Akwa-Ibom, Jigawa lead as states record $910m forex gain

13 out of the country’s 36 states have recorded significant foreign exchange revaluation profits, totaling N71.59 billion, within the third quarter of 2023 (July to September). This information was gathered from the third-quarter budget implementation reports published on the respective websites of these states.JAMB Portal

The substantial profits are primarily attributed to foreign exchange revaluation gains, a consequence of the depreciation of the Naira, which is currently trading at N791/$. This marks a significant drop compared to its 2022 closing rate of N461.50/$1. The devaluation of the Naira has inadvertently resulted in these gains for the states.

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A critical policy change by the Central Bank of Nigeria (CBN) on June 14, 2023, played a pivotal role in this financial scenario.

The CBN directed Deposit Money Banks to remove the rate cap on the Naira at the official Investors and Exporters’ Window of the foreign exchange market, allowing for its free float against the dollar and other global currencies.NYSC PORTAL

This move aimed to integrate all market segments into the Investors and Exporters window, as stated in the CBN’s announcement.

Out of the states that have disclosed their earnings in the Q3 2023 report, Akwa-Ibom State topped the list with the highest earnings of N10.2 billion, followed by Jigawa with N7.23 billion, and Imo with N6.26 billion. Other states with notable earnings included Kogi (N5.92bn), Nasarrawa (N5.75bn), Plateau (N5.65bn), Abia (N5.34bn), Adamawa (N5.34bn), Enugu (N5.1bn), and Zamfara (N5.02bn).InformationGuideNigeria

Meanwhile, Bauchi recorded the lowest profit at N120 million, with Ebonyi and Osun receiving N4.79 billion and N4.89 billion, respectively.

This development sheds light on the varied impacts of currency fluctuations on sub-national economies and the strategies employed by state governments to capitalize on these market dynamics.

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