The long-standing relationship between the two countries dates back to India establishing its Diplomatic House in Lagos in November 1958, two years before the country gained independence.



Narendra Modi recently visited Nigeria, marking the first trip by an Indian Prime Minister in 17 years since Manmohan Singh’s visit in October 2007.



Modi’s visit follows his meeting with Nigeria’s President Bola Tinubu on the sidelines of the G20 Summit held in New Delhi, India, in September 2023.



An Indian expatriate community of approximately 50,000 people – the largest in West Africa – serves as a living bridge between the two countries.



Highlighting this bond, Modi expressed gratitude during his meeting with Tinubu in Nigeria’s capital Abuja, stating: “I am happy that under India’s leadership, Nigeria joined the G20 as a partner country and was given BRICS partner status. Our partnership is strong and full of new possibilities.”



India is one of Nigeria’s largest trading partners, while Nigeria remains India’s largest trading partner in Africa. However, bilateral trade declined from $14.95 billion in 2021-22 to $7.89 billion in 2023-24, mainly due to reduced oil imports by India.



Foreign Direct Investment (FDI) inflows from Nigeria to India from April 2000 to June 2019 were valued at around $14.50 million.



Indian-owned and operated companies are critical players in Nigeria’s economy, with over 135 companies employing thousands of Nigerians in industries such as pharmaceuticals, engineering, and chemicals. These businesses represent the second-largest pool of private-sector employers in the country after the federal government.



Tinubu acknowledged this contribution, saying: “Indian citizens in Nigeria and investors are doing great service to your reputation and to democratic values in our region. We value our relationship and seek to deepen it for mutual benefit.”



Modi’s visit also highlighted India’s solidarity with Nigeria. He expressed condolences for the lives lost in last month’s floods and announced 20 tonnes of humanitarian aid for relief efforts.



Tinubu conferred upon him Nigeria’s national honor, the Grand Commander of the Order of Niger (GCON). “Your transformative leadership has placed India on the top ladder of governance, and we respect your example of democratic values. This honor signifies Nigeria’s appreciation and commitment to India as a partner,” Tinubu said at the meeting.

Bola Tinubu – Narendra Modi meeting in Nigeria

66-Year India-Nigeria Ties Strengthen As Modi Makes First Visit To The West African Economy

President Bola Tinubu recently rang the closing bell at the NASDAQ stock market, signaling a new era of opportunities for foreign investment in Africa&#8217;s economic powerhouse. We spoke exclusively with Scott Eisner, President of the US Chamber of Commerce’s US-Africa Business Center.



In New York recently, President Bola Tinubu of Nigeria rang the closing bell at NASDAQ, continuing his efforts to attract foreign direct investment into the country.



Tinubu was accompanied by Nigerian business leaders, governors, ministers, and officials from the Nigerian Stock Exchange (NSE), as the event took place on the sidelines of the 78th session of the United Nations General Assembly UNGA).



In an exclusive interview with FORBES AFRICA, Scott Eisner, President of the US Chamber of Commerce&#8217;s US-Africa Business Center, commended Tinubu&#8217;s efforts to attract foreign capital into Nigeria.



Surrounded by the bustling atmosphere of the famous stock exchange, NASDAQ, ranked as the second-largest in the world, the Nigerian leader seized the opportunity to highlight the investment potential in Africa&#8217;s economic powerhouse.



He conveyed his enthusiasm for bringing Nigeria to the global stage and assured potential investors that Nigeria was a secure destination for their capital.



&#8220;It&#8217;s a great honor for me to be here. I am happy to bring Nigeria to your doorsteps, and I am honored that we are here today with a thriving Nigerian stock market that will evolve in the West African sub-region. The greatest economy in Africa is Nigeria; there is immense opportunity in Nigeria where you can invest your money without fear,&#8221; Tinubu declared.



He underlined his government&#8217;s commitment to addressing long-standing challenges and impediments, such as restoring and unifying the foreign exchange rate market, ensuring stability, and making it easier for new investors to bring their capital into Nigeria with confidence.



&#8220;You&#8217;re free to invest and withdraw your money. I count on you to invest in Nigeria,&#8221; Tinubu emphasized.



Eisner, a prominent advocate for strengthening economic ties between the US and African nations, stressed the importance of Tinubu&#8217;s participation in the NASDAQ event. &#8220;The United States is one of Nigeria&#8217;s largest trading partners and a significant foreign investment source. In light of this, President Tinubu&#8217;s participation in the NASDAQ bell-ringing ceremony presented an opportunity to strengthen economic ties between the two nations. The ceremony served as a symbol of cooperation and collaboration between the United States and Nigeria, emphasizing the importance of maintaining a mutually beneficial partnership. Both countries can achieve more significant economic growth and prosperity by working together to enhance trade and investment relations,&#8221; he tells FORBES AFRICA.



According to Eisner, Tinubu&#8217;s participation has significantly bolstered the relationship between the US and Nigeria&#8217;s business communities. &#8220;This development is expected to pave the way for greater collaboration and increased investment between the nations.&#8221;



He further emphasized the potential benefits of increased collaboration between the two nations, including growth in the technology sector, enhanced agricultural trade, improved infrastructure, increased manufacturing, and more significant investment.



&#8220;Moreover, it can facilitate technology transfer between the two continents, helping African businesses adopt new technologies and enhance productivity. Finally, the event can promote cultural exchange between Africa and the United States, building understanding and respect between these two cultures. Overall, the presence of the Nigerian president at NASDAQ can have significant long-term benefits across Africa, making it a noteworthy event with the potential to drive positive change,&#8221; says Eisner.



Following the closing bell ceremony, the Nigeria-US Executive Business Roundtable provided a platform for President Tinubu to assure prospective investors of Nigeria&#8217;s attractiveness. He underscored that Nigeria&#8217;s unique combination of a burgeoning youthful population and a rapidly growing economy made it an unparalleled investment opportunity.



US Deputy Secretary of the Treasury, Wally Adeyemo, who had just returned from a visit to Nigeria, praised Tinubu&#8217;s reforms and efforts to boost confidence among global investors. &#8220;Nigeria is proving to be a new frontier for investment. We will encourage our companies from our end as those reforms continue to deepen,&#8221; Adeyemo stated.



The resulting collaborations are expected to create jobs, drive economic growth, and improve the quality of life for citizens in both countries, while also having a positive impact across Africa.

Image supplied

‘Symbol Of Cooperation And Collaboration’: US Chamber Expert On Nigeria President’s Participation In NASDAQ Bell-Ringing Ceremony

The country&#8217;s foreign exchange unification policy has garnered favorable sentiment in the financial landscape, enabling individuals and businesses to access financial services more efficiently. Experts say these steps toward a collective and transparent foreign exchange system could contribute to Nigeria’s economic recovery.



Following President Bola Tinubu&#8217;s decision to unify exchange rates in Nigeria, the Central Bank of Nigeria (CBN) has taken the initiative to allow the deposit money banks (DMBs) and foreign exchange market dealers to freely buy and sell forex at market-determined rates. This move marks a shift from the previous multiple forex regime to a &#8220;free-floating&#8221; system.



The foreign exchange unification policy has yielded positive developments in the country&#8217;s financial landscape. Customers have quickly embraced the initiatives introduced by the DMBs, which aim to provide seamless and convenient foreign exchange services.



With the option to convert FX to naira through online banking platforms, customers can now avoid the hassle of withdrawing cash and resorting to the parallel market for currency exchange. This shift reflects the increased confidence in the unified exchange rate system and the government&#8217;s commitment to creating a transparent and efficient FX market.



Smart Solutions For The FX Market



Recognizing the importance of diaspora remittances to the Nigerian economy, the CBN introduced measures to facilitate smoother transactions. A recent circular issued by the CBN announced that the naira is now a payout option alongside FX and the eNaira for the receipt of diaspora remittances.



In response to the evolving financial landscape, Nigerian banks are introducing innovative solutions to better serve their customers. One notable offering is the FX Cash Backed Loan, which enables domiciliary account holders to access naira loans of up to 85% of their available FX balance. This financial product allows individuals to meet their immediate financial needs without the requirement to withdraw or spend their FX holdings. By leveraging their FX assets as collateral, customers can access funds conveniently, supporting their personal and business objectives.



The suspension of international transactions on naira cards has been lifted by one of the banks, offering individuals greater flexibility in conducting cross-border transactions. This development allows cardholders to make international payments and purchases seamlessly, eliminating the previous limitations that hindered international financial interactions. The restoration of international transaction capabilities represents a significant step toward aligning Nigeria&#8217;s financial system with global standards and facilitating international trade and commerce.



Nigeria&#8217;s dollar-denominated sovereign bonds have experienced notable gains, reflecting the market&#8217;s positive sentiment. The announcement of the FX rules has resulted in an increase in the price of the country&#8217;s eurobonds, with some issues reaching their highest prices in months. Issuance matured in 2033 up 2.4 cents to 78.625 cents, the highest in over five months.



It is worth noting that Nigeria has been grappling with severe dollar shortages, which have led many individuals to seek foreign currency in the parallel market. The implementation of the foreign exchange unification policy aims to address these shortages by promoting transparency, reducing the reliance on the parallel market, and aligning the naira&#8217;s value with its official exchange rate. These efforts will contribute to a more stable and efficient foreign exchange market, providing individuals and businesses with greater certainty and access to FX.



Short-Term Pressure vs Long-Term Gains



The Nigerian government&#8217;s decision to unify exchange rates and implement comprehensive FX reforms is a significant milestone in the country&#8217;s economic journey. However, Nigerian economists note further efforts are needed to strengthen the export sector, increase FX earnings, and ensure effective control measures to prevent market distortions.



Subomi Plumptre, the Chief Executive Officer of Volition Cap, predicts a competitive market to the benefit of the public. Plumptre tells FORBES AFRICA: &#8220;The fact that customers can now convert dollars to naira on online banking platforms is expected to drive competition among International Money Transfer Operators (IMTOs). This could spark innovation leading to lower transaction fees and better rates for the public. The FX Cash Backed Loan, which offers naira loans to foreign currency holders, serves as an example of how easing foreign exchange regulations can stimulate innovation among financial service providers due to competitive pressures.&#8221;



She believes that &#8220;while the naira has depreciated substantially following the implementation of the FX unification policy, in the long-term, reduced FX intervention could yield positive outcomes.&#8221;



Plumptre adds, &#8220;A singular, market-determined exchange rate would improve transparency, eliminate opportunities for arbitrage and rent-seeking, and ultimately contribute to greater investor confidence and financial markets stability. In turn, these benefits could encourage dollar inflows, which may strengthen the naira’s exchange rate. The ongoing naira depreciation is part of the short-term price discovery process further driven by the fact that the official naira exchange rate was held artificially low, worsened by the stringent global financial conditions that underpin dollar shortages.&#8221;



Kelvin Emmanuel, an economist, commends the Nigerian government&#8217;s decision. &#8220;This is critical not only because the difference between official and parallel markets created a 63% black market premium for arbitrageurs that cost the government about $329 million every month in FX subsidy, but also because unification is going to address a chronic issue the Nigerian government has been battling with for years,&#8221; he tells FORBES AFRICA.



Emmanuel expresses excitement that &#8220;the decision to book independent revenues from government-owned enterprises, at investors and exporters rates, its decision to have the CBN create non-deliverable forwards for short- and long-term foreign investors is leading to appreciation of bond yield curve and bringing investors back into both the capital markets and the real economy.&#8221; He also believes that these reforms will contribute to economic reflation and long-term growth.



FX Round-Tripping And How It Affects The Market



Iheakanwah Felix Arinzeh, a financial expert and doctor of business administration, supports the recent FX policy, acknowledging &#8220;the need to defend the naira against excessive foreign exchange fluctuations.&#8221; However, Arinzeh emphasizes to FORBES AFRICA the importance of addressing the inadequate FX earnings and reserves by enhancing export infrastructure.



Arinzeh suggests measures to further strengthen the control of FX rates and discourage round-tripping. &#8220;In exploring the unending increase in the FX rate, particularly in the black/parallel market, FX round-tripping is one of the major causes. FX round-tripping is a situation where customers divert foreign exchange obtained from the CBN at an official rate to the black market for higher profits. The practice had created artificial FX scarcity and had denied users of foreign exchange even in their most basic transactions. I recommend that all export FX proceeds be converted via banks and that willing sellers should not in any way be allowed to nominate a willing buyer.&#8221;



&#8220;The harmonization of exchange rates requires a transition period for the adjustment of the exchange rate to align with the official rate. During this period, inflationary pressures may arise, especially if the parallel market rate was significantly higher than the official rate. However, with proper monetary and fiscal policies, these inflationary pressures can be managed effectively,&#8221; says Arinzeh.

Tag: President Bola Tinubu

FORBES AFRICA SOCIAL MEDIA

66-Year India-Nigeria Ties Strengthen As Modi Makes First Visit To The West African Economy

‘Symbol Of Cooperation And Collaboration’: US Chamber Expert On Nigeria President’s Participation In NASDAQ Bell-Ringing Ceremony

Positive Developments Follow Nigeria’s Free Floating Forex Market To Harmonize Exchange Rates