Nigeria’s economy expanded by 3.9% in the first half of 2025, up from 3.5% in the same period of 2024, reflecting the positive impact of ongoing fiscal and monetary reforms, according to the latest Nigeria Development Update (NDU) released by the World Bank. The report credited the Tinubu administration’s bold steps, exchange rate unification, fuel subsidy removal, and tighter monetary policy for stabilising macroeconomic conditions. However, it cautioned that these gains have yet to translate into tangible improvements in living standards, as many Nigerians continue to struggle with high food inflation, poverty, and weak income growth. The World Bank highlighted robust performance in the services and non-oil sectors, moderate gains in oil production, and improvements in Nigeria’s external position, with foreign reserves surpassing $42 billion and the current account surplus rising to 6.1% of GDP. Fiscal discipline has also improved, with the federal deficit projected at 2.6% of GDP and public debt expected to decline from 42.9% to 39.8% of GDP, marking the first drop in over a decade. Looking ahead, the Bank maintained a cautiously optimistic outlook, projecting GDP growth to rise modestly to 4.2% in 2025 and 4.4% by 2027. However, it warned that sustaining reform momentum, improving policy consistency, and investing in human capital and infrastructure will be essential to ensuring that reform dividends reach ordinary Nigerians.
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1Money Market
System liquidity remained buoyant throughout the trading week, opening at ₦6.12 trillion on Monday and closing at ₦3.39 trillion on Friday driven by OMO auction outflow and NTB auction outflow. Week-on-week, the Open Buy Back (OBB) remained steady to close at 24.50%, while the Overnight (OVN) rates increased by 8bps to close at 24.97%.
We expect rate to continue to hover around this level, as we anticipate OMO maturity and bond coupon inflow.
Treasury Bills Market
The Treasury Bills market traded on a relatively calm to active note throughout the week, driven by a series of OMO and NTB auctions that reflected the CBN’s firm stance on rate moderation. The week opened with an OMO auction where ₦600bn was offered across the 85-day, 99-day, and 120-day maturities, recording strong demand with total subscriptions of ₦4.13trn as the apex bank allotted ₦998.1bn, while stop rates on the 120-day bill declined by 44bps to 20.17%. Midweek, the CBN conducted another OMO auction featuring longer tenors, 168-day and 196-day maturities, offering ₦300bn each and recording total subscriptions of ₦4.43trn, with ₦3.04trn allotted and stop rates dropping by 68bps to 19.49%. Attention later shifted to the NTB auction, where the DMO offered ₦570bn across standard maturities, recording ₦1.06trn in total subscriptions and cutting stop rates across tenors, with the 364-day bill falling sharply by 101bps to 15.77%. Subsequently, unmet bids filtered into the secondary market, pushing the newly issued 364-day bill to trade around 15.65/15.35. The week closed quietly following another OMO auction, where ₦600bn was offered across 81-day, 109-day, and 151-day maturities, attracting ₦2.08trn in total subscriptions and ₦1.28trn in sales, with stop rates settling at 19.35%, 19.39%, and 19.44%, respectively. Overall, the market maintained a bullish tone, underpinned by robust system liquidity and the CBN’s continued efforts to guide yields lower. Week-on-week, the average benchmark yield declined by 64bps to close at 17.32%.
We expect this sentiment to persist, as CBN seems to be keen on reducing system liquidity.
FGN Bond Market
The FGN Bonds market traded on a quiet to mildly bearish note throughout the week, with limited activity and yields hovering around key resistance levels. The week opened with a subdued tone as investors stayed on the sidelines awaiting fresh catalysts, while trades were seen on the 2029s at 16.00% and the 2033s quoted around 15.95/15.35. As the week progressed, mild bearish sentiment emerged, pushing yields slightly higher, with the 2033s quoted at 15.95/15.75 and later trading around the 16.00% handle, indicating a firm resistance level for mid-term papers. The market eventually closed the week quietly, with rates largely unchanged, reflecting a cautious investor tone and stable market sentiment in the absence of significant macro or policy triggers. Week-on-week, the average benchmark yield declined by 33bps to close at 15.84%.
We also look forward to Q4 auction calendar and inflation print.
FGN Eurobond Market
The Eurobond market traded mixed through the week, shaped by persistent concerns over the prolonged U.S. government shutdown and shifting macroeconomic cues. The week began on a cautious note, with bearish sentiment dominating amid the shutdown, while Brent crude climbed to $65.8/bbl after OPEC+ announced a smaller-than-expected production hike for November. As the week progressed, yields inched higher after the U.S. Senate failed to reach a consensus to avert the shutdown, reinforcing investor caution. Midweek, trading remained calm as participants awaited the release of the FOMC meeting minutes, even as the shutdown entered its eighth day. Sentiment improved slightly after the minutes revealed policymakers were leaning toward further rate cuts this year, leading to a brief rally. However, the week closed on a volatile note as markets reversed course following Trump’s threat to impose 100% tariffs on China, which triggered a sharp rise in yields and renewed risk-off sentiment. Week-on-Week, the average benchmark yield increased by 13bps to 7.93%.
We look forward to more update on the US-China tariff saga and the tentative release of U.S. PPI data given the shutdown ends.
Currency Market
The value of the Naira to the dollar appreciated by 0.72% to close at ₦1455.17/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) appreciating by 54bps to close at 146,988.04. Market capitalization also increased, closing at ₦93.31 trillion. Market breadth was positive at 1.01x. Meanwhile, trading activity was mixed on the day, as the volume of shares traded increased by 11% to 385.58 million units, while the total value of shares traded declined by 12% to ₦10.45 billion.
Reflecting the week’s performance, the NGX All-Share Index recorded a 2.37% appreciation, as gains in SOVRENINS (+16.73%), OMATEK (+12.30%) and MANSARD (+11.81%) were offset by declines in LIVINGTRUST (-14.61%), NEIMETH (-10.96%), and UHREIT (-9.98%).
Overall, the NGX has posted a year-to-date gain of 42.81%. Other notable indices are the NGX Top 30 Index (0.57%; 2.44% 1WK; 40.68% YTD), NGX Banking Index (-0.08%; -0.41% 1WK; 40.19% YTD), NGX Oil & Gas Index (-0.14%; 2.90% 1WK; -1.91% YTD), and NGX Insurance Index (-1.30%; 3.69% 1WK; 75.13% YTD).
