Nigeria’s foreign exchange market is recording a sharp rise in activity after the Central Bank of Nigeria introduced the Electronic Foreign Exchange Matching System, widely known as EFEMS.
A CBN report indicates that FX market turnover increased by 262.4 percent in the first half of 2025, pointing to deeper participation in the official market as reforms strengthen price discovery and transparency.
What the numbers show
Based on CBN’s Financial Stability data for the first half of 2025, total FX market turnover rose to 52.47 billion dollars, up from 14.48 billion dollars in the first half of 2024.
The same report indicates that spot market activity improved within the period. FX sales increased to 4.74 billion dollars, compared with 3.18 billion dollars in the second half of 2024, while FX purchases were 3.97 billion dollars.
That suggests net sales of 0.77 billion dollars. It also states that there were no new forward transactions during the review period.
Why EFEMS matters for the market
EFEMS is the CBN’s electronic order matching platform designed to automate trading in the interbank foreign exchange market. The objective is to improve market transparency, governance and price discovery by creating a regulated environment where orders can be matched more efficiently and rates can better reflect actual demand and supply dynamics.
According to the CBN’s EFEMS guidance, the system was scheduled for full implementation in the interbank market by December 1, 2024, following a test run in November 2024.
A rise in turnover usually signals that a market is becoming more active and easier to participate in. When execution becomes more transparent and standardised, more institutions are willing to trade through official channels because the rules, pricing process and settlement expectations are clearer.
However, turnover is gross volume, not net inflows. Turnover can rise because more trades are taking place, even when overall dollar supply remains constrained. Still, when higher turnover is paired with structural reforms aimed at transparency, it typically points to an improving market framework and better confidence in official processes.
What this means for businesses and the naira
For businesses, a more active official market can reduce uncertainty and improve planning. Better price discovery can lower the information premium that firms often face when markets are opaque.
Over time, sustained liquidity can also help narrow the gap between official and informal pricing, though that depends on consistent supply and credible enforcement.
For a recent reference point, the CBN’s published Nigerian Foreign Exchange Market rates show the NFEM USD to naira rate on January 22, 2026 at about 1,422.07 naira, alongside intraday highs and lows.
The broader context: reserves and external stability
FX market reforms tend to work best when supported by stronger external buffers. On that front, Reuters reported that Nigeria posted a balance of payments surplus of 6.83 billion dollars in 2024, with reserves rising to 40.19 billion dollars by the end of that year, citing the CBN.
