The distinction between volume and depth

The distinction between volume and depth.

Splitbox Journal • Founder Notes

Liquidity is not a headline number, it is the ability to trade without moving the price.

Nairametrics reports that turnover on the Nigerian Foreign Exchange Market rose to $1.41 billion on August 17, 2026. This is the highest level in five weeks. On the surface, this seven-fold increase from the prior week suggests a market finally finding its feet. The Naira even strengthened to a five-month high near N1,350 per dollar.

But for those of us hiring, managing payroll, and moving capital across the continent, these spikes often tell a different story. The market recorded only 394 total deals for that $1.41 billion volume. This ratio suggests that liquidity is not yet a distributed utility. It is a lumpy series of large, episodic corporate exits or state-led interventions. If you are not one of the few dozen entities involved in those 178 interbank deals, the market can still feel remarkably thin.

True market depth is measured by the activity of the middle, not the extremity of the top. When we hire talent in Lagos or Johannesburg, we look for consistency in their output. We should view the NAFEM the same way. A market that jumps 700 percent in six days is a volatile market, not a deep one. Until these volumes become a boring, daily reality rather than a breaking news event, the prudent allocator keeps a high cash buffer. We are looking for the point where a million-dollar trade is absorbed without a headline.

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— Splitbox Journal