Macroeconomic Recap (Past Month)

Inflation moderated to 23.71% in April 2025 (down from 24.23% in March), while food inflation eased to 21.26%.

The trade surplus surged 51.07% YoY to ₦5.17tn in Q1 2025, driven by export growth of 7.42%. The naira appreciated marginally by 1.16% in January 2025 to ₦1,535.94/US$, though FX reserves dipped to $38.88bn (covering 8.82 months of imports) . PMI data from the central bank shows recovery across industries, but rising poverty remains a concern amid persistent inflation

Policy & Regulatory Developments

Monetary Policy:

The Central Bank of Nigeria (CBN) held its Monetary Policy Rate (MPR) steady at 27.5% in May 2025, maintaining asymmetric corridors (+500/-100 bps) and liquidity ratios. This reflects cautious optimism amid moderating inflation and FX stability.

Fiscal Policy:

The 2025 budget (₦54.99tn), nearly double 2024’s allocation, prioritizes security and economic stabilization. Key predictions and assumptions include:

• Exchange rate appreciation to ₦1,400/US$

• Oil production target of 2.06 million bpd

• Inflation reduction to 15% (from 34.6%)

Regulatory Shifts:

The Nigeria Visa Policy 2025 (NVP 2025) introduced streamlined e-visas for short-term visits, effective May 2025, to boost business/tourism inflows.

Trade, Currency & Sectoral Flows

Exports hit ₦20.6tn in Q1 2025 (+7.42% YoY), led by crude oil (₦12.96tn, 62.89% of total) and natural gas (₦1.93tn). Non-oil exports surged, particularly to India (₦2.84tn, +76.35% YoY), where non-crude exports (₦1.43tn) surpassed crude. Imports rose moderately, but the trade surplus expansion signals robust external sector health. FX Markets May 2025 saw $5.96bn inflows into the NFEM (+62% MoM), driven by domestic sources and narrowing parallel market gaps

Industrial Insight

ICT growth is projected at 13.18% in 2025, fueled by digital expansion and mobile adoption. Agriculture (22–25% of GDP) and transportation (6.77% growth) are gaining momentum through agro-processing and logistics investments. Satellite and mobile data indicate rising informal trade diversification, particularly in cashew nuts and urea exports to India. However, climate risks and rural insecurity threaten agricultural output, potentially exacerbating food inflation.

Outlook

Nigeria’s GDP is projected to reach 3.6% in Q1 2025 and 4.3% by 2026, driven by non-oil sectors (ICT, agriculture, and manufacturing). Comparatively, this lags behind Kenya’s 5.5% and Egypt’s 4.8% 2025 growth forecasts (IMF), but exceeds South Africa’s 1.8%.

Investment Outlook:

• Equities: Overweight ICT and agro-processing sectors, leveraging digitalization tailwinds.

• Fixed Income: Expect yield compression if inflation moderates to 15% as budgeted.

• FX Strategy: Hedging advised amid projected naira volatility; CBN policies may stabilize rates by Q4 2025.

• Risks:

  • Downside: Oil production shortfalls, security crises, or FX depreciation could stifle growth.

  • Upside: ICT/export diversification may accelerate if structural reforms deepen.

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