• Report

Green Light for Growth – Analysing the Transformative Impact of FATF Delisting

Nigeria's Financial Glow-Up: Off the Naughty List and into the Big Leagues

A Quick Look at the Big Picture

Picture this: on 24 October 2025, Nigeria got some brilliant news. The world’s top financial watchdog, the Financial Action Task Force (FATF), officially took the country off its list of “Jurisdictions under Increased Monitoring”—which everyone really just calls the “grey list”. Think of it as being let out of the financial sin bin. This wasn’t just a pat on the back; it was the result of a tough, two-year reform marathon that’s set to shake up Africa’s biggest economy in the best way possible. Getting off this list is a huge strategic win. It tells the world that Nigeria is a safer bet, boosting its street cred in global finance and opening the taps for fresh investment and growth. This report takes a deep dive into what this all means for Nigeria’s money market—the engine room of its financial system. We’ll look at the hard graft that went into the reforms, what the market looked like before, and how this news is changing the game for everyone involved.

The main takeaway? Getting the all-clear from the FATF is like a shot of adrenaline for the Nigerian money market. For starters, it’s a massive confidence boost for international investors. We expect to see more foreign cash flowing into short-term government and corporate IOUs, like Treasury Bills (T-Bills) and Commercial Papers (CPs). This means more cash in the system, which is always a good thing. Secondly, with Nigeria looking less risky, the cost of borrowing should drop. That’s great news for the Government, which can save money on its debts, and for top-tier companies, who will find it cheaper to raise funds. It might finally stop the Government’s borrowing from “crowding out” everyone else. For the players on the ground, the perks are real.

The Central Bank of Nigeria (CBN) gets a gold star for its policies. Commercial banks will find it easier and cheaper to deal with their international partners, with less red tape to cut through. And for the finance chiefs at big companies, a livelier CP market means an easier way to manage their day-to-day cash flow. But let’s not get ahead of ourselves. While the outlook is sunny, it comes with a condition. The FATF is keeping a close eye on Nigeria for the next 12 months to make sure these changes stick. So, all the long-term benefits we’re talking about depend on the country staying on the straight and narrow. This isn’t the finish line; it’s the start of a new era where keeping up these high standards is the key to Nigeria’s financial health and prosperity.

The FATF Lists: A Global Report Card for Finance

To really get why this is such a big deal for Nigeria, you need to understand what the FATF is and why its lists matter so much. Set up by the G7 in 1989, the FATF is basically the global referee for keeping money clean. It sets the international rules for fighting money laundering, terrorist financing, and the funding of nasty weapons. The rulebook is known as the 40 Recommendations, and countries are expected to follow it. The FATF checks up on them with peer reviews, called Mutual Evaluations, to see if they’re just talking the talk or actually walking the walk.

The "Grey" and "Black" Lists Explained

Based on these check-ups, the FATF publicly names and shames countries with dodgy financial systems in two lists, which get updated three times a year. The difference is important:

  • The Black List (High-Risk Jurisdictions subject to a Call for Action): This is for countries with really serious problems that aren’t playing ball. The FATF tells its members to be extra careful with them and can even call for financial sanctions. It’s the worst place to be and can leave a country financially isolated.
  • The Grey List (Jurisdictions under Increased Monitoring): This is for countries that have some weaknesses but have promised to fix them with a clear action plan. They’re watched closely and have to show they’re making progress. It’s not as bad as the black list, but it’s still a big red flag for the rest of the world, signalling higher risk and causing a whole host of economic headaches. This is the list Nigeria was on—a country trying to do the right thing.

The Price of Being on the Grey List

Being on the grey list isn’t just bad for your reputation; it’s bad for your wallet. It acts like a massive barrier to investment and trade. Global banks and investors, wanting to stay out of trouble themselves, tend to back away from grey-listed countries.

Here’s how it works: when a country is on the grey list, international banks have to do “Enhanced Due Diligence” (EDD) on any transaction linked to it. EDD is a pain—it’s expensive, takes ages, and involves a lot more paperwork. To avoid the hassle, many banks just “de-risk” by limiting or cutting ties with banks in that country altogether. This has a real, measurable impact. A major 2021 study by the International Monetary Fund (IMF) found that being on the grey list cuts a country’s capital inflows by an average of 7.6% of iits GDP. That includes a 3.0% drop in foreign direct investment and a 2.9% drop in portfolio investment.

For a country like Nigeria, which relies on international trade, money sent home from abroad, and investment, this really stings. It means less cash in the system, higher costs for moving money, and fewer interested investors. This context shows just how massive a victory getting off the list truly is.

Nigeria's Two-Year Financial Makeover

Nigeria’s journey from the grey list to the all-clear was a focused, two-year national effort, driven by top-level political will and some deep, structural spring-cleaning. The whole saga kicked off in February 2023 when the FATF put Nigeria on its watch list, and it all came to a happy conclusion in October 2025.

A Wake-Up Call in 2023

When Nigeria landed on the grey list, the FATF pointed out several weak spots in its defences against financial crime. The message was loud and clear: Nigeria had to get tougher on enforcement, get its various agencies to work together better, and make its financial system more transparent. Instead of sulking, the Nigerian government saw it as a “call to action”—a golden opportunity to fast-track reforms that were long overdue and central to its economic transformation plans.

The Action Plan and the Big Fixes

In response, Nigeria signed up to a hefty 19-point action plan to tackle every single issue the FATF had raised. Putting this plan into action was a massive undertaking, involving big changes to laws, institutions, and day-to-day operations.

  • Putting Muscle into the Law: The bedrock of the reform was getting two key laws up and running properly: the Money Laundering (Prevention and Prohibition) Act, 2022, and the Terrorism (Prevention and Prohibition) Act, 2022. These laws gave the authorities the teeth they needed to supervise, enforce, and prosecute financial crimes, bringing Nigeria’s rulebook in line with global standards.
  • Getting Everyone on the Same Page: A huge part of the success was creating a central command for the effort. The Nigerian Financial Intelligence Unit (NFIU), led by its Director/CEO, Ms Hafsat Abubakar Bakari, was the star player. The NFIU led a National Task Force that brought everyone to the table—the Central Bank, the Ministry of Finance, the Ministry of Justice, the Economic and Financial Crimes Commission (EFCC), and even folks from the private sector. This “all-hands-on-deck” approach made sure the reforms happened smoothly, without the usual squabbling between agencies.
  • Shining a Light with the Beneficial Ownership Register: One of the big criticisms in Nigeria’s 2021 FATF review was that it was too easy to hide who really owned a company. A major win was the launch of a public Beneficial Ownership Register, which made it much clearer who was pulling the strings behind Nigerian companies.
  • Tougher Supervision and Enforcement: The reforms also meant stricter, more risk-focused supervision of banks and what are known as Designated Non-Financial Businesses and Professions (DNFBPs)—think estate agents, lawyers, and casinos, which can be hotspots for dodgy dealings. This was backed up by practical steps, like training law enforcement on how to gather evidence, improving the quality of suspicious. transaction reports, and showing a real increase in the number of complex money laundering cases being investigated and prosecuted.

The Results Are In

The hard work paid off. Nigeria ticked off all 19 items on its action plan ahead of schedule. This progress was officially recognised with upgrades to its compliance ratings on several key FATF Recommendations. Specifically, Nigeria’s scores for Recommendations 23, 24, 25, 28, and 32 all went from “Partially Compliant” to “Largely Compliant” or “Compliant”.


After a successful on-site visit from an FATF team to check that the reforms were real and would last, the FATF Plenary gave Nigeria the green light on 24 October 2025. President Bola Ahmed Tinubu celebrated the news as “a major milestone in Nigeria’s journey towards economic reform, institutional integrity and global credibility” and a “strategic victory for our economy”. While the official news is clear, some mistaken reports have circulated suggesting Nigeria is still on the list, showing that perceptions can take a while to catch up. This just goes to show how important it is for Nigeria to keep shouting about its commitment to these reforms to win over any remaining doubters.

The Nigerian Money Market: A User's Guide

The Nigerian money market is the bedrock of the country’s financial system. It’s the main stage for short-term borrowing and lending, a bit like a financial flea market for IOUs that are due within a year. It’s vital for keeping the government and banks topped up with cash, helping the central bank’s policies ripple through the economy, and giving people a safe place to park their spare funds. To give you an idea of its size, as of August 2025, money market funds in Nigeria were managing a cool ₦3.59 trillion.

The Main Players and What They Do

The market is a bustling place, with a few key players calling the shots:

  • Central Bank of Nigeria (CBN): The CBN is the top dog, the ultimate regulator. It sets the main interest rate (the Monetary Policy Rate, or MPR), controls the amount of cash sloshing around the system through its Open Market Operations (OMO), and issues the Government’s short-term IOUs.
  • Debt Management Office (DMO): This is the government agency in charge of the national debt. It teams up with the CBN to decide when and how many government securities, like T-Bills, to sell.
  • Commercial Banks: As the main go-betweens, banks are the most active players. They lend to each other to manage their daily cash needs and are huge investors in government securities like T-Bills.
  • Non-Bank Financial Institutions (NBFIs) and Companies: This is a mixed bunch, including pension funds, asset managers, insurance firms, and big companies. They jump in as investors looking for a safe, quick return, and in the case of companies, they also issue their own IOUs (Commercial Papers) to raise cash for things like stock and wages.

The Hottest Products on the Shelf

While there are a few different instruments, two really dominate the market:

  • Nigerian Treasury Bills (T-Bills): These are short-term IOUs issued by the Nigerian Government via the CBN. You buy them for less than their face value and get the full amount back when they mature. They come in 91-day, 182-day, and 364-day flavours and are seen as the safest bet in town because they’re backed by the full might of the government.
  • Commercial Papers (CPs): These are unsecured, short-term IOUs from big, reputable companies. CPs are a flexible and often cheaper way for firms to get cash for short-term needs than going to a bank. In Nigeria, they can be issued for up to 270 days and are traded on exchanges like the FMDQ.

The Economic Weather Report (Late 2024 - Early 2025)

The FATF news didn’t happen in a vacuum. Nigeria’s economy was going through a challenging but exciting phase. Here’s the backdrop:

  • Interest Rates on the Rise: To fight off stubborn inflation, the CBN had been on a mission, hiking the MPR by a massive 875 basis points to a record 27.50% by November 2024.

  • Pesky Inflation: Although it was starting to cool down, inflation was still high, eating into people’s spending power and keeping the pressure on the CBN.

  • A Shake-Up in Foreign Exchange: The government had made some big moves, like floating the naira and clearing a huge backlog of foreign exchange debts. This caused the currency’s value to drop sharply but was aimed at creating a fairer, more transparent system.

This mix of high interest rates and the Government’s need to borrow a lot of money created a specific squeeze in the money market. The juicy yields on risk-free T-Bills made them irresistible to local investors. This led to a “crowding-out” effect, where the Government’s borrowing hoovered up most of the available cash, making it harder and pricier for private companies to raise money by issuing CPs. It’s against this backdrop of tight cash and high government borrowing costs that the FATF’s decision lands with such a splash.

What This All Means for the Money Market

Getting Nigeria off the FATF grey list is a game-changer for the country’s money market. The effects are wide-ranging, touching everything from the amount of cash in the system to the price of investments and the way everyone does business. It has the power to kick-start a positive cycle, undoing many of the pressures the market has been under.

More Cash, More Investment

The most immediate and obvious effect is the surge in confidence among international investors. This move is a powerful, independent stamp of approval on Nigeria’s reforms, basically telling the world that the country is “open, compliant, and ready for deeper financial integration”. This renewed faith is expected to bring in a flood of foreign money, reversing the capital flight we saw when Nigeria was on the list. This new cash will mainly flow into the money market through Foreign Portfolio Investment (FPI) in easy-to-trade, short-term instruments like T-Bills and top-quality CPs. The IMF’s research suggests that being on the grey list can slash capital inflows by as much as 7.6% of GDP, which means the potential for a bounce-back is huge. This wave of foreign currency won’t just boost the amount of money available for lending; it will also shore up Nigeria’s foreign exchange reserves and help stabilise the naira. The extra liquidity will ease the squeeze caused by the CBN’s high interest rates, making life easier for both borrowers and lenders.

A Fresh Look at Risk and Rewards

A huge impact of the delisting is the rethink of Nigeria’s country risk premium. The FATF grey list is a global risk marker; taking it away lowers the perceived danger of investing in Nigeria. Financial experts are widely predicting that this will lead to a drop in the extra return (the risk premium) that international investors demand for holding Nigerian assets. This repricing of risk will directly affect the yields on money market instruments:

  • Treasury Bills: With more foreign buyers and a lower risk premium, the yields on T-Bills are set to fall. This will directly cut the Government’s borrowing costs, taking some pressure off the national budget.

  • Commercial Papers: As the yield on risk-free T-Bills drops, the yields on corporate CPs will likely follow. The credit spread—the extra bit of yield investors want for holding company debt over government debt—might also shrink as confidence in the Nigerian business environment grows. This means cheaper short-term funding for Nigeria’s top
    companies. 

This could also have a nice knock-on effect on Nigeria’s sovereign credit rating. Global rating agencies like Moody’s and Fitch see better FATF compliance as a sign of stronger institutions and better governance. Moody’s had already upgraded Nigeria’s outlook to positive in May 2025, thanks to the government’s reform efforts. The FATF delisting adds more fuel to this fire and could lead to further upgrades, creating a positive feedback loop of better creditworthiness and lower borrowing costs.

A New Playing Field for Everyone

The delisting will change the day-to-day reality for all the key players in the money market.

  • For the Central Bank of Nigeria (CBN): The FATF’s decision is a big thumbs-up for the CBN’s recent policy moves, especially those aimed at making the financial system more transparent and well-supervised. A steadier flow of foreign currency will ease the pressure on the country’s reserves, giving the CBN more wiggle room in managing monetary policy and the exchange rate.

  • For Commercial Banks: The benefits for the banking sector are instant and massive. With the grey-list stigma gone, dealing with international partner banks will become smoother and cheaper. The need for extra-cautious due diligence will disappear, cutting compliance costs and speeding up international transactions like trade finance and remittances. This improved access to global financial system will make it easier for them to serve their clients and manage their own international cash flow.

  • For Companies Issuing Debt: The delisting could breathe new life into the corporate debt market. Before, high T-Bill yields were pushing private borrowers out of the way. With government borrowing costs expected to fall, CPs will look more attractive to investors chasing a better. This along with more cash in the market will make it easier for companies to use the CP market for their short-term funding, giving them a vital and more affordable alternative to bank loans.

Crunching the Numbers: How the Market Reacted

Talk is cheap, but the market data tells a compelling story. By looking at the key numbers for T-Bills and CPs before and after the big announcement in October 2025, we can see a real shift in mood, demand, and borrowing costs.

The data below shows a clear and positive reaction, with government borrowing rates falling and the corporate funding scene looking much healthier, backing up everything we’ve discussed.

Table 1: A Look at Nigerian Treasury Bill Auctions (Q4 2024 – Q1 2026)

This table compares the results of T-Bill auctions around the time of the FATF delisting. The key things to watch are the Stop Rate (the effective yield and the government’s borrowing cost) and the Bid-to-Cover Ratio (how many bids were received for every naira on offer), which shows investor appetite.

What the T-Bill Numbers Tell Us:

The data shows a hefty drop in government borrowing costs right after the delisting news. The rate for the main 364-day T-Bill was a steep 20.65% in October 2024, reflecting the high-risk mood and tight money supply at the time. By the auction on 22 October 2025, just before the official announcement, that rate had already fallen to 16.14%. While cooling inflation and changing expectations about central bank policy also played a part, the delisting was a major catalyst. The massive jump in the bid-to-cover ratio for the 91-day bill in the 22 October auction (from 0.98 to a whopping 8.81) shows a huge surge in investor demand, likely as people got wind of the good news. This combo of falling rates and soaring demand is solid proof that the market gave Nigeria’s clean bill of health a big thumbs-up.

Table 2: A Snapshot of the Nigerian Commercial Paper Market (H1 2025)

The health of the Commercial Paper market is a great indicator of how easy it is for companies to get funding. This table shows some of the big CP deals in the first half of 2025, in the run-up to the delisting.

What the CP Market Tells Us:

The CP market was buzzing in the lead-up to the delisting, with Nigerian companies raising over ₦330 billion in the first quarter of 2025 alone. This shows that even with high interest rates, the CP market was a vital source of cash. The data also shows how much this cash cost. An MTN Nigeria CP issued in late 2024, when uncertainty was at its peak, came with a hefty 29.00% yield. By mid-2025, other companies like Jawa International and Skymark Partners were getting funding at rates in the 22-23% range. This suggests that corporate borrowing costs were already starting to ease as the market got better and confidence in Nigeria’s reforms grew. The delisting is set to speed up this trend, making CPs an even better deal for Nigerian businesses and helping this part of the money market to grow even stronger.

The Road Ahead: Strategy and Advice

Getting off the FATF grey list is a massive win for Nigeria, completely changing the game for its money market. But to make the most of this opportunity, everyone needs to be smart about what comes next. This means understanding the opportunities, spotting the risks, and having a clear game plan.

The Next 12-24 Months

The medium-term outlook is bright, but with a few ‘ifs’. The initial wave of good feeling and lower risk premiums should continue, making for a more stable and liquid market. The key thing to watch over the next year or two will be the tug-of-war between this positive momentum and what happens with Nigeria’s own economic policies.

A big piece of the puzzle is the 12-month “probation” period set by the FATF. During this time, Nigeria has to prove that its reforms weren’t just for show and are actually working day-to-day. Getting through this period successfully will be vital for locking in that newfound investor confidence. At the same time, what happens with inflation and the CBN’s interest rate decisions will still be major factors. If inflation keeps falling and the CBN feels it can start to lower the MPR, the downward trend in money market yields that the delisting started will get a serious boost.

Keeping the Ball Rolling: Risks and How to Dodge Them

The biggest risk is that everyone gets tired of all the hard work—a classic case of “reform fatigue.” The delisting can’t be seen as “mission accomplished”. If things slip back to the old, lax ways, Nigeria could find itself back on the grey list, and the damage to its reputation and economy would be huge.

To avoid this, the reforms need to become part of the furniture. This means:

  • Keeping the Team Together: The brilliant multi-agency teamwork led by the NFIU needs to become the new normal for fighting financial crime, not just a temporary.

  • Showing, Not Just Telling: The anti-corruption and regulatory bodies need to keep showing their teeth by investigating and prosecuting major financial crimes, proving that the new laws are being used.

  • Staying in the Loop: Nigeria needs to keep talking to the FATF and its regional partner, the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), to stay up-to-date with global standards and show it’s still commifled.

A To-Do List for the Key Players

To grab the opportunities on offer, here’s what the main players should be thinking about:

  • For Investors: It’s time to rerun the numbers. Both international and local investors should take a fresh look at the risk premium they attach to The delisting means it should be lower, which might uncover some bargains in Nigerian fixed-income assets. Keep a close eye on T-Bill auctions for good entry points as yields fall, and check out the growing CP market, especially for issues from companies with solid credit ratings.

  • For Policymakers (CBN, DMO, Ministry of Finance): The government needs to be open and clear about its progress during the probation period to build on the investor confidence it has They should use the new environment of lower borrowing costs to manage the national debt more effectively. And crucially, they must make sure that new tools like the Beneficial Ownership Register are actively used to investigate crimes, sending a strong message to anyone thinking of trying anything dodgy.

  • For Company Finance Chiefs: This is a golden opportunity. Finance teams should be reviewing their short-term funding plans right now. The CP market is now more liquid, easier to access, and potentially cheaper than it was before the delisting. Companies should get ready to issue CPs by obtaining an investment-grade credit rating and talking to financial advisors to take advantage of the better market conditions. This is a smart way to diversify funding away from just relying on bank loans and to lower the overall cost of capital.

Download report
What do you think?
Subscribe
Notify of
guest
1 Comment
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Tonnia
Tonnia
3 months ago

👍🏼

0
Reply
Insights

More Related Articles

  • Insights

BRB Monthly Market Report January 2026

MACROS

Nigeria’s macroeconomic landscape in January 2026 reflected a clear shift toward stabilization, supported by moderating inflation, improving foreign exchange dynamics, and growing international confidence in the reform trajectory of the economy. These developments provided a supportive backdrop for domestic financial markets and reinforced expectations of a more balanced macroeconomic environment in 2026.

Inflation dynamics improved during the period, with headline inflation moderating to 15.15% in December 2025 from 17.33% in November, according to the National Bureau of Statistics. This decline was largely
driven by the adoption of a revised Consumer Price Index methodology, which rebased the index to 2024 and transitioned to a 12-month average reference period. Under the previous 2009 methodology, inflation would have remained significantly higher, underscoring the technical component of the observed disinflation.

Nonetheless, underlying price pressures also eased, with food inflations lowing for the fifth consecutive month to 10.84%, supported by seasonal harvest effects and a firmer naira, while core inflation declined to 18.63% from 20.59%, reflecting reduced pass-through from exchange rate pressures.

Inflation Trajectory

In the foreign exchange market, stability at the Nigerian Foreign Exchange Market (NFEM) window improved noticeably in January. The naira strengthened toward the end of the month, closing within
the ₦1,386/$ to ₦1,401/$ range, as foreign portfolio inflows increased and liquidity conditions improved. Attractive domestic yields, coupled with enhanced confidence in policy direction, encouraged offshore participation in the fixed income market, easing demand pressures on the currency. This was further supported by improved supply from exporters and market participants, reinforcing near-term exchange rate resilience

Economic activity indicators also pointed to strengthening momentum. The Central Bank of Nigeria’s composite Purchasing Managers’ Index rose to 57.6 points in December 2025, marking the fastest pace of expansion in nearly five years and extending the expansionary trend to thirteen consecutive months.

 

 

Gross FX Reserves ($’ billions)

 

Growth was broad-based across sectors, with agriculture leading, followed by strong recoveries in industrial output and services activity. The PMI data suggest improving business confidence and strengthening domestic demand entering 2026.Nigeria’s international financial standing improved further during the month, following its formal removal from the European Union’s list of high-risk third countries for money laundering and terrorism financing, effective January 29, 2026. This development followed Nigeria’s earlier exit from the Financial Action Task Force grey list in October 2025 and represents a significant milestone in restoring global credibility. The delisting is expected to reduce transaction friction for cross-border flows, improve correspondent banking relationships, and broaden the base of international investors engaging with Nigerian assets.

The improving macro narrative was reinforced by the International Monetary Fund’s upward revision of Nigeria’s 2026 growth forecast to 4.4% in its January World Economic Outlook update. The revision reflects confidence in ongoing structural reforms, improved macroeconomic coordination, and stronger productivity across agriculture, manufacturing, and services. Nigeria is now positioned as a notable contributor to global growth in 2026, with an outlook that compares favorably to several peer economies.  

External buffers continued to strengthen, providing additional support to macro stability. Gross external reserves rose to approximately $46.1 billion by the end of January, up from $45.0 billion at the close of 2025. The improvement was driven by higher oil receipts, steady diaspora remittances, and sustained portfolio inflows. Forward projections suggest reserves could exceed $51billion by year-end, reinforcing the Central Bank’s capacity to manage currency volatility and absorb external shocks.

 

MACROS

Looking ahead to February 2026, inflation is expected to continue its gradual moderation, supported by base effects from the revised CPI methodology, stable exchange rate conditions, and easing food supply pressures. Headline inflation is likely to trend marginally lower or remain broadly stable in the near term. However, risks to this outlook include potential energy price shocks, changes to administered prices, or renewed exchange rate volatility, particularly if global commodity prices spike or domestic supply disruptions emerge.

The exchange rate is expected to remain relatively stable in February, with the naira likely to trade around the ₦1,400/$ level, supported by sustained portfolio inflows, improved reserve buffers, and ongoing price discovery at the NFEM window. Nonetheless, downside risks persist, including the possibility of capital flow reversals if global financial conditions tighten, heightened geopolitical tensions affecting oil markets, or delays in oil production recovery. Maintaining confidence in policy consistency and reform implementation will remain critical to preserving near-term currency stability.

The macroeconomic environment entering February 2026 reflects an improving balance, with stabilization increasingly anchored by structural reforms rather than temporary market interventions. While vulnerabilities remain, the convergence of moderating inflation, strengthening external buffers, and rising international confidence provides a more resilient foundation for economic and financial market performance in the months ahead.

The Nigerian equities market began 2026 on a relatively positive footing, extending the bullish momentum seen in late 2025. This performance was underpinned by improving macroeconomic signals that suggested early signs of economic stabilization, alongside renewed investor confidence. As a result, total market capitalization on the Nigerian Exchange (NGX) increased by ₦6.8 trillion during January, closing at ₦106.15 trillion compared to ₦99.38 trillion at the end of December 2025 

This 6.8% month-on-month expansion was largely driven by price appreciation in major blue-chip stocks, complemented by fresh capital inflows through primary market activities. Reflecting these gains, the NGX All-Share Index (ASI) delivered a strong start to the year, recording both month-to-date and year-to-date returns of 6.27% to close January at 165,370.40 points.

This performance was not an isolated development but broadly aligned with trends across global and Pan-African equity markets. Notably, the NGX outperformed several African peers, including the BRVM and the Moroccan exchange, which recorded more muted starts to the year.

 

Sectoral performance on the NGX in January 2026 largely reflected the broader market’s bullish tone, with most indices closing the month in positive territory as investors selectively rotated into high-conviction sectors. The Oil and Gas index emerged as the top performer, advancing by 13.80%, driven by price gains in key integrated energy stocks such as SEPLAT (+15.34%) and ARADEL (+16.45%). Institutional confidence was further reinforced by improved governance sentiment following strategic board appointments, including the induction of Mr. Tony Elumelu to Seplat Energy’s board.

The Insurance index followed closely, rising by 11.76% on the back of ongoing recapitalization efforts and broad-based price appreciation across the sector. Notable gainers included NEM Insurance (+19.40%), AIICO (+10.82%), Veritas Kapital (+43.27%), and Mutual Benefits Assurance (+34.84%), reflecting improving sentiment toward balance sheet strengthening and earnings recovery prospects.

The Banking index posted a solid 6.99% gain, supported by renewed interest in fundamentally strong lenders such as GTCO (+9.15%), Zenith Bank (+15.61%), Wema Bank (+14.71%), and Access Holdings (+7.62%), as investors positioned for resilient earnings and attractive dividend yields. Similarly, the Industrial Goods index advanced by 5.45%, driven largely by gains in Dangote Cement (+4.27%) and Lafarge Africa (+16.73%), amid sustained demand expectations within the construction value chain.

Meanwhile, the Consumer Goods index added 3.21%, extending its steady appreciation after emerging as the bestperforming sector in 2025. Gains in Nestlé Nigeria (+10.00%), Cadbury Nigeria (+11.85%), Unilever Nigeria (+8.33%), and Dangote Sugar (+8.33%) underscored continued investor preference for companies with relatively strong pricing power and improving margin outlooks.

Despite the NGX All-Share Index delivering a 6.27% return in January, stock-level performance was highly dispersed, creating meaningful alpha opportunities for active managers. Several mid- and small-cap stocks recorded outsized gains, driven by sector repositioning, low-float dynamics, and renewed speculative interest. Deap Capital Management & Trust Plc (+394.21%) and SCOA Nigeria Plc (+345.07%) led the advancers, while strong performances were also recorded in NCR Nigeria Plc (+173.73%), Zichis Agro Allied Industries Plc (+131%), particularly notable as a recent IPO, and Multiverse Mining, supported by improving sentiment in the mining and basic materials sector.

On the downside, a small number of stocks underperformed, largely due to profit-taking following extended rallies rather than fundamental weakness. Ikeja Hotel Plc (-23.03%) declined as investors locked in gains in the hospitality sector, while Juli Plc (- 9.93%) and Austin Laz (-8.24%) faced selling pressure amid rotation within the retail and services space. Conoil Plc (-9.72%) also recorded a modest pullback, standing out as a rare decliner within the Oil and Gas sector, with price weakness largely reflecting technical corrections.

Market direction in February is expected to be driven largely by the release of audited 2025 financial results and dividend announcements. Nigeria’s dividend season typically supports equity prices, as investors rotate toward fundamentally strong, high-yield stocks. The banking sector should remain the center of activity amid ongoing recapitalization, while potential large-scale listings, such as the anticipated Dangote Refinery IPO, present upside catalysts for market liquidity and capitalization. Continued traction on the Growth Board also points to a growing pipeline of SME listings, particularly in agriculture and technology. Macroeconomic risks remain centered on inflation trends and monetary policy. However, strong market capitalization and resilient earnings among large-cap stocks suggest the NGX is well positioned to sustain positive momentum into February 2026.

FIXED INCOME

Domestic Money Market and System Liquidity

The Nigerian fixed income market in January 2026 was characterized by ample system liquidity, shifting yield dynamics, and improved investor confidence following favorable macroeconomic developments.

Market sentiment was largely shaped by the moderation in headline inflation and the Central Bank of Nigeria’s decision to maintain a tight but stable monetary policy stance. These factors drove strong participation at primary market auctions and contributed to yield compression toward the latter part of the month.

A key catalyst was the National Bureau of Statistics’ release of December 2025 inflation data, which showed headline inflation easing to 15.15% from 17.33% in November. The decline was primarily attributed to revisions in the Consumer Price Index methodology, including rebasing to 2024 and the adoption of a 12- month average reference period. This perceived disinflationary trend supported fixed income demand and reinforced expectations of yield stabilization.

Against this backdrop, the CBN retained the Monetary Policy Rate at 27.0% at its January meeting, signaling policy continuity. The moderation in inflation expectations provided a tailwind for fixed income instruments, particularly at the long end of the Treasury curve, as investors increasingly priced in lower real yield pressures.

In the Treasury bills primary market, investor demand remained robust throughout the month. At the January 7 auction, the CBN offered ₦1.15 trillion across the 91-day, 182-day, and 364-day tenors, attracting total subscriptions of ₦1.54 trillion and a bid-cover ratio of 1.35x. Although stop rates increased across all tenors, clearing at 15.80%, 16.50%, and 18.47%, respectively, strong participation
underscored sustained appetite for short-dated government securities.

 

Demand intensified at the January 21 auction, where ₦1.15 trillion was again offered. Total subscriptions surged to ₦3.44 trillion, translating to a bid-cover ratio of 3.24x, with particularly strong interest in longer-dated bills. While stop rates for the 91-day and 182-day instruments edged higher to 15.84% and 16.65%, the 364-day bill cleared lower at 18.36%, reflecting growing investor preference for duration. The
relatively low allotment rate suggests that unmet bids are likely to flow into the secondary market.

Eurobonds and Global Confidence

Nigerian Eurobonds traded with mixed-to-moderately positive sentiment in January 2026, shaped by a combination of global macroeconomic developments, geopolitical risks, and improving domestic fundamentals. Early in the month, investor sentiment was cautious amid heightened global risk aversion, driven by volatility in energy markets, geopolitical tensions in the Middle East, and supply disruptions caused by severe winter storms in the United States. These factors contributed to short-term oil price volatility, with Brent crude briefly trading above USD70/bbl as markets repriced supply risks.

Additional uncertainty stemmed from concerns around U.S. foreign policy actions, including interventions in Venezuela, which raised the prospect of disruptions to global oil supply. Given Nigeria’s continued reliance on oil revenues, sustained volatility in crude prices remained a key macro risk, influencing foreign investor positioning in Nigerian sovereign debt during the early part of the month.

Mid-month sentiment improved as U.S. Treasury yields eased and oil prices stabilized following their initial spike. Softer U.S. jobless claims and the U.S. Federal Reserve’s decision to hold policy rates reinforced expectations of a prolonged pause through most of H1 2026, following cumulative rate cuts in late 2025. This shift supported renewed demand for emerging market debt, leading to modest yield compression across Nigerian Eurobonds.

By the latter half of January, buying interest strengthened, driving the average benchmark Nigerian Eurobond yield down to approximately 7.12%. However, profit-taking ahead of key global macro events and renewed upward pressure on U.S. Treasury yields toward month-end resulted in mild volatility, with the benchmark yield ticking higher to around 7.23% in the final trading sessions. Nigerian Eurobonds closed the month slightly weaker on a month-on-month basis, reflecting cautious investor positioning amid persistent global uncertainty.

FIXED INCOME

A major positive development during the month was Nigeria’s formal removal from the European Union’s list of high-risk third countries for money laundering and terrorism financing, which took effect on January 29, 2026. This followed Nigeria’s earlier exit from the Financial Action Task Force (FATF) grey list in October 2025, representing a significant improvement in the country’s international financial standing. The delisting is expected to reduce compliance costs for cross-border transactions, enhance correspondent banking relationships, and foster broader participation by foreign portfolio investors in Nigeria’s fixed income and Eurobond markets in the medium term.

OUTLOOK

The Nigerian fixed-income market is set for a gradual recalibration. With the CBN maintaining tight monetary conditions and ample liquidity, short-term NTB yields are expected to ease, providing investors with opportunities to secure attractive returns ahead of potential rate adjustments. Demand for longer-dated government bonds remains robust, supported by stable coupon payments and potential capital appreciation in a moderating yield environment.

Fiscal discipline and strategic debt management will be key. A shift toward lower-cost, long-dated instruments, including diaspora bonds, Sukuk, or green bonds, combined with efforts to diversify non-oil revenues, could enhance debt sustainability and bolster investor confidence. This outlook depends on continued macro stability, easing inflationary pressures, and contained external debt risks.

On the external front, while Eurobond issuances have drawn strong demand, global rate dynamics and geopolitical risks could pressure yields, underscoring the need for vigilance. Overall, highyield, long-term government debt and Tbills is likely to remain a preferred allocation in the near to medium term, contingent on stable macro fundamentals and consistent policy execution.

Download report
  • Report

December 2025 Inflation Report

Inflation eased to 15.15% in December 2025 following an adjustment by the NBS.

Nigeria’s headline inflation moderated to 15.15% year-on year in December 2025, down from 17.33% in November, reflecting a methodological adjustment by the National Bureau of Statistics (NBS). 

The decline follows the NBS’s adoption of a 12-month average CPI for 2024 as the reference period, replacing the previous single-month (December 2024) base. This change was implemented to eliminate an artificial inflation spike caused by base effects. Under the former methodology, headline inflation for December 2025 was projected to surge to about 31.2%, a distortion driven by the comparison base rather than a sharp acceleration in underlying price pressures. The revised approach, therefore, provides a more accurate representation of inflation dynamics, even as price levels remain elevated. 

On a disaggregated basis, food inflation eased to 10.84% in December from 14.21% in November, while core inflation moderated to 18.63% from 20.59%, reflecting a broad based slowdown in price momentum following the methodological adjustment. On a month-on-month basis, headline inflation decelerated to 0.54%, down from 1.22% in the prior month. Food inflation turned negative at 0.36%, compared with 1.13% in November, suggesting easing short-term price pressures, while core inflation slowed to 0.58% from 1.28% previously.

OUTLOOK

We expect headline inflation to maintain a downward trajectory in 2026, supported by a relatively stable exchange rate, which should help moderate imported inflation pressures. Additionally, a weaker global oil market, driven by a projected supply surplus, could further ease global energy prices. However, this presents a double-edged risk: while lower energy prices may reduce domestic fuel costs and ease transportation and logistics expenses, weaker oil prices could also dampen export earnings and exert pressure on the naira, potentially offsetting gains through higher import costs.

On balance, the anticipated disinflation trend may create room for the Monetary Policy Committee to begin a gradual pivot away from its current hawkish stance, should macroeconomic conditions remain supportive.

Y-o-Y Inflation Trend New CPI Series
Y-o-Y Inflation Trend Old CPI Series
M-O-M Inflation Trend New CPI Series
Download report
  • Report

Nigeria Economic Review

2025 Economic Review

Economic Growth Performance

  • Nigeria’s economy expanded by 3.98% y/y in Q3 2025, easing from 4.23% in Q2, its strongest growth since Q2 2021, but outperforming the 3.86% growth recorded in Q3 2024.
  • The non-oil sector, which accounted for 96.6% of total output, grew by 3.91% vs Q2: 3.64%, supported by stronger activity in agriculture (3.79%), financial and insurance services (19.63%), trade (1.98%), construction (5.57%), and modest gains across ICT, real estate, and manufacturing.
  • In contrast, the oil sector grew by 5.84% y/y, a sharp slowdown from 20.46% in the previous quarter, reflecting weaker crude output. Oil production averaged 1.64 mbpd in Q3, slightly below Q2’s 1.68 mbpd but above the 1.47 mbpd recorded in Q3 2024.

Source: NBS, BRB Research

Inflation and Monetary Policy
  • Nigeria’s inflation environment has continued to improve, with headline inflation easing for the eighth consecutive month and settling at 14.45% from 16.05% year-on-year in November 2025. The deceleration has been driven largely by the rebasing effect, softer food price pressures, improved supply conditions, and a more stable foreign-exchange market. Core inflation remains elevated at 18.04% while Food inflation moderated to 11.08%, reflecting a gradual easing in underlying price pressures.
  • Against this backdrop, the Central Bank of Nigeria maintained the MPR at 27% in November 2025, following a 50-bps reduction in September, as it sought to consolidate recent progress on disinflation. Although headline inflation continued to moderate, the MPC noted that underlying price pressures remain elevated, warranting a cautious pause. The adjustment of the policy corridor to +50/-450 bps from +250/-250 bps signals a subtly more accommodative liquidity framework. The stance shows a gradual shift from aggressive tightening toward a more balanced macro-stabilization

Source: NBS, BRB Research                                                Source: Investing.com, BRB Research

Exchange Rate and Foreign Reserves
  • Nigeria’s foreign exchange market stabilized in 2025 following previous periods of sharp depreciation, supported by CBN initiatives including the Electronic FX Matching System (EFEMS), transparent auction processes, and partial market liberalization. These measures enhanced liquidity and narrowed the gap between official and parallel market rates, with the naira strengthening to ₦1,446 per US dollar by November 2025 from ₦1,535 per US dollar at the end of 2024. 
  • Foreign reserves rose from USD 40.2 billion at the end of 2024 to USD 44.67 billion by November 2025, reflecting strengthened external sector conditions. The recent Eurobond issuance of $2.35 billion provided a significant boost to reserve buffers, complementing gains from improved oil production, firmer export receipts, steady remittance inflows, and renewed foreign portfolio investment.
Oil Market
  • The 2025 oil market began the year in relative balance, with temporary supply disruptions from seasonal factors and unplanned non-OPEC+ outages offset by robust structural supply. Demand growth remained moderate amid macroeconomic uncertainty, resulting in stable prices with limited volatility. 
  • In Q2, OPEC+ began rolling back voluntary production cuts while output from the U.S. and Brazil remained strong, leading to rising supply that outpaced demand and triggered bearish sentiment. By Q3, oversupply became the defining feature, as global production exceeded demand, inventories accumulated, and analysts revised downward full-year price expectations.
  • The year closed with the supply glut persisting into Q4; inventories remained elevated, and prices stabilized below mid-year peaks following OPEC+ guidance on potential early-2026 output pauses.
Oil Production
  • In Q3 2025, Nigeria’s average daily oil production stood at 1.64 million barrels, up 0.17 mbpd from Q3 2024 but slightly below Q2 2025’s 1.68 mbpd. The sector’s gradual recovery in 2025 was supported by improved security, enhanced pipeline integrity, and more coordinated upstream operations. Production averaged 1.66 mbpd in H1, peaked at 1.68 mbpd in Q2, the highest since 2020, and moderated slightly in Q3, reflecting ongoing operational adjustments and maintenance activities. 
  • The rebound helped reinforce external balances and foreign-exchange supply, but output volatility remained a feature of the sector’s performance. Despite the improvement, production levels fell short of the government’s 2025 target of 2.06 million barrels per day, reflecting ongoing structural challenges. Crude theft, infrastructure constraints, and intermittent operational disruptions continued to weigh on capacity utilization, limiting the pace of recovery.

Source: NBS, BRB Research 

Economic Outlook for year 2026

2026 Outlook
  • Nigeria’s economy is expected to expand over the near term, with the IMF projecting GDP growth of 3.9% in 2025 and 4.2% in 2026, supported by stable oil inflows, improving oil production levels, and greater policy consistency. 
  • Headline inflation is expected to continue its moderating trend in 2026, easing toward 11.56% by year-end, supported by a stable exchange rate, cautious monetary policy, and weaker energy prices. This disinflationary environment is likely to provide the Central Bank of Nigeria with scope to maintain a neutral to mildly accommodative monetary policy stance. We anticipate a potential recalibration of the MPR, with a projected easing of around 200 basis points by mid-2026, contingent on inflation remaining firmly anchored and underlying price pressures remaining subdued.
  • Several risks could reverse the projected downward trend in inflation in 2026. Pressure on the exchange rate may increase the cost of imported goods, while elevated government spending ahead of elections could inject additional liquidity, boosting prices. Structural challenges, including insecurity in key food-producing regions, may constrain supply and exert upward pressure on food prices. External shocks, such as volatility in global oil markets, also represent a potential upside risk to inflation during the year. 
  • Despite these challenges, higher foreign reserve buffers and reforms in the foreign-exchange market, including enhanced transparency and more efficient EFEMS operations,  should help limit exchange-rate volatility and strengthen overall broader macroeconomic stability. These developments, alongside easing inflation and relatively stable macro fundamentals, are likely to support investor sentiment and attract modest portfolio inflows over the course of the year.
  • The macroeconomic environment nonetheless remains sensitive to external and domestic shocks. Oil-price volatility continues to pose the most significant risk to fiscal stability and FX supply, while uncertainty around the revised Capital Gains Tax framework and lingering security concerns may temper investor appetite in the near term. Even so, the broader environment suggests cautiously improving conditions for Nigeria’s asset management and investment industry in 2026.
  • Global oil market dynamics will be pivotal for Nigeria in 2026, with a structural supply surplus expected to persist due to strong non-OPEC+ production from the U.S. and Brazil and a measured supply approach from OPEC+. Demand growth will remain concentrated in non-OECD Asia, while elevated inventories are likely to keep Brent crude in the mid-to-low $50s per barrel. A potential peace deal between Russia and Ukraine could further soften prices if sanctions on Russian oil are eased, adding additional barrels to the market. Although geopolitical disruptions could still trigger short-term volatility, sustained low prices may eventually dampen non-OPEC+ investment. 

Equities Market Review

Nigeria Equities Market Performance 2025

The Nigerian equity market delivered a powerful yet volatile performance in 2025, emerging as one of the strongest markets globally. For most of the year, sentiment was supported by market-friendly reforms, resilient corporate earnings, improved foreign-exchange conditions and strong domestic liquidity.

Market capitalization rose from ₦62.76 trillion at end-2024 to ₦91.29 trillion by late November, reflecting a 45.45% increase in investor wealth. Gains strengthened through the third quarter, with the ASI up 16.57% by mid-year and nearly 50% by October. The NGX All-Share Index (ASI) also advanced significantly, climbing from 102,926.40 points to over 150,000 points in October before moderating to 143,520.52 in November.

Investor participation was robust, driven by both domestic and foreign flows. Total transactions for the first eight months of the year rose by 99% to ₦6.92 trillion. Foreign portfolio inflows increased by 122% to ₦1.45 trillion, aided by improved FX liquidity and clearer exit conditions, whereas domestic investors contributed over ₦5.46 trillion, reinforcing their leadership in market activity. These flows were complemented by the performance of several high-growth stocks, with tickers like BetaGlass, MTN, Ellah Lakes, WEMA Bank, NCR, MBENEFIT, UACN, and ASO Savings delivering returns ranging between 100% and more than 500%, reflecting strong liquidity and high conviction in select counters.

NGX ASI Monthly Returns

Sector performance highlighted the breadth of the rally. Consumer goods companies led with over 100% year-to-date gains by October, supported by strong local production and pricing resilience amid FX constraints. The Insurance Index rose sharply on recapitalization expectations, while the Banking Index, though third in returns, remained the most actively traded, reflecting strong institutional interest. Industrial goods stocks also saw significant demand, whereas the Oil & Gas Index lagged for most of the year due to sector-specific challenges.

NGX Sectoral Performance (2023-2025)

However, the positive momentum was interrupted in November by the sharpest correction of the year. Market capitalization fell by about ₦6.54 trillion following uncertainty over the proposed changes to the Capital Gains Tax framework. The shift from a flat 10% rate to a progressive structure of up to 30% triggered aggressive profit-taking and capital repatriation by foreign investors. Combined with geopolitical concerns, the policy announcement dampened sentiment and illustrated how quickly fiscal decisions can offset months of progress driven by monetary reforms and FX stability.

2026 Outlook

Outlook

Building on a robust 2025, Nigeria’s equities market is poised for a strong 2026 performance, with potential total returns exceeding 30%, supported by ongoing reforms, macroeconomic stability, and stronger corporate earnings. Key growth drivers include continued sectoral diversification, with consumer goods, industrials, and financials expected to anchor performance, alongside rising dividends that enhance total shareholder returns.

Market sentiment will be increasingly shaped by company-specific fundamentals, with investors focusing on earnings quality, balance sheet strength, and cash-flow resilience. The anticipated listing of NNPC Limited and Dangote Refinery next year could serve as a major liquidity and valuation catalyst, attracting both domestic and foreign capital.

Further support is expected from positive macroeconomic factors, including easing inflation, stable interest rates, and an improved foreign-exchange environment, as well as regulatory clarity that strengthens investor confidence. Active portfolio management, diversification across high-quality sectors, and close monitoring of earnings, FX developments, and policy changes will remain essential to navigate potential volatility and capture upside opportunities.

Download report