Economy News

Nigeria’s latest $2.3 billion Eurobond issuance has reignited debate over the country’s rising debt costs, as Ugodre Obi-Chukwu, Founder and Chief Executive Officer of Nairametrics, described the deal as “expensive” and reflective of persistent investor caution toward Nigeria’s macroeconomic stability.

Speaking on Moneyline with Nancy, Obi-Chukwu noted that the yields — 8% for the 10-year tranche and 9% for the 20-year tranche — are unusually high for sovereign debt, particularly for a country seeking to rebuild investor confidence after years of fiscal strain and currency instability.

“Nine percent over twenty years is high. Unless Nigeria can refinance when rates fall, this could become a burden. The pricing reflects investor caution around Nigeria’s risk profile,” Obi-Chukwu explained.

High Demand, But At a High Price

The Federal Government announced the Eurobond sale earlier in the week, revealing that the issuance was oversubscribed by more than 400%. While this indicates strong investor appetite for Nigerian debt, Obi-Chukwu warned that the enthusiasm came at a steep cost.

“The oversubscription shows that foreign investors still see value in Nigeria,” he said. “But the yields also tell a different story — they show that investors are pricing in significant risk. Borrowing at this rate may help short-term funding needs, but it raises long-term sustainability questions.”

According to analysts, the high yields stem from global inflationary trends, elevated interest rates, and Nigeria’s own fiscal and exchange rate vulnerabilities. With debt servicing already consuming a large share of government revenue, further borrowing at such levels could intensify fiscal pressures.

Investor Sentiment and Debt Sustainability

Obi-Chukwu’s comments come amid growing scrutiny of Nigeria’s debt management strategy. Despite recent reforms by the Ministry of Finance and the Debt Management Office (DMO), Nigeria’s debt-to-GDP ratio and interest payment obligations remain concerning.

He emphasized that investor confidence, while improving, remains conditional — foreign investors are engaging with Nigerian assets, but demanding higher compensation for perceived risks such as exchange rate volatility, inflation, and policy inconsistency.

“The cost of borrowing cannot be ignored,” Obi-Chukwu cautioned. “It’s encouraging to see investor demand, but if the government continues to issue debt at these rates, it will weigh on our fiscal balance in the long run.”

He added that Nigeria must focus on enhancing revenue generation, curbing inflation, and building policy credibility to gradually lower borrowing costs in future debt issuances.

Zenith Bank’s Performance Reflects Sector Resilience

Turning to the domestic financial sector, Obi-Chukwu praised Zenith Bank Plc for delivering an exceptional third-quarter (Q3 2025) performance despite the tough macroeconomic backdrop.

The bank’s gross earnings rose 16% year-on-year to ₦3.4 trillion, driven largely by a 41% surge in interest income to ₦2.7 trillion. Pre-tax profit reached ₦917 billion, which he described as “mouth-watering for shareholders.”

Even after adjusting for foreign exchange revaluation gains that inflated 2024 results, Obi-Chukwu said Zenith’s core earnings performance remains “remarkably strong.”

“Stripping out FX gains, this is a lot more impressive than expected,” he noted. “Zenith continues to show that disciplined cost management and balance sheet strength are key to surviving in a high-rate environment.”

He further commended the bank for maintaining a net interest margin of around 12%, despite high funding costs, and keeping its cost-to-income ratio below 50%.

“That’s commendable,” he said. “With total assets at about ₦31 trillion, Zenith remains one of the most operationally efficient banks in the country.”

However, he advised Nigerian banks to diversify income streams and develop hedging strategies as foreign exchange gains normalize. “With the naira strengthening, banks must prepare for margin compression. Hedging will be critical,” he emphasized.

Outlook: Cautious Optimism for 2026

Looking ahead, Obi-Chukwu expressed cautious optimism for the Nigerian banking industry going into 2026. He noted that while some lenders are grappling with inflation and rising operating costs, others — especially the FUGAZ banks (First Bank, UBA, GTCO, Access, and Zenith) — continue to post solid growth.

“We’ve seen a mixed bag — some banks are thriving, others are adjusting. But overall, the sector is profitable, deposits are rising, and total assets are expanding. The FUGAZ banks alone now control over ₦150 trillion in assets,” he said.

He suggested that the next phase of growth for Nigerian banks should focus on efficient capital deployment, technological innovation, and risk diversification in anticipation of more volatile macroeconomic conditions.

In conclusion, while Obi-Chukwu welcomed Nigeria’s renewed access to international capital markets, he underscored the importance of managing the cost of debt carefully. “Borrowing is not inherently bad,” he said, “but when you’re paying 9% over 20 years, it must come with a clear plan for growth, stability, and fiscal responsibility.”

The Nigerian Naira ended the week on a slightly weaker note against the U.S. dollar, closing at ₦1,438.5/$1 at the official foreign exchange market on Friday, November 7, 2025. This marginal depreciation came despite a continued increase in the country’s foreign reserves, which analysts say reflects stronger foreign exchange inflows and improved macroeconomic management by the Central Bank of Nigeria (CBN).

According to figures published on the CBN’s official website, the Naira experienced minor fluctuations throughout the week — trading at ₦1,438/$1 on Monday, ₦1,441.75/$1 on Tuesday, ₦1,440/$1 on Wednesday, and ₦1,437.5/$1 on Thursday, before settling at ₦1,438.5/$1 on Friday. Although these movements appear relatively stable, the overall trend still indicates a modest depreciation from the previous week’s close of ₦1,427.5/$1.

Parallel Market Records Slight Appreciation

In contrast to the official window, the Naira showed modest strength in the parallel (black) market, appreciating to ₦1,445/$1 from ₦1,455/$1 recorded midweek. Traders in Lagos and Abuja reported that the currency traded between ₦1,445 and ₦1,460 per dollar during the week, suggesting mild volatility but a generally firmer outlook compared to late October.

Market participants attributed the parallel market’s relative stability to a surge in dollar inflows from diaspora remittances, coupled with end-of-month conversions by corporate entities. These inflows temporarily boosted liquidity and helped narrow the gap between the official and parallel market rates. However, currency traders warned that the trend may be short-lived as festive season demand and election-related spending are expected to heighten dollar demand in the coming weeks.

Week-on-Week Performance and Context

On a week-on-week basis, the Naira weakened by ₦11, closing at ₦1,438.5/$1 compared to ₦1,427.5/$1 the previous Friday, October 31, 2025. The slight depreciation interrupted a two-week streak of gains recorded in late October, when the local currency appreciated due to increased confidence in CBN reforms and improved FX liquidity conditions.

The current pullback signals renewed pressure on the Naira as importers ramp up dollar purchases ahead of the Christmas and New Year shopping season. Analysts also point to speculative trading activity and short-term market corrections as contributing factors to the week’s weaker close.

Foreign Reserves Climb to $43.32 Billion

Despite the mild depreciation, Nigeria’s foreign reserves continued their upward trajectory, rising to $43.32 billion from $43.17 billion the previous week. This marks one of the country’s strongest reserve levels in months and reflects increased oil receipts, steady portfolio inflows, and growing investor confidence in the Nigerian economy.

The CBN attributed the rise in reserves to a combination of factors, including autonomous FX inflows from non-oil exports, higher crude oil production, and renewed foreign investor participation following the implementation of market-friendly policies under Governor Olayemi Cardoso’s leadership.

“The steady accumulation of reserves indicates that Nigeria’s external sector is gaining resilience,” a CBN official noted. “This provides a stronger buffer to manage short-term volatility and supports confidence in the Naira.”

Analysts Warn of Near-Term Volatility

While the recent reserve build-up offers a positive signal, financial analysts caution that seasonal pressures could reintroduce volatility in the short term. As the country approaches the festive season and the start of political campaign spending for the 2027 general elections, dollar demand is expected to rise significantly.

Economist Abas Adelakun told reporters that although the fundamentals are improving, the next few months will test the durability of the CBN’s reforms.

“What we’re seeing now is cautious optimism,” he said. “Foreign reserves are climbing, but structural challenges remain. Sustaining the Naira’s stability will require deepening export diversification and curbing speculative activity.”

Analysts from Standard Bank echoed similar concerns, warning that fiscal spending linked to electioneering could weaken the Naira in 2026 and 2027.

“Election-related expenditures and primary campaigns scheduled to begin in early 2026 will likely boost liquidity and increase foreign exchange demand,” the bank’s report stated. “However, a robust reserve position should allow the CBN to manage short-term pressures effectively.”

Policy Outlook and Budget Context

President Bola Ahmed Tinubu, in his December 2024 budget presentation, projected a stronger and more stable currency for 2025. The administration based its budget assumptions on an exchange rate target of ₦1,500/$1 and a reduction in inflation from 34.6% to 15% by year-end.

While the current exchange rate remains above the government’s target, analysts argue that the recent improvement in reserves, coupled with ongoing monetary tightening, could help the Naira regain ground over the medium term.

However, the sustainability of these gains depends on Nigeria’s ability to expand non-oil exports, boost fiscal revenues, and control inflation. Without addressing these structural constraints, experts warn that short-term improvements may not translate into lasting currency stability.

Ghana’s inflation rate continued its remarkable decline, falling for the tenth consecutive month to 8.0% year-on-year in October 2025, from 9.4% in September. This marks the lowest inflation rate since June 2021 and underscores the country’s ongoing success in stabilizing prices after years of high inflation driven by global commodity shocks and domestic supply disruptions.

The report, released by the Ghana Statistical Service (GSS) on Wednesday, highlighted a 140 basis-point decline in headline inflation, exceeding market forecasts and further consolidating Ghana’s macroeconomic recovery efforts. The data also revealed a 0.4% month-on-month deflation, a stark contrast to the 0.9% increase recorded in September, suggesting that consumer prices are beginning to stabilize more broadly across major spending categories.

Food Prices Drive Overall Disinflation

A major driver of the decline was the continued moderation in food prices, which make up a significant portion of Ghana’s inflation basket. According to the GSS, food inflation fell sharply to 9.5% in October from 11.8% in September, helped by favorable base effects, an improved harvest season, and better supply chain stability.

Month-on-month, food prices declined by 1.0%, reversing the 0.6% increase seen the previous month. The steepest declines were seen in high-weight categories such as fish and seafood, which dropped from 16.7% to 12.4%, and ready-made meals, which fell from 14.1% to 12.4%.

Market analysts at Apakan Securities Limited, a Ghana-based research and investment firm, attributed this slowdown to “improved agricultural yields, stable transport networks, and effective policy interventions aimed at ensuring food security.” They also noted that government measures—such as subsidized fertilizer distribution and investment in local storage facilities—have started to yield tangible results, easing supply pressures in both rural and urban markets.

Broad-Based Decline Across Non-Food Categories

The non-food inflation index also showed a broad-based decline, reflecting price stability in key expenditure areas. Non-food inflation fell by 130 basis points, from 8.2% to 6.9% year-on-year, as nearly all major subcategories recorded slower price growth or outright declines.

Specifically, housing and utilities inflation eased from 15.8% to 13.9%, while alcoholic beverages, tobacco, and narcotics dropped dramatically from 15.4% to 10.4%. Clothing and footwear prices also moderated, easing from 11.0% to 9.5%. On a month-to-month basis, non-food inflation rose marginally by just 0.04%, compared to the 1.1% increase observed in September.

This trend suggests that inflationary pressures are no longer being driven by energy or transport costs, as had been the case during the height of the global supply chain disruptions between 2022 and 2023.

Monetary Policy Outlook and IMF Engagement

The latest inflation data will play a crucial role in shaping the Bank of Ghana’s Monetary Policy Committee (MPC) decision when it meets for its final session of 2025 on November 26. Analysts widely expect the central bank to cut interest rates in response to the sustained disinflation and easing price pressures.

The Bank of Ghana’s current inflation target band is 8% ±2 percentage points, and the latest figures place headline inflation squarely within that range for the first time in over four years. This provides policymakers with the flexibility to adopt a more accommodative monetary stance to support growth and private-sector lending.

The International Monetary Fund (IMF), which has been working closely with Ghana under its ongoing Extended Credit Facility, recently announced that it had reached a staff-level agreement with Ghanaian authorities on the fifth review of the country’s economic reform program. The IMF commended Ghana for its progress in restoring macroeconomic stability, reducing fiscal deficits, and improving monetary policy credibility.

In a statement, the IMF said, “Ghana’s success in reducing inflation to single digits reflects the effectiveness of coordinated fiscal and monetary policy, improved foreign exchange stability, and enhanced food supply dynamics.”

Economic Implications and Outlook

Economists say the return to single-digit inflation marks a turning point for Ghana’s economy, which has battled high inflation since 2022, when global commodity prices and domestic currency depreciation pushed inflation above 50%.

Lower inflation is expected to boost consumer purchasing power, enhance business confidence, and support economic recovery across key sectors such as manufacturing, retail, and services. Additionally, the decline in food inflation will provide significant relief to low-income households, who are most vulnerable to food price volatility.

Looking ahead, analysts project that if current trends continue, Ghana could maintain inflation within the central bank’s target range through early 2026. However, they caution that potential risks remain, including external shocks from oil price volatility and domestic fiscal pressures ahead of the 2026 budget cycle.

Nevertheless, October’s data represents a strong endorsement of Ghana’s macroeconomic stabilization strategy, affirming that sustained reforms, prudent fiscal management, and a favorable agricultural season are finally restoring price stability and investor confidence in the West African economy.

In a bold step toward transforming its economic landscape, the Ondo State Government has signed a $50 billion investment agreement with international partners under the Sunshine Infrastructure Joint Venture (JV) to develop a world-class refinery and free trade zone in the state.

The partnership, described as one of the largest subnational investment commitments in Nigeria’s history, is expected to catalyze Ondo’s emergence as a major industrial and energy hub in West Africa.

According to a statement released by Ebenezer Adeniyan, Chief Press Secretary to Governor Lucky Aiyedatiwa, the landmark project will fast-track the establishment of a 500,000-barrels-per-day refinery alongside a 1,471-hectare Sunshine Free Trade Zone in Ilaje Local Government Area.

Governor Aiyedatiwa hailed the development as a “defining moment” in the state’s economic evolution, emphasizing that the venture will stimulate job creation, attract global investors, and enhance revenue generation through downstream and export-oriented activities.

“This investment marks a new dawn for Ondo State. It will accelerate industrial growth, expand our energy infrastructure, and position Ondo as one of Nigeria’s leading destinations for large-scale investment,” the statement read.

A New Era for Ondo’s Industrial Economy

The Sunshine Infrastructure Joint Venture — a consortium of leading global investors and development partners — secured over $50 billion in funding following the successful signing of a Memorandum of Understanding (MoU) with the Ondo State Investment Promotion Agency (ONDIPA).

The project’s original value of $30 billion was later revised upward to $50 billion to accommodate an expanded scope that includes integrated infrastructure, energy supply, and community development programs.

According to Henry Owonka, Managing Director of Sunshine Infrastructure JV, the project has progressed from conceptualization to execution through sustained collaboration with ONDIPA and other regulatory agencies.

“The Sunshine JV is not just an investment; it’s a development framework designed to transform industries, strengthen communities, and improve livelihoods,” Owonka said.

“Our refinery component will meet both domestic and international demand for refined petroleum products, while our free trade zone will serve as a gateway for export-driven industrialization.”

Owonka also disclosed that the company’s Corporate Social Responsibility (CSR) agenda will prioritize education, local employment, and infrastructural development across host communities in the Ilaje coastal belt.

Strategic Impact: Energy, Jobs, and Infrastructure

The twin projects — the refinery and the free trade zone — are projected to reshape Ondo’s economic geography. The 500,000-barrel-per-day refinery is expected to significantly reduce Nigeria’s dependence on imported petroleum products, complementing existing capacity from the Dangote Refinery and other modular facilities under development nationwide.

Analysts say the refinery will not only boost local refining capacity but also create thousands of direct and indirect jobs, enhance local content participation, and generate new revenue streams for both state and federal governments.

Meanwhile, the Sunshine Free Trade Zone, spanning nearly 1,500 hectares, will offer world-class facilities and investment incentives to attract manufacturers, logistics providers, and export-oriented firms. The zone is expected to draw both domestic and international investors, positioning Ondo as a critical node in Nigeria’s industrial corridor.

By leveraging its coastal location, the zone will also support the development of maritime infrastructure, including ports, roads, and energy facilities, thus integrating Ondo into the broader value chain of regional and global trade.

Economic and Policy Significance

Experts have hailed the Sunshine Infrastructure JV as a model for public-private partnerships (PPPs) capable of unlocking Nigeria’s subnational potential. With Ondo’s rich reserves of natural resources — including bitumen, natural gas, and limestone — the state is strategically positioned to attract large-scale investment across the energy, petrochemical, and manufacturing sectors.

Governor Aiyedatiwa’s administration has consistently prioritized investment promotion through ONDIPA, streamlining processes for investors and offering land, policy, and infrastructural support.

“This project reaffirms our belief that with the right vision, partnerships, and governance, subnational economies can drive Nigeria’s next phase of industrial and energy growth,” a senior ONDIPA official said.

The refinery and free trade zone deal is also expected to strengthen Nigeria’s broader national energy security agenda and diversify its foreign exchange earnings by increasing export volumes of refined petroleum products and industrial goods.

Community and Social Impact

Beyond macroeconomic gains, the Sunshine JV includes a robust community integration plan focused on sustainable development in host communities. Educational scholarships, skill development centres, and local employment quotas are being embedded into the project’s implementation framework to ensure inclusive growth.

Owonka emphasized that the JV’s approach would “leave a legacy of empowerment,” ensuring that the people of Ilaje and surrounding regions benefit directly from the project’s long-term economic impact.

Conclusion

The $50 billion Sunshine Infrastructure Joint Venture marks a transformative step for Ondo State — a move that could redefine its industrial identity, strengthen Nigeria’s refining capacity, and establish a sustainable model for subnational investment-driven development.

Once completed, the projects are expected to make Ondo a key industrial powerhouse, bridging local potential with global capital — and signaling that the future of Nigeria’s economic diversification may well begin at the state level.

The Nigerian National Petroleum Company Limited (NNPC Ltd) has unveiled an ambitious plan to attract $60 billion in investments by 2030 as part of its strategy to drive Africa’s energy transformation and position Nigeria as the continent’s premier energy hub.

The announcement was made by the Group Chief Executive Officer (GCEO) of NNPC Ltd, Engr. Bashir Bayo Ojulari, during the “Energy Talk” session at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2025), held in Abu Dhabi, United Arab Emirates (UAE), on Tuesday. The session, moderated by Daniel Yergin, Pulitzer Prize-winning energy author and vice chairman of S&P Global, centered on Africa’s evolving energy landscape and the role of national oil companies in the global transition to cleaner energy sources.

Nigeria at the Heart of Africa’s Energy Future

Engr. Ojulari emphasized that Nigeria holds a central position in Africa’s energy equation, possessing some of the continent’s largest oil and gas reserves, alongside a growing renewable energy portfolio. He noted that under President Bola Tinubu’s Renewed Hope Agenda, the federal government has set out to transform Nigeria from an extraction-based economy to a diversified, investment-led energy powerhouse.

“Africa’s energy future must be built on pragmatism, partnerships, and purpose,” Ojulari stated. “At NNPC Limited, we are not merely participants in the global energy transition—we are shaping it from an African perspective. Our focus is to grow production, monetize gas, deepen partnerships, and deliver value to Nigerians and our global partners alike.”

He explained that NNPC Ltd has already raised Nigeria’s crude oil production to 1.7 million barrels per day (bpd), with a short-term goal of 2 million bpd by 2027, and a longer-term target of 3 million bpd. This progress, he said, is being achieved through redefined relationships with International Oil Companies (IOCs) and local independents, removing bureaucratic barriers, and aligning with partners on mutual growth and value creation.

Attracting $60 Billion to Power Growth

According to Ojulari, the company is actively pursuing between $30 billion and $60 billion in new capital investments through partnerships with OPEC member states, African National Oil Companies (NOCs), and global financial institutions. The funds will be deployed to expand oil and gas production, invest in new infrastructure, and accelerate Nigeria’s transition toward cleaner energy.

He highlighted that recent government policies—including new incentives introduced to complement the Petroleum Industry Act (PIA)—have started attracting foreign interest in deep-water exploration, gas monetization projects, and energy cost optimization.

Ojulari also revealed that NNPC’s current investment pipeline includes several high-impact projects designed to secure Nigeria’s long-term energy stability. Among these are the Ajaokuta-Kaduna-Kano (AKK) gas pipeline, the Obiafu-Obrikom-Oben (OB3) gas project, and the revitalization of upstream operations to increase efficiency and output.

In a statement by Andy Odeh, NNPC’s Chief Corporate Communications Officer, Ojulari underscored that these initiatives are essential to achieving Nigeria’s ambition of becoming a regional energy hub capable of supplying both African and global markets.

Call for Global Collaboration

During the discussion, Ojulari aligned his message with the keynote remarks by Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and CEO of the Abu Dhabi National Oil Company (ADNOC), who called for “pragmatic, not performative” energy policies and emphasized the need for $4 trillion in annual global investment to achieve sustainable energy security.

Echoing this sentiment, Ojulari stressed that the global energy transition must consider Africa’s realities and opportunities, not just its challenges. “Our message to the world is clear: Nigeria is open for business, NNPC Limited is fit for the future, and we invite partners across the globe to co-invest in Africa’s energy transformation,” he declared.

He further noted that Africa’s vast untapped gas reserves present a unique opportunity to bridge the global energy gap, ensuring affordable, cleaner, and more reliable energy for millions while supporting the global decarbonization agenda.

About ADIPEC 2025

The Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), hosted annually by ADNOC, is one of the world’s largest gatherings of energy industry stakeholders. The 2025 edition, themed “Energy. Intelligence. Impact.”, marks the 41st in its series, bringing together policymakers, CEOs, investors, and experts to discuss innovations and strategies shaping the future of global energy.

This year’s conference has seen strong participation from African countries seeking new collaborations to unlock the continent’s energy potential. For NNPC Ltd, the event represents a major platform to showcase Nigeria’s reform-driven energy sector and attract international capital inflows that will power its growth trajectory toward 2030 and beyond.

Conclusion

As NNPC Ltd continues its transformation into a fully commercial and globally competitive energy company, its focus on building strategic partnerships and mobilizing large-scale investments stands as a crucial pillar in achieving Africa’s broader energy independence. By aligning national priorities with global sustainability goals, the company is positioning Nigeria not just as an oil producer but as a driving force in shaping the continent’s energy future.