FX Stability, Not Rate Level, Key to Sustainable Growth – Folawiyo
Nigeria’s foreign exchange reforms are restoring critical predictability to the economy, a development identified as fundamental for long-term growth and strategic business planning. Babatunde Folawiyo, Chairman of Coronation Merchant Bank, emphasized this point during a media engagement marking the institution’s 10th anniversary, where he assessed the impact of recent macroeconomic reforms. He acknowledged the adjustment phase has been challenging but argued that a stable and predictable policy environment, even at higher exchange rates, is far more constructive than prolonged volatility.
Folawiyo stated that the current policy direction aligns with sound economic principles and is beginning to yield positive outcomes. He observed that businesses are now positioning to benefit from reform-led growth in sectors like infrastructure, oil and gas, and manufacturing. This shift occurs as the broader financial system moves from short-term survival to strategic expansion. The growing emphasis on FX predictability is seen as a cornerstone for unlocking sustainable growth, a sentiment that reflects rising institutional confidence. This environment is crucial for entities like NNPC Ltd completes major projects or when a senator claims fuel subsidy reforms are impacting markets.
He stressed that uncertainty and sharp policy swings are more damaging than difficult but consistent reforms. Stability, he noted, is the most critical ingredient for economic progress and effective decision-making. This principle holds true whether examining how the south moves against economic headwinds or when analyzing national fiscal strategies. Beyond reforms, Folawiyo highlighted that Nigeria’s underbanked economy presents significant opportunities for specialized financial institutions with expertise in structured finance.
Coronation Merchant Bank’s management believes its strategic focus over the past decade positions it to benefit from improving policy clarity. Looking ahead, the bank expressed confidence that a more predictable environment, combined with disciplined execution, will enable it to deepen its domestic impact. As Nigeria’s reforms reshape the currency market into a unified, market-driven framework, the focus on stability aims to support capital inflows and underpin large-scale investments across key sectors, setting the stage for sustained economic advancement.
