Before this initiative, many African countries relied heavily on the US dollar for trade. The ongoing conflict, which began with US-Israeli strikes on Iran on February 28, has further complicated matters. It has raised concerns about oil supply routes, particularly through the Strait of Hormuz, which carries about one-fifth of global oil shipments.

However, Afreximbank is taking decisive action. The bank launched a $10 billion crisis response program to help African nations navigate these global uncertainties. This program aims to support local currency arrangements in strategic value chains, reducing demand for dollars.

The dollar index briefly rose to 99.3 before slipping below 98.5 as demand slowed sharply. This fluctuation reflects market instability linked to geopolitical events. The closure of the Strait of Hormuz poses significant risks for oil and gas shipments.

As part of its strategy, Afreximbank is backing a local currency crude supply framework in Nigeria. This framework seeks to reduce dollar demand within the petroleum value chain. By promoting local currency transactions, Afreximbank hopes to help African economies conserve foreign reserves and stabilize exchange rates.

Experts believe this push could be a turning point for African economies. Mr. Denys Denya stated, “We are also supporting local currency arrangements in strategic value chains. This helps to reduce demand for dollars and gives economies more room to manage their resources effectively.”

The bank’s total assets rose to $48.5 billion in 2025, with net income increasing to $1.2 billion during the same period. These figures indicate growing confidence in Afreximbank’s approach amid challenging conditions.

The Federal Reserve is expected to keep its policy rate unchanged in an upcoming meeting, adding another layer of complexity to the situation. As geopolitical tensions persist, the effectiveness of Afreximbank’s initiative will be closely monitored.

The push for local currency trade could become a major turning point for African economies seeking greater independence from the dollar’s fluctuations and pressures.

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The Central Bank of Nigeria (CBN) has taken decisive action by dissolving the board and management of Union Bank of Nigeria as of January 1, 2024, due to significant financial irregularities. This intervention highlights the serious regulatory concerns raised by a forensic audit report that scrutinized the bank’s financial reporting practices and transactions under its former ownership.

The audit revealed alarming findings, including a $300 million facility obtained from the African Export-Import Bank (Afreximbank) that was improperly transferred onto Union Bank’s balance sheet without adequate disclosure. Such practices not only violate regulatory standards but also undermine the trust of customers and stakeholders in the banking sector.

As a result of the CBN’s intervention, Union Bank remains under the management of the central bank, with ongoing oversight expected to continue until at least March 25, 2026. Despite these challenges, the CBN has expressed confidence in Union Bank’s ability to meet its obligations to customers and stakeholders, assuring the public that the bank’s operational status remains unchanged.

By the third quarter of 2025, Union Bank is projected to be on a path to recovery, with expectations to fulfill a new capital requirement of N200 billion. This recovery plan is crucial for restoring confidence in the bank and ensuring its long-term viability in the competitive banking landscape of Nigeria.

In light of the recapitalization efforts, the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) has reported that there have been no job losses in the banking sector as of April 2026. Nike Joseph, a representative from ASSBIFI, stated, “As of today, there has been no report of job loss. However, we have our eyes on them; we are monitoring.” This statement underscores the association’s commitment to safeguarding employment within the sector during this tumultuous period.

Furthermore, the CBN’s assurance that Union Bank is fully capable of meeting its obligations is a critical factor in maintaining customer trust. The central bank’s proactive stance aims to stabilize the banking environment and prevent further financial distress among institutions in Nigeria.

Historically, Union Bank of Nigeria has undergone significant transformations, including its absorption of Barclays Bank Nigeria following the 1979 Indigenisation Policy. This rich history adds a layer of complexity to the current situation, as the bank navigates through regulatory scrutiny and strives for recovery.

As developments unfold, stakeholders will be closely monitoring Union Bank’s progress and the effectiveness of the CBN’s intervention. Details remain unconfirmed regarding the full impact of these changes on the bank’s operations and its future in the Nigerian banking sector.

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