BUSINESS
Rewane Puts Fair Value of Naira at ₦1,257/$, Says Currency Undervalued by 11% as Experts Outline Strategic Treasury Pathways at ACTN 2026 Economic Outlook
Renowned economist and Managing Director of Financial Derivatives Company (FDC), Mr. Bismarck Rewane, has placed the fair value of the Nigerian naira at about ₦1,257 to the United States dollar, describing the local currency as significantly undervalued in relation to its underlying economic fundamentals.
Rewane, who based his assessment on the Purchasing Power Parity (PPP) model, explained that the naira is currently undervalued by approximately 11 per cent, indicating a notable gap between its prevailing market price and its intrinsic worth.
According to him, the appropriate exchange rate based on current PPP estimates stands at ₦1,256.79 to the dollar, reinforcing the view that the naira remains below its fair valuation level.
He made the submission while delivering his keynote address at the 2026 Economic Outlook organised by the Association of Corporate Treasurers of Nigeria (ACTN), where he also anchored the session and presented a detailed analysis of the structural and cyclical forces shaping Nigeria’s exchange-rate dynamics.
Rewane noted that currencies do not permanently deviate from their fundamental values, stressing that they typically converge towards their PPP-implied levels over a five-year horizon. This, he suggested, provides a medium-term perspective for businesses, investors, and policymakers in assessing currency risks and opportunities.
At the outset of his presentation, the economist emphasised that the primary responsibility of a corporate treasurer is the optimisation of a company’s liquid resources. He explained that this role has become increasingly complex in an environment characterised by volatile exchange rates, inflationary pressures, and evolving monetary conditions.
He further advised treasurers to operate with cautious optimism, particularly in the management of foreign-currency exposure and foreign-exchange-related transactions, noting that disciplined strategies and informed decision-making are essential for sustaining corporate financial stability.
The event also featured a panel discussion that brought together Adeyinka Ogunnubi, Group Treasurer of CFAO Nigeria, and Titilola Osinowo, Group Head of Treasury and Investments at Ardova Plc, who shared practical insights on navigating liquidity challenges and improving treasury efficiency.
Osinowo outlined several measures that treasurers could adopt to strengthen liquidity management frameworks. She identified foreign-exchange swaps and options as key instruments that treasurers should increasingly explore, stressing the need for a more structured and deliberate approach to the deployment 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 as a cost-effective way of managing currency risk.
Speaking on what he described as “smart allocations,” Ogunnubi, who also serves as National President of 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, as it directly affects operational continuity and financial resilience.
Ogunnubi explained that companies may, at different points, transition from a net negative cash position to a net positive one, a shift that introduces critical questions about optimal 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.”
The discussions at the ACTN 2026 Economic Outlook underscored a growing consensus among financial experts that disciplined treasury practices, robust risk management, and data-driven decision-making are indispensable for Nigerian businesses seeking to navigate currency volatility and unlock long-term value in a challenging 
macroeconomic environment.