Macro Update
FG’s 2025 Budget Revised Upwards to ₦54.2 Trillion on Potential Revenue Gains
President Bola Tinubu has revised Nigeria’s 2025 budget upward to ₦54.2 trillion, an 8.9% increase from the initial ₦49.7 trillion proposal. This adjustment is based on optimism about stronger non-oil revenue collection in 2025.
The expected revenue gains only provide a spending boost as the deficit is barely changed at ₦13.0 trillion from ₦13.39 trillion.
Key Takeaway:
The FG’s aggressive spending further worsens Nigeria’s cropping debt burden and mounting interest payments.
This is unsupportive of a stable macro environment that enables growth, low inflation and currency stability. Investors should continue to be careful about their allocation to naira based assets.
FX Update
Naira Strengthens in the Parallel Market
The naira closed at ₦1,500.41 per dollar in the official market, showing a 0.14% appreciation from ₦1,502.44 the previous week, indicating relative stability. In the parallel market, it strengthened to ₦1,555 per dollar, reflecting a 2.4% appreciation from ₦1,593 per dollar in the previous week. The gap between the official and parallel rates remains as the official market remains inaccessible for participants in the FX market.
Meanwhile, Nigeria’s external reserves currently stand at $39.497 billion, from $39.72 billion in the previous week. This decline is primarily attributed to increased foreign debt servicing obligations and the Central Bank of Nigeria’s interventions in the foreign exchange market to stabilise the naira.
Key Takeaways:
- Stronger naira in the parallel market indicates a temporary improvement in liquidity likely driven by CBN Intervention. This is unlikely to be sustained unless there is a strong boost to exports and foreign investments.
- Long-term investors are encouraged to invest in dollar-denominated assets.
Remember to save dollar-based goals in dollars, which can be done with apps like Ladda.
Equities Update
Equities Market Performance
The Nigerian Exchange (NGX) All-Share Index(ASI) ended the week with a 0.51% gain, and a year-to-date return of approximately 2.08%.
Sector Highlights (Week-on-Week):
There was a mixed performance across the sectors.
The Banking Index led the gains with a significant 3.17% increase, followed by the Oil and Gas Index, which rose by 0.31%, and the Industrial Goods Index with a marginal uptick of 0.09%. In contrast, the Consumer Goods Index recorded a decline of 0.44%.
Key Takeaways:
- Long-term investors may benefit from US exposure, particularly the S&P 500, which has delivered about 3.4% year-to-date dollar return.
- Until Nigeria’s macroeconomic conditions stabilise, diversifying into US markets may be advantageous.
Fixed Income Update
Mixed Yield Movement in the Fixed Income Market
This week, the treasury bills market showed a mixed performance. The 91-day and 182-day bills maintained stable yields at 18.00% and 18.50%, respectively. However, the 364-day bill settled at 22.6%, marking a decline from the previous week’s 25.6%.
Bond Market:
In the bond market, yields rose slightly to an average of 21.608% from 20.5% in the prior week.
Key Takeaways:
- While there is a mixed trend in treasury bill yields, it is still a good option for short-term savings goals.
- You can invest in treasury bills to save for your short-term goal on rent, schools, fees, etc. through Ladda, a fintech app that helps you save at high returns.
For your long-term goals, we do not recommend naira treasury bills and bonds.
Star-Spangled Banner Recap
The US Economy Remains Resilient Amid Strong Job growth
The US job market has shown resilience over the past two months, as the unemployment rate fell from 4.1% in December 2024 to 4% in January 2025, according to the US Bureau of Labor Statistics. However, job creation was 143,000, falling short of the forecasted 240,000.
In the equity markets, the S&P 500 gained 0.3% following the job report, reflecting investor optimism. The FTSE 100 in the UK was stable at +0.1%, while the MSCI World Index rose by 0.4%.
Key Takeaway:
Despite the chance of stronger inflationary pressures, we prefer an exposure to US stocks due to the resilience of the economy among peers.
Remember to always save for your dollar goals in dollars. You can do this with us on Ladda—a fintech app that helps you save at high returns.
Stay disciplined, and as always, stay focused on your financial goals.
We hope you find this edition insightful, and as always, stay focused on your financial goals!
***
Do you know that we have our own podcast? It’s MONEYTALKS!💚
Here’s a link to listen to all the amazing episodes we have!
***
Thank you for reading Money Africa’s Blog.
Please feel free to share it.
Do you have any questions? You can send an e-mail to info@themoneyafrica.com or send a DM to any of our social media channels.
***
MoneyAfrica premium plan
Are you a mid to high-income earner? Do you find communities a bit too busy? You should sign up for our premium plan.
You can learn more about that here.
***
We often get questions regarding how to plan your finances to align with your relocation plans, especially for students seeking to further their studies. As always, we have heard you, and we have put together an e-book to help you navigate this. Follow this link, to get your FREE copy of the e-book: The Japa Encyclopedia.
***
Get our annual subscription and learn more about investing safely and building a solid portfolio in 2025.
Don’t forget to:
- Join our community, if you want to smash your 2025 financial goals. It takes at least 30 days to build great habits that will last you a lifetime. So why not start now? There is a lot you can achieve.
- If you would like to document your financial journey in 2025, then our journal would be an excellent fit for you. It costs ₦7,500 (excluding delivery).
- Get a budget sheet to track your monthly expenses. Click here
- Get an investment tracker to be on top of all your investments. Click here
MoneyAfrica is a financial literacy platform. Our goal is to make everyone better with their finances.
We do this by engagements via our:
– social media handles
– platforms for paid community members (for adults and students)
– webinar sessions with corporate clients
Would you like to join any of the communities? Please click here
Would you like us to hold a webinar for your company’s staff? Please send an email to info@themoneyafrica.com
