but not limited to the Inter-bank market, the I&E FX Window and any such approved and recognized trading segment as may be defined from time to time. NAFEX is used in the daily valuation and settlement of the OTC FX Futures Contracts.

CBN Official Rate: This is the official rate at which direct transactions can be carried out with the CBN. This rate can only be obtained when direct deals or FX trades are done directly with the CBN

Sources: FMDQ, Flutterwave Treasury Team, Abokifx, Proshare,, Reuters, Nairametrics, FMDQ, BusinessDay, Bloomberg, TheGuardian

Disclaimer- This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Therefore, all rates shown here are mark-to-market rates being published for guidance purposes only. Reasonable care has been taken in preparing this document. Flutterwave Technology Solutions Ltd shall not accept responsibility or liability for errors of fact or any opinion expressed herein. This document is for information purposes and private circulation only and may not be reproduced, distributed, or published by any recipient for any purpose without the prior written consent of Flutterwave Technology Solutions Ltd. 

Published by Ifeoluwa Oyeleke

Senior Treasury Analyst