FX unification, upstream approvals boost NGX firms – Presidency

The Nigerian government has highlighted recent improvements in corporate earnings on the Nigerian Exchange (NGX) as evidence of the positive impact of economic reforms initiated by President Bola Tinubu's administration. In a statement issued on Wednesday, the Presidency attributed the robust first-half 2026 financial results of numerous listed companies to key policy changes enacted since mid-2023. The reforms, according to the statement, have enhanced investor confidence and improved the overall business environment. Among the notable reforms was the unification of the foreign exchange market, which aimed to establish a single, market-determined exchange rate. This change, the presidential spokesperson explained, facilitated better price discovery and allowed companies with significant foreign currency exposure to more accurately represent the value of their dollar-denominated revenues in their financial reports. The reform proved particularly beneficial for export-oriented firms, including Aradel Holdings and Seplat Energy, whose operations are heavily influenced by international oil prices and foreign currency settlements. President Tinubu’s administration also approved major upstream oil and gas transactions, which were described as pivotal in boosting investor confidence and enhancing the prospects of indigenous operators. These approvals included the Renaissance Africa Energy consortium’s acquisition of Shell Petroleum Development Company (SPDC) assets, with Aradel Holdings participating in the deal, and Seplat Energy’s purchase of Mobil Producing Nigeria Unlimited (MPNU) assets. According to the statement, these transactions significantly increased the reserve base and production capacity of the involved companies, while eliminating regulatory uncertainties associated with some of the largest deals in Nigeria’s upstream sector. The administration also emphasized the benefits of allowing payments for crude oil in naira, which has bolstered local refining capabilities. The policy has contributed to positioning the Dangote Refinery as a net exporter of premium motor spirit (PMS) and aviation fuel. Additionally, manufacturing and industrial firms have reportedly gained from improved access to foreign exchange and a more stable currency market. Companies such as Dangote Cement, BUA Cement, and HBM, previously known as Lafarge Africa, have been able to streamline production planning, enhance procurement efficiency, and make more informed capital allocations under the new exchange rate framework. Improved foreign exchange availability has also alleviated operational bottlenecks and supported better supply chain management, leading to higher production levels and stronger revenue growth. The Presidency noted that this has translated into improved profitability for several firms. Furthermore, the removal of petrol subsidies was cited as a factor in strengthening the government’s fiscal position, though specific figures related to this aspect were not detailed in the statement. The reforms have not only impacted large corporations but have also created a more favorable climate for smaller enterprises. With clearer policies and a more predictable economic environment, businesses across various sectors have found it easier to operate and expand. The administration continues to monitor the ongoing effects of these measures and is expected to provide further updates on their long-term implications for the Nigerian economy. As the second half of 2026 progresses, the focus will remain on sustaining the momentum generated by these reforms and addressing any emerging challenges.