Nigeria’s headline inflation rate declined to 14.63% in September from 15.39% in August, marking the fourth consecutive fall in the annual rate, according to the National Bureau of Statistics (NBS). On a month-on-month basis, headline inflation moderated to 0.06% from 0.71% in August, indicating that average consumer prices rose at a much slower pace during the month. The moderation was supported by lower food prices, which declined by 1.55% month-on-month after increasing by 1.02% in August. Meanwhile, core inflation, which excludes agricultural produce and energy prices, showed a mixed trend. Annual core inflation declined to 12.95% in September from 22.11% in the corresponding period of 2025. However, on a month-on-month basis, core inflation accelerated to 1.11% from 0.06% in August, pointing to renewed price pressures across other components of the consumer basket. From a monetary policy perspective, the continued moderation in headline inflation provides some support for the Central Bank of Nigeria’s (CBN) following its 350bps policy rate cut to 23% in September 2026. However, the acceleration in monthly core inflation and the elevated cost of food and energy could limit the scope for further aggressive monetary easing in the near term. Overall, the report signals progress in containing inflation, although the improvement remains uneven across the consumer basket.
Nigeria has presented 65 investment projects requiring a combined $78.5bn in capital at the IMF and World Bank Annual Meetings in Bangkok, as the Federal Government seeks to attract domestic and foreign investment into key sectors of the economy. The projects could create approximately 367,000 jobs, according to government estimates. Oil, gas and power account for $36.4bn of the funding requirement, while transport and maritime projects account for $25.0bn. Other opportunities cover agriculture, manufacturing, mining, technology and healthcare. The amount represents the capital required for the proposed projects, with funding being sought from investors. Successful financing and implementation could expand productive capacity, improve transport infrastructure, and support employment. Foreign investment inflows could also strengthen FX liquidity, while project execution could create financing and business opportunities for banks, construction firms and industrial companies. However, the economic benefits will depend on securing actual funding commitments, maintaining stable investment conditions and delivering the projects efficiently. Any public guarantees or government funding commitments would also need to be assessed for their fiscal implications. Overall, the initiative supports Nigeria’s effort to attract long-term capital, although the announced $78.5bn should be treated as a funding requirement until investment commitments materialize.
Money Market
System liquidity saw an increasing trend throughout the trading week, opening at ₦4.04 trillion on Monday and closing at ₦6.28 trillion driven by primary market repayment. Week-on-week, the Nigerian Overnight Financing Rate (NOFR) held steady to close at 20.00%, while the Overnight (OVN) rates declined by 47bps to close at 20.38%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded on a calm note this week, as investors maintained adopted a wait and see approach ahead of the NTB auction. The week started on a calm note, with mild selling interest observed across the curve, with the 7-Oct bill quoted at 15.90%/15.70% to start the week. As the week progressed, the DMO released the NTB issuance calendar, which showed a planned offer of ₦5.4trn against ₦5.429trn in maturities, which pointed to a largely neutral borrowing outlook for the quarter. At Wednesday’s NTB auction, demand moderated significantly, with subscriptions reaching ₦1.03trn against ₦450bn on offer, down from over ₦4trn at the previous auction. The DMO allotted ₦269.06bn, reflecting a measured approach to borrowing despite subscriptions exceeding the offer. Stop rates on the 91-day and 182-day bills held steady to close at 16.30% and 16.50%, respectively, while the 364-day stop rate increased by 5bps to 15.90%, despite the DMO’s significant underselling. Post auction, the newly issued 14-Oct was seen quoted at 15.85%/15.65%. By week-end, activity remained subdued following the release of the inflation data, with trades concentrated on the newly issued 14-Oct bill, which was quoted at 15.70%/15.60% to close the week. Week-on-week, the average benchmark yield declined by 1bp to close at 17.81%.
Looking ahead, we expect a cautious session as investors look forward to the FGN bond auction.
FGN Bond Market
The FGN Bond market traded on a mixed note this week, as the release of the DMO’s Q4 issuance calendar triggered selling pressure early in the week, while buying interest at elevated yield levels supported a gradual recovery. The week started on a bearish note after the DMO released its Q4 bond issuance calendar with a planned supply of ₦5.75 trillion, representing a 44% increase from the Q3 calendar. This raised concerns over increased domestic borrowing and caused selling pressure across the curve, pushing the 2038 maturity from 16.90%/16.78% to 17.50%/17.35%. As the week progressed, mild buying interest emerged across the mid-to-long end of the curve, with the 2038 maturity retracing to 17.35%/17.25%, as buying interest picked up at higher yield levels. On the data front, headline inflation moderated to 14.6% y/y in September from 15.4% y/y in August, representing an 80bps decrease. Market sentiment improved following this release, driving yields on the 2038 maturity further down to 17.15%/17.00%. By week-end, mild buying interest persisted across the curve. The 2038 maturity opened at 17.15%/17.00% as investors maintained selective demand at yields above 17.00%. Additionally, trades were executed on the 2035 and 2036 maturities at 17.10% to close the week. Week-on-week, the average benchmark yield increased by 25bps to close at 16.16%.
We expect investors to stay on the sidelines as they adopt a wait and see approach ahead of the ₦1.75trn bond auction, with the auction outcome likely to set the tone for yield direction.
FGN Eurobond Market
The Eurobond market traded on a mixed note this week, driven by escalating geopolitical tensions and U.S. economic data. The week started on a mixed note, as uncertainty surrounding U.S.–Iran negotiations over the Strait of Hormuz and the potential for further escalation involving the Iran-backed Houthis kept geopolitical risks in focus. Sentiment improved as expectations of increased Russian diesel supplies following the U.S.-brokered energy ceasefire between Russia and Ukraine eased concerns over energy supply disruptions, combined with dovish comments from Fed President John Williams, who indicated that while another rate hike may be appropriate this year, he sees no need for further increases in 2027. However, as the week progressed, sentiment turned bearish following the release of U.S. CPI data, which came in hotter than expected. Headline inflation rose to 3.7% y/y from 3.4%, above the 3.6% forecast, which renewed concerns over further monetary tightening, pushing U.S. Treasury yields higher. This was followed by stronger-than-expected PPI data which came out at 5.0% against the 4.4% forecast, although a recovery in treasury yields, driven by a shift from riskier AI stocks into safe-haven assets, provided some support to the market. By week-end, sentiment remained mixed but positive as investors assessed Fed Chair Kevin Warsh’s remarks, where he did not signal an urgent need for a rate hike despite persistent inflationary pressures. Week-on-Week, the average benchmark yield declined by 27bps to close at 7.34%.
We expect market direction to be driven by evolving geopolitical developments.
Currency Market
The value of the Naira to the dollar depreciated by 0.08% week on week to close at ₦1,332.25/$ 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 0.07% to close at 247,539.73 points while market capitalisation also declined to close at N160.70 trillion. Market breadth was positive at 1.18x. Trading activity was active on the day, with the volume of shares traded declining by 10.12% to 257.70 million units, while total value of shares traded declined by 14.50% to ₦13.00 billion.
Reflecting the week’s performance, the NGX All-Share Index depreciated by 0.33%, as gains in LIVESTOCK (+44.49%), ETRANZACT (+42.98%), and AUSTINLAZ (+32.73%) were offset by declines in UPDCREIT (-11.88%), NASCON (-9.48%), and TRANSEXPR (-9.09%).
Overall, the NGX has posted a year-to-date gain of 59.07%. Other notable indices are the NGX Top 30 Index (-0.09%; -0.26% 1WK; 60.44% YTD), NGX Banking Index (-0.94%; -4.06% 1WK; 67.07% YTD), NGX Oil & Gas Index (0.00%; 3.30% 1WK; +131.96% YTD), and NGX Insurance Index (-0.05%; -0.85% 1WK; -9.23% YTD).
