Using the purchasing power parity (PPP) model to estimate the fair value of the naira, the Nigerian currency is undervalued by about 11 percent.
This was the presentation by Bismarck Raven, Managing Director of Financial Derivatives Company, at the 2026 Economic Outlook of the Association of Corporate Treasurers of Nigeria (ACTN), where he delivered the keynote address.
Revane, who moderated the session, placed the fair exchange rate at around N1,256.79 against the dollar. He said currencies generally move toward their PPP-implied value over a five-year horizon. During his presentation, he provided a detailed and comprehensive account of the structural and cyclical factors influencing exchange rate movements in Nigeria.
Read More: Naira FX trading under CBN's EFEMS grows 262% in one year – BusinessDay NG
At the beginning of his session, Raven emphasized that the primary responsibility of the corporate treasurer is the optimization of the company's liquid resources. He added that, in carrying out this responsibility, treasurers must act with cautious optimism, particularly with respect to foreign exchange risk and FX-related activities.
The event also included a panel session featuring Adeyinka Ogunnubi, Group Treasurer of CFAO Nigeria and Titilola Osinowo, Group Head of Treasury and Investments at Ardova Plc. Osinowo outlined a number of practical measures that treasurers can adopt to optimize liquidity management. He highlighted FX swaps and FX options as tools that treasurers should increasingly begin to explore, adding that greater attention should be paid to the structured use of hedging tools.
Also read: Naira ends week flat as external reserves reach $46 billion
“If you have dollar amounts of receivables, you match your expenses with those dollar amounts of receivables, or you align your cash flows accordingly,” he said, emphasizing the importance of natural hedging.
On the subject of what he described as “smart allocation”, Ogunnubi, who also serves as the National Chairman of ACTN, said that “Treasury, at its core, is about maximizing each unit of cash, achieving the lowest possible cost and best possible return on risk.”
He said the first consideration for treasurers should always be working capital and how to best deploy it. Ogunnubi explained that there are scenarios where a company transitions from a net negative cash position to a net positive position. “Then the question becomes: What do you do?” He said. “Do you pay suppliers early? You may not be able to pay dividends ahead of time, but fundamentally, it comes down to identifying the most efficient and optimal use of cash at any given time.”
