Nigeria’s Federal Inland Revenue Service (FIRS) reported a significant 84.62% year-on-year rise in Value Added Tax (VAT) collections, reaching N6.72 trillion in 2024, driven by strong growth across both import and non-import categories. Non-import VAT surged by 75.09% to N5.13 trillion, while import VAT more than doubled, growing by 122.38% to N1.59 trillion. Company Income Tax (CIT) rose by 102.5% to N6.78 trillion, and Education Tax (EDT) recorded the highest growth at 127.8%. Despite these gains, oil-related tax revenue underperformed, with Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), and Upstream CIT generating N5.76 trillion—falling short of the N7 trillion target due to lower-than-expected crude oil production. However, VAT and CIT collections exceeded expectations, with import VAT achieving 144.3% of its target and non-import VAT surpassing projections by 20.7%. These results highlight Nigeria’s success in expanding its tax base and reducing reliance on oil revenue while emphasizing the need for continued efforts in revenue diversification.
Money Market
Market liquidity opened the day at ₦721.34 billion long. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 29.14% and 29.57%, respectively.
We expect rates to hover around current levels.
Treasury Bills Market
The FGN Treasury Bills Market started off the week on a calm note with trades consummated on the 22 Jan bill at 20.90% and 25 Nov OMO bills at 21.40%. The DEC OMO bills also garnered a bit of attention. Furthermore, demand was seen on the 11th Sept and 8 Jan bills both quoted 21.00/20.90. The 5 June bill was seen quoted at 26.00/24.90 while the 8 May bill was offered at 19.00%. On the last trading day of the week, the CBN floated 600bn across the long end. At the auction, N1trillion was sold out of a total subscription of N2.9trillion. Stop rates closed at 22.50% and 22.65% on the 347-day and 364-day bill, a 131bps and 119bps decline from the previous auction. Week-on-week, the average benchmark yield declined by 170bps to 23.36%
We expect activity to be skewed to the newly issued OMO bills.
FGN Bond Market
The FGN Bonds Market kicked off with the bond auction. At the auction, the DMO offered N450bn across the 29s, 31s and new 35s. A total of N606.455bn was sold out of total subscription of N669.94 billion. Stop rates on the 29s and 31s rose by 65bps and 50bps to 21.79% and 22.50% while the 35s closed at 22.60%. Sequel to the auction, the on-the run bonds were the most traded with quotes on the 29s, 31s and 35s at 21.70/21.60, 22.50/22.40 and 22.60/22.55, respectively. Week-on-week, the average benchmark yield declined by 1bp to 20.08%
We expect similar sentiments.
FGN Eurobond Market
The FGN Eurobonds Market traded on mixed sentiments in the week under review. The bearish sentiments were largely due to jitters ahead of FOMC Meeting, Trump tariffs and lower crude prices. The bulls surfaced after the Fed decision to hold rates steady as widely expected. Overall, it was a marginally bullish close to the week. Data this week showed that the US core PCE inflation held steady at 2.8% in December as expected. Week-on-week, the average benchmark yield declined by 12bps to 9.10%.
We await the ISM Manufacturing PMI data.
Currency Market
The value of the Naira to the dollar appreciated by 359bps to close at ₦1478.22/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) declined by 24bps to close at 104,496.12. Market capitalization also decreased, closing at ₦64.72 trillion. The market breadth was positive at 1.29x, with 36 advancers and 28 decliners. This performance was driven by gains in BETAGLAS (+10.00%), VITAFOAM (+9.98%) and NNFM (+9.98%), and losses in OANDO (-10.00%), STANBIC (-9.94%), and IKEJAHOTEL (-9.84%).
Trading activity was robust on the day, with the volume of shares traded increasing by 135.63% to 1.17 billion units, while the total value of shares traded increased by 28.52% to ₦15.20 billion. The most actively traded stocks by volume were NSLTECH with 599.54 million units, FBNH with 85.45 million units, and VERITASKAP with 67.34 million units. In terms of value, FBNH led with ₦2.54 billion, followed by OANDO at ₦2.22 billion, and GTCO at ₦2.03 billion.
Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week gain of 0.87% with an overall year-to-date gain of 1.63%. Other notable indices are the NGX Top 30 Index (-0.06%; 1.54% 1WK; 1.63% YTD), NGX Banking Index (-0.33%; 4.56% 1WK; 9.76% YTD), NGX Oil & Gas Index (-0.01%; 0.97% 1WK; -1.61% YTD), and NGX Insurance Index (0.96%; -4.94% 1WK; -1.36% YTD)