Green White Green Recap
Macro Update
Nigeria’s Non-oil Exports Increased by 20.79% to $5.46 Billion in 2024
Nigeria’s non-oil exports grew by 20.79% in 2024, reaching $5.46 billion, compared to $4.52 billion in the previous year, according to the Nigerian Export Promotion Council (NEPC).
This growth was driven by increased export activity in agriculture, manufacturing, and solid minerals, with notable contributions from products such as cocoa, sesame seeds, cashew nuts, and urea.
Key takeaway:
The increase in non-oil exports marks a significant step toward economic diversification. However, its overall impact on Nigeria’s macroeconomy remains moderate, considering the persistent structural challenges in Nigeria’s trade dynamics with oil exports still contributing 65.44% of total export earnings as of Q3 2024 according to the Nigerian Bureau of Statistics (NBS).
Without a stronger focus on industrialisation and improved infrastructure, the ability of the non-oil sector to significantly offset oil revenue fluctuations and drive long-term macroeconomic stability will remain constrained. Investors are advised to keep their long-term portfolio outside Nigeria and hedge income against naira depreciation.
FX Update
Naira/USD Closed the Week at N1,500/$1
The exchange rate appreciated by 2.12% from N1,533.26 on January 24, 2025, to N1,500.77 on January 31, 2025, on the official market. It traded at N1,630/$1 on the parallel market, reflecting an appreciation of 1.81% from N1,660 in the previous week.
Meanwhile, external reserves declined by 0.45% from $39.95 billion recorded in the previous week to $39.77 billion.
Key takeaway:
- Long-term investors should look past the volatility in the currency and focus on consistently investing regardless of the exchange rate level.
Remember to save dollar-based goals in dollars, which can be done with apps like Ladda.
Equities Update
The Nigerian Exchange (NGX) All-Share Index(ASI) ended the week with a gain of 0.87%, pushing its year-to-date returns to 1.53% in naira terms.
Sector Highlights (Week-on-Week):
Sectoral performance was mixed this week.
The Industrial Goods Sector dipped by 0.52%.
The Consumer Goods Sector and Banking Sector recorded gains of 4.01% and 2.54% respectively while the Oil & Gas Sector recorded a gain of 0.97%.
Key takeaways:
- Long-term investors may benefit from US exposure, particularly the S&P 500, which has delivered a 2.26% 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
Short-Term Treasury Bills:
- The yield on the 91-day treasury bill rose to 22.46% from 22.11% in the previous week.
- The 182-day treasury bill yield declined to 21.32% from 24.82%.
Long-Term Treasury Bill:
- The 365-day treasury bill yield also declined to 25.91% from 26.91%.
In the bond market, yields rose slightly to an average of 20.10% from 20.09% 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
DeepSeek Threat, Big Tech Earnings, and Trade Tariffs Drive Volatility
The S&P 500 lost 1.32% bringing its year-to-date returns to approximately 2.26% in the previous week. This was driven by a mix of major developments during the week, including the DeepSeek threat, the release of big tech earning reports, and the Federal Reserve’s decision to hold interest rates steady. The stock market’s volatility was also influenced by President Donald Trump’s announcement of a 25% tariff on Mexico and Canada, alongside a 10% tariff on China. Investors reacted with concerns over potential trade conflicts and their uncertain implications for global markets.
The FTSE 100 increased by 2.02% while the MCSI World Index, which tracks global equities, lost 0.52%.
Key takeaway:
- As we await policy developments, we recommend maintaining exposure to the resilient US economy.
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.
We hope you find this edition insightful, and as always, stay focused on your financial goals!
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