Renowned economist and managing director of Financial Derivatives Company (FDC), Mr Bismarck Rewane, has estimated the fair value of the naira at about N1,257 to the US dollar.
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Rewane posits that the local currency is undervalued by approximately 11 per cent when assessed using the purchasing power parity (PPP) model.
Rewane made the submission during his keynote address at the 2026 Economic Outlook organised by the Association of Corporate Treasurers of Nigeria (ACTN), where he anchored the session and offered a detailed analysis of the structural and cyclical factors influencing Nigeria’s exchange-rate movements.
He noted that currencies typically converge towards their PPP-implied values over a five-year horizon.
According to him, the appropriate exchange rate based on current PPP estimates stands at N1,256.79 to the dollar, reinforcing the view that the naira remains below its fair valuation level.
At the start of his presentation, Rewane emphasised that the primary responsibility of a corporate treasurer is the optimisation of a company’s liquid resources.
He said that in carrying out this role, treasurers must operate with cautious optimism, particularly in managing foreign-currency exposure and foreign-exchange-related activities.
The event also featured a panel discussion with Adeyinka Ogunnubi, Group Treasurer of CFAO Nigeria, and Titilola Osinowo, Group Head of Treasury and Investments at Ardova Plc.
Osinowo outlined several practical measures that treasurers could adopt to improve liquidity management.
She highlighted foreign-exchange swaps and options as instruments that treasurers should increasingly explore, stressing the importance of a more structured approach to the use of hedging tools.
“If you have dollar receivables, you match your expenses with those dollar receivables, or you align your cash flows accordingly,” she said, underscoring the role of natural hedging in treasury operations.
Speaking on what he described as “smart allocations,” Ogunnubi, who also serves as national president of the ACTN, said treasury management is fundamentally about maximising every unit of cash to achieve the best possible return at the lowest cost and risk.
He added that working capital should always be the first consideration for treasurers when making allocation decisions.
Ogunnubi explained that companies may sometimes transition from a net negative cash position to a net positive one, raising critical questions about cash deployment.
“Then the question becomes: what do you do?” he asked. “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 point.”
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