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Nigeria Week Ahead: Naira, PMI’s and Inflation in focus

by Admin
January 21, 2026
in Frontpage, Markets

Lukman Otunuga, Senior Research Analyst at FXTM

 

The past few weeks have not been kind to the Naira.

Foreign exchange shortages, rising inflation, and lower oil prices offered nothing but pain to the emerging market currency. Losses were accelerated by demand for foreign exchange currency’s outweighing any additional inflows from exporters. According to Bloomberg, the Naira spot rate is down over 4% against the dollar today, trading around N393.33 while on the parallel markets, the Naira has weakened to N480.

Nigeria Week Ahead: Naira, PMI’s and Inflation in focus
Given the list of negative themes threatening to sabotage Nigeria’s economic recovery, the outlook for the Naira remains clouded by uncertainty. According to Bloomberg estimates, prices are seen falling as much as 10% in 2021. Although authorities have threatened to halt the banking services of exporters in an effort to boost supplies of foreign exchange, the local currency remains under the mercy of multiple exchange rates and untamed inflation. The latest rise in the country’s short-term debt and a weaker Naira rate to sell Dollars to investors are likely to raise expectations around another devaluation, marking the third one in less than 12 months.

On the data front, all eyes will be on the manufacturing and non-manufacturing PMI figures for January. The Central Bank of Nigeria composite PMI for the manufacturing sector edged down to 49.6 in December of 2020 with markets forecasting a slight dip in January. For the non-manufacturing, the PMI is seen decreasing to 45.0 after hitting 45.7 in December. While these economic reports are significant and may offer insight into the health of Africa’s largest economy, all eyes will be on the OPEC monthly report and latest inflation figures.

Oil prices hit $60 per barrel this morning, levels not seen since February 2020. The commodity is deriving strength from renewed US fiscal hopes and optimism around global economic growth stimulating demand. The OPEC monthly report on Thursday could provide fresh insight into oils outlook, especially If the report signals a faster recovery in global demand. Given how a handsome chunk of Nigeria’s foreign exchange earnings and government revenues are sourced from oil sales, such an outcome may boost investor sentiment towards the country.

Let’s not forget about inflation. Inflationary pressures remain a thorn in the Central Bank of Nigeria’s side. In fact, untamed inflation has forced the central bank to leave interest rates unchanged at 11.5%. Consumer prices soared for a 16th straight month to 15.75% in December of 2020 – its highest rate since November 2017. Although the country’s borders have been re-opened to trade, inflation is still forecast to surpass 16% in January 2021.

Outside of Nigeria, it will be another busy week for global markets with earnings from the likes of Twitter, Uber & Disney, economic data from major economies and speeches by financial heavyweights in focus.

Admin
Admin
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Onafriq, a pan-African payments company, is set to discontinue its Baxi agent banking business in Nigeria after five years, citing naira depreciation, rising operating costs and intensifying competition that have weakened the segment’s profitability. The planned shutdown will affect the agent banking operations conducted through Baxi under Onafriq Nigeria Payments Limited. However, the decision does not signal the company’s withdrawal from Nigeria, as it intends to retain its cross-border payments network and card issuing services in the country. In a statement, Onafriq said changes in Nigeria’s operating environment since 2024 had significantly altered the economics of its offline agent banking business, making the existing model unsustainable. The move marks a strategic shift for the company, which entered Nigeria’s agent banking market to expand access to financial services through a network of agents providing transaction services outside traditional bank branches. Onafriq attributed the decision to a combination of macroeconomic pressures and structural changes in the country’s payments industry. According to the company, naira depreciation and inflation have affected transaction volumes, increased operating expenses and undermined the sustainability of its agent banking operations. The growing adoption of instant account-to-account transfers has also changed the mix of transactions handled by agents, while heightened competition among payment service providers has put further pressure on margins. These developments have made it increasingly difficult for the business to remain viable under its existing operating structure, prompting the company to reassess its long-term strategy. Dare Okoudjou, founder and chief executive officer of Onafriq, said the decision to close the business was difficult, particularly given the efforts of employees, agents and business partners who helped build the Baxi network. “We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for. Closing this business was a difficult decision to arrive at, one that affects colleagues, agents, and business partners across Nigeria who poured their hearts and soul into building out the Baxi network,” Okoudjou said. Despite the closure, he reaffirmed the company’s commitment to the Nigerian market, noting that the group would continue to serve customers through its payments network and card issuing operations. Onafriq entered Nigeria’s agent banking market in 2021 through the acquisition of Baxi, also known as Capricorn Digital Limited. The company said it continued investing in the business through 2023, with efforts focused on expanding and strengthening its agent network. However, a subsequent review of the business’s long-term prospects and financial sustainability led to the decision to wind down the operation. As part of the transition, Onafriq said agents onboarded through the Baxi platform had been moved to another principal bank, a step intended to facilitate continuity for the affected agents. The company has also directed agents to transfer their funds to their preferred principal bank within 30 days, adding that its teams would provide support throughout the transition process. Employees whose roles are linked to the agent banking business will also be consulted and supported during the wind-down, with Onafriq pledging to treat affected workers fairly.

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Methane rules spread across 67% of global production as Nigeria faces compliance test 

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October 17, 2026
Onafriq, a pan-African payments company, is set to discontinue its Baxi agent banking business in Nigeria after five years, citing naira depreciation, rising operating costs and intensifying competition that have weakened the segment’s profitability. The planned shutdown will affect the agent banking operations conducted through Baxi under Onafriq Nigeria Payments Limited. However, the decision does not signal the company’s withdrawal from Nigeria, as it intends to retain its cross-border payments network and card issuing services in the country. In a statement, Onafriq said changes in Nigeria’s operating environment since 2024 had significantly altered the economics of its offline agent banking business, making the existing model unsustainable. The move marks a strategic shift for the company, which entered Nigeria’s agent banking market to expand access to financial services through a network of agents providing transaction services outside traditional bank branches. Onafriq attributed the decision to a combination of macroeconomic pressures and structural changes in the country’s payments industry. According to the company, naira depreciation and inflation have affected transaction volumes, increased operating expenses and undermined the sustainability of its agent banking operations. The growing adoption of instant account-to-account transfers has also changed the mix of transactions handled by agents, while heightened competition among payment service providers has put further pressure on margins. These developments have made it increasingly difficult for the business to remain viable under its existing operating structure, prompting the company to reassess its long-term strategy. Dare Okoudjou, founder and chief executive officer of Onafriq, said the decision to close the business was difficult, particularly given the efforts of employees, agents and business partners who helped build the Baxi network. “We entered Nigeria with conviction and commitment, but did not achieve the outcome we set out for. Closing this business was a difficult decision to arrive at, one that affects colleagues, agents, and business partners across Nigeria who poured their hearts and soul into building out the Baxi network,” Okoudjou said. Despite the closure, he reaffirmed the company’s commitment to the Nigerian market, noting that the group would continue to serve customers through its payments network and card issuing operations. Onafriq entered Nigeria’s agent banking market in 2021 through the acquisition of Baxi, also known as Capricorn Digital Limited. The company said it continued investing in the business through 2023, with efforts focused on expanding and strengthening its agent network. However, a subsequent review of the business’s long-term prospects and financial sustainability led to the decision to wind down the operation. As part of the transition, Onafriq said agents onboarded through the Baxi platform had been moved to another principal bank, a step intended to facilitate continuity for the affected agents. The company has also directed agents to transfer their funds to their preferred principal bank within 30 days, adding that its teams would provide support throughout the transition process. Employees whose roles are linked to the agent banking business will also be consulted and supported during the wind-down, with Onafriq pledging to treat affected workers fairly.

Onafriq winds down Baxi as Nigeria’s agent banking economics worsen

October 17, 2026

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