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Corporate Nigeria’s Top Forex Consumers, Buy $ 1.8 bn from CBN in Q1

By on July 16, 2012

The Central Bank of Nigeria (CBN) sells foreign exchange bi-weekly through its Wholesale Dutch Auction System (WDAS), the biggest forex market in Nigeria.

Corporate Nigeria patronizes the CBN auction on order to trade Naira for Dollars needed to carry out their business activities in various parts of the world. The companies primarily need the forex to purchase inputs for their manufacturing process, and others need the forex to import refined petroleum products to sell.

In Q1, 2012, the CBN sold $4.6 billion worth of forex through its auction system. Dangote Cement, MRS, Ontario Oil & Gas Ltd and Oando Supply & Trading Ltd consumed $ 1.8 billion, representing 39% of the amount.

Without the entrepreneurial vision of Dangote, Oil and Gas traders, who are not into an economy penetrating business, would have dominated the forex market.

However Oil & Gas companies led the demand for forex in Q1, with about 40 companies out of the 51 companies that applied for Forex being Oil & Gas companies.