Nigeria’s economy is projected to grow by 3.3% in 2024 and 3.6% in 2025, according to the World Bank, reflecting a cautiously optimistic outlook driven by macroeconomic reforms aimed at stabilizing the business environment. This growth is expected to strengthen to 3.8% by 2027, assuming continued reforms. The primary drivers of growth are non-oil sectors, such as financial services, telecommunications, and information technology, with a gradual rebound in oil production aligning with Nigeria’s OPEC+ quota. Inflation, projected to peak at 31.7% in 2024, is expected to ease to 22.1% in 2025 and further moderate to 15.9% by 2027, supported by monetary tightening and the National Bureau of Statistics’ CPI rebasing in January 2025. In contrast, the International Monetary Fund (IMF) provides a more cautious projection, forecasting 3.0% growth in 2025 and 2.7% in 2026, citing weaker oil receipts and global uncertainties, including a 40% chance of a global recession. The IMF also predicts higher inflation, averaging 26.5% in 2025 and spiking to 37.0% in 2026, driven by structural constraints and exchange rate pass-through effects. The World Bank’s outlook emphasizes that robust services sector activity and recovering domestic demand will drive growth, but without accelerated reforms, Nigeria’s economic potential remains constrained, leaving millions vulnerable to poverty.

Money Market 

System liquidity opened the session with a ₦1.78 trillion surplus. The Open Buy Back (OBB) and Overnight (OVN) rates declined by 510bps and 518bps, respectively, to close the day at 26.50% and 26.88%.

FGN Treasury Bills Market

The FGN Treasury Bills Market opened the week on a quiet note ahead of the NTB auction scheduled for midweek. At the auction, the DMO allotted ₦714.37 billion from total subscriptions of ₦1.54 trillion, compared to the ₦400 billion initially offered. The results reflected market participants pricing a lower stop rate on the 364-day bill, with the DMO allotting ₦650.28 billion at a stop rate of 19.60% against an initial offer of ₦250 billion, representing a 3bps decline from the previous auction. For the shorter maturities, the stop rate on the 91-day bill declined by 50bps to 18.0%, while the 182-day bill dropped by 100bps to close at 18.5%. As the week progressed, supported by strong system liquidity, activity was largely centered on the newly issued 364-day bill, which was quoted at 19.50%/19.30%. To close out the week, the CBN announced an OMO auction, offering ₦500 billion across 298-day and 319-day maturities. At the auction, a total of ₦1.01 trillion was sold from subscriptions totaling ₦1.39 trillion. The stop rate on the 298-day increased by 318bps to 22.37%, while the 319-day increased by 328bps to 22.73%. Week-on-week, the average benchmark yield decreased by 20bps to close at 20.27%.

We expect a quiet start to the week, with focus shifting towards the upcoming bond auction.

FGN Bond Market

The FGN Bond Market also opened on a subdued note, with investors selectively picking across the curve. However, momentum picked up midweek following the release of the bond auction circular and the Q2 bond issuance calendar, indicating offerings of the 2029 and 2033 maturities for April and May, along with new issuances of 2030 and 2032 bonds in June. As the week advanced, trading remained muted, as investors maintained a cautious stance ahead of the bond auction scheduled for Monday. Week-on-week, the average benchmark yield decreased by 1bp to close at 18.60%.

We expect the results of the bond auction, with ₦350 billion on offer across the 2029 and 2031 bonds, to set the tone for market direction.

FGN Eurobond Market

The Eurobond Market began the week with bearish sentiment as investors reacted to former President Trump’s comments regarding the Fed’s independence and uncertainties over Fed Chair Powell’s position. However, sentiment improved following Bessent’s announcement of a de-escalation in the US-China trade tensions, though optimism was short-lived as reports suggested that a full trade deal could take up to two to three years. As the week unfolded, positive news around plans for Nigeria’s relisting in the JP Morgan bond index helped lift the market, resulting in a marginal compression in yields across the curve. Toward the end of the week, investors turned cautious, locking in gains and keeping limited exposure over the weekend. On the data front, the flash manufacturing PMI printed at 50.7, higher than the analyst forecast of 49.0, while the flash services PMI came in at 51.4, below the 52.8 estimate. Week-on-Week, the average benchmark yield decreased by 53bps to 9.83%.

We look ahead to key economic data releases, including JOLTS job openings, ADP employment data, GDP growth figures, Core PCE inflation, and the NFP data.

Currency Market

The value of the Naira to the dollar appreciated by 0.02% to close at ₦1599.55/$ at the Nigerian Foreign Exchange Market Window (NFEM).

Equities Market

The local bourse ended the day with the benchmark NGX All-Share Index (ASI) declining by 30bps to close at 105,752.61. Market capitalization also decreased, closing at ₦66.47 trillion. Market breadth was positive at 2.73x, with 41 advancers and 15 decliners. Meanwhile, trading activity was robust on the day, as the volume of shares traded increased by 30.4% to 428.08 million units, while the total value of shares traded increased by 94.54% to ₦20.17 billion.

Reflecting the week’s performance, the NGX All-Share Index posted a 1-week gain of 1.45%, driven by gains in INTBREW (+40.00%), NASCON (+26.22%) and AFRIPRUD (+25.64%), despite being weighed down by declines in VFDGROUP (-82.19%), JOHNHOLT (-18.16%), and DANGCEM (-10.00%). Overall, the NGX has posted a year-to-date gain of 2.74%. Other notable indices are the NGX Top 30 Index (-0.48%; 1.31% 1WK; 2.70% YTD), NGX Banking Index (1.55%; 5.06% 1WK; 4.15% YTD), NGX Oil & Gas Index (0.07%; -0.07% 1WK; -10.73% YTD), and NGX Insurance Index (1.50%; 7.30% 1WK; -6.97% YTD).