The Federal Government has issued transition guidelines for the implementation of the Tax Acts 2025, providing a roadmap for taxpayers, tax authorities, and other stakeholders as Nigeria moves from the old tax regime to the new framework that came into effect on January 1, 2026. The guidelines clarify how existing tax obligations, ongoing assessments, pending disputes, and filing requirements will be treated during the transition period. The move is aimed at ensuring certainty and preventing confusion that could arise from the introduction of the new tax laws. For businesses and individuals, the guidelines offer much-needed direction on compliance requirements and help reduce the risk of double taxation, conflicting interpretations, or administrative disruptions. The implementation of the Tax Acts 2025 represents a significant step in Nigeria’s efforts to modernize its tax system, broaden the revenue base, and improve efficiency in tax administration. However, the effectiveness of the reforms will depend largely on proper implementation, continuous stakeholder engagement, and adequate public sensitization to ensure that taxpayers fully understand their obligations under the new regime. Ultimately, the success of the new tax framework will depend on effective implementation, public awareness, and cooperation between taxpayers and tax authorities to ensure compliance and minimize disruptions during the transition period.
According to the Central Bank of Nigeria’s latest monetary and credit statistics, total credit to the government rose sharply to ₦40.38 trillion in May 2026, compared with ₦22.99 trillion recorded in the same period last year. The increase of ₦17.39 trillion represents a significant 75.6% year-on-year surge in lending exposure to the public sector. The sharp rise in government borrowing underscores the Federal Government’s increasing reliance on domestic financing to bridge fiscal gaps and support expenditure needs. However, the development has raised concerns about the growing exposure of the financial system to public sector debt and the potential implications for fiscal sustainability. The surge in credit to the government also highlights the risk of crowding out private sector borrowing, as increased government demand for financing could limit credit availability for businesses and households, particularly in an environment of elevated interest rates and tight liquidity conditions.
Money Market
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1System liquidity decreased throughout the trading week, opening at ₦4.38 trillion on Monday, and closing at ₦4.08 trillion driven. Week-on-week, the Open Buy Back (OBB) held steady to close at 22.00%, likewise, the Overnight (OVN) rates declined by 9bps to close at 22.32%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded on an active note this week. The week started on a relatively subdued note as participants largely shifted their attention to the FGN Bond auction, resulting in muted activity across the curve. The newly issued 17 June bill eased slightly to 17.20%/17.00%. Sentiment turned mildly bearish mid-week, following the announcement of the CBN’s OMO auction, which triggered selling interest across the market, particularly on the 5 November bill, which traded around the 16.40% level. The OMO auction was the week’s key event, with the Apex Bank offering ₦600 billion across the 70-day and 140-day tenors. Investor demand was robust, with total allotments reaching ₦2.06 trillion from subscriptions of ₦2.09 trillion, which cleared at stop rates of 20.75% and 19.99%, respectively. Towards the end of the week, mild selling pressure persisted across the curve, with activity concentrated on the newly issued 17 June bill. The bill traded as high as 17.45%/17.15% before selective demand emerged at attractive levels, driving yields lower to around 17.35%/17.20%. However, the week ended on a calmer note, with the 17 June bill quoted at 17.80%/17.30%, reflecting renewed selling interest. Week-on-week, the average benchmark yield increased by 35bps to close at 18.10%.
We expect a calm week as market participants await the release of the Q3 NTB issuance calendar.
FGN Bond Market
The FGN bond market traded on a bearish note this week, with sentiment largely shaped by the FGN Bond auction and persistent selling pressure across the curve. Trading began on a relatively quiet note as market participants focused on the DMO’s offer of ₦600 billion each across the 2035 and 2037 maturities. The auction recorded robust demand, with total subscriptions of ₦1.41 trillion and allotments of ₦1.22 trillion. However, investors demanded significantly higher yields, as stop rates on the 2035 and 2037 maturities jumped by 134bps and 131bps to close at 18.34% and 18.35% respectively. Following the auction, bearish sentiment persisted as investors continued to digest the higher clearing rates and reprice yields across the curve. Activity was concentrated at the mid-to-long end, particularly on the 2035 and 2037 maturities, which remained under selling pressure throughout the week. Mid-week, we saw pockets of demand on some off-the-run securities, particularly the 2031 maturity, largely driven by limited sellers in the market. Towards the end of the week, the 2035 maturity traded progressively higher, moving from around 18.32%/18.25% at the start of the week to as high as 18.95%/18.70% by Friday, as weak demand persisted and investors continued to seek higher yields, while the 2037 maturity remained under selling pressure, trading as high as 18.85%/18.70% to close the week. Week-on-week, the average benchmark yield increased by 41bps at 17.34%.
We expect the bearish sentiment to persist as market participants wait for clearer direction on supply concerns and anticipate higher yields.
FGN Eurobond Market
The Eurobond market had a broadly bearish week, with sentiment largely driven by uncertainty surrounding the fragile U.S.-Iran peace process and growing expectations of tighter U.S. monetary policy. The market initially came under pressure despite reports of progress in talks between the U.S. and Iran in Switzerland, as conflicting statements over nuclear inspections and the scope of the agreement raised doubts about the sustainability of the proposed deal. Mid-week, sentiment remained cautious after President Trump stated that Iran had agreed to unlimited nuclear inspections, a claim that Tehran strongly denied, further undermining confidence in the peace process. However, the market recovered some of its earlier losses after reports emerged that Iran had assured the U.S. that no tolls would be imposed on ships transiting the Strait of Hormuz, which offered some relief to investors. Towards the end of the week, geopolitical concerns resurfaced after the U.N. International Maritime Organization suspended escort operations in the Strait of Hormuz following reports of an attack on a vessel near Oman. Iran’s subsequent assertion of its right to control shipping through the strategic waterway and warning to Gulf states against siding with the U.S. reinforced concerns about the preliminary peace deal. Meanwhile, U.S. inflation data, the PCE price index rose to 4.1% from 3.8%, which strengthened expectations of the hawkish stance from the Fed, with markets increasingly pricing in a 50 basis points of rate hikes by December. Week-on-Week, the average benchmark yield increased by 19bps to close at 7.04%.
We expect market direction to be driven by evolving geopolitical developments, ADP Employment change, Job data and NFP data.
Currency Market
The value of the Naira to the dollar depreciated by 0.86% week on week to close at ₦1,380.93/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) depreciating by 0.66% to reach 232,049.0 points while market capitalization declined to close at N148.9 trillion. Market breadth was negative at 0.35x. Trading activity was mixed on the day, with the volume of shares traded declining by 1.26% to 388.60 million units, while total value of shares traded increased by 4.21% to ₦18.40 billion.
Reflecting the week’s performance, the NGX All-Share Index depreciated by 1.65%, as gains in MCNICHOLS (+26.47%), INTENEGINS (+14.43%), and GTCO (+10.69%) were offset by declines in TRANSEXPR (-26.79%), DEAPCAP (-23.31%), and ABBEYBDS (-20.30%).
Overall, the NGX has posted a year-to-date gain of 49.12%. Other notable indices are the NGX Top 30 Index (-0.63%; -2.28% 1WK; +48.29% YTD), NGX Banking Index (-0.28%; -1.00% 1WK; +40.53% YTD), NGX Oil & Gas Index (-4.66%; -7.74% 1WK; +90.31% YTD), and NGX Insurance Index (-2.23%; -5.84% 1WK; -6.07% YTD).
