MoneyAfrica| Investment Research
Weekly Market Commentary
December 29, 2025.
Good morning, readers, and welcome to this week’s edition of our stock market newsletter!
As always, our newsletter is divided into two sections: Green White Green, covering the Nigerian stock market, and the Star-Spangled Banner, focusing on the US market.
Green White Green Recap
Macro Update
Nigeria’s Fiscal Deficit Hits ₦5.7 Trillion in H1 2025
Nigeria spent more money than it earned in the first half of 2025. The gap between what the government earned and what it spent was ₦5.7 trillion. This came from ₦3.04 trillion in the first three months and ₦2.66 trillion in the next three months. This gap was smaller than the ₦6.7 trillion the government expected, but much higher than the ₦3.2 trillion recorded in the same period last year.
Revenue did not meet expectations. The government earned about ₦8.6 trillion in total. Oil brought in roughly ₦4.1 trillion, far below the ₦5.8 trillion target, mainly because Nigeria produced less oil and global oil prices were unstable. Income from non-oil sources such as company taxes, customs duties, and VAT came to about ₦4.5 trillion. This was better than last year but still not enough to make up for weak oil earnings. This shows that tax collection is still not strong enough to support government spending.
Spending remained high. The government spent about ₦12.3 trillion during the period. About ₦7.5 trillion went to regular expenses like salaries, pensions, and running government offices. Debt repayment alone took about ₦4.4 trillion, meaning a large share of revenue was used to pay old loans. Only about ₦1.2 trillion was spent on roads, power, and other development projects, showing that investment in growth remains low.
To cover the ₦5.7 trillion gap, the government borrowed mainly from within Nigeria, raising about ₦4.8 trillionthrough treasury bills and bonds. It also borrowed about ₦1.2 trillion from foreign lenders, mostly long-term loans with lower interest rates and flexible repayment terms, usually tied to specific projects. These are called concessional loans, which simply means cheaper and easier-to-repay loans.
When this spending gap is compared with the size of Nigeria’s economy, it comes to about 3–3.5% of GDP. Nigeria’s law recommends keeping this figure below 3%, so government finances are now under pressure, even though the deficit is still close to the legal limit.
For investors, this can be good for treasury bills and bonds, as returns may remain attractive. For businesses, however, high interest rates can make loans more expensive, slowing investment and job creation. With so much money going into debt repayment and so little into development projects, economic growth may remain weak unless revenue improves.
Key Takeaway:
Nigeria’s ₦5.7 trillion spending gap in the first half of 2025 was smaller than expected but driven by weak oil income, slow tax growth, and high debt repayments of ₦4.4 trillion. Borrowing remains heavy, which supports bond returns for investors but limits funds available for roads, power, and other growth-boosting projects.
FX Update
Naira Shows Stability as FX Reserves Remain Strong
Nigeria’s foreign exchange (FX) reserves fell by $263.15 million to $45.21 billion as of December 17, 2025, ending a 25-week streak of growth. Before the drop, reserves had reached a peak of $45.47 billion, the highest in about six years.
The decline was due to three days of dollar outflows, as the CBN paid off some obligations and businesses demanded more dollars for imports. Even with this drop, the reserves are still strong, giving investors confidence that Nigeria can meet its external obligations. The high reserves also provide over 10 months of import cover, showing the country has enough dollars to pay for goods and services from abroad.
In the official FX market, the naira closed last week at ₦1,475.54 per US dollar. This week, it closed at ₦1,460.11 per US dollar, showing that the naira has strengthened..
In the parallel market, the dollar sold at ₦1,475 per US dollar, unchanged from last week. This shows that the naira remained stable, even with continued demand for dollars.
Key Takeaway:
- The naira’s performance in both official and parallel markets demonstrates stability and resilience, helping support trade and overall economic confidence.
Remember to save dollar-based goals in dollars, which can be done with apps like Ladda. Just visit www.getladda.com to download. You can also earn up to 20% by investing in naira savings.
Equities Update
Banking and Consumer Stocks Push the Market Higher
The Nigerian stock market closed the week on a positive note. The NGX All-Share Index (ASI) rose by 0.97%, gaining 1,482 points to close at 153,539.83, up from 152,057.38 the previous week. Market capitalisation increased to ₦97.89 trillion. Trading was lower because the market opened for only three days, with investors exchanging 2.88 billion shares worth ₦63.83 billion. The gain was driven mainly by strong buying in banking and consumer goods stocks.
The banking sector led the market higher as the NGX Banking Index rose by 2.93% to 1,506.45. Zenith Bank, GTCO, Stanbic IBTC, Access Holdings, and Wema Bank recorded solid gains, making banking stocks the biggest contributors to the week’s performance. Consumer goods stocks also performed strongly, with the NGX Consumer Goods Index up 3.34% to 3,851.41, supported by Nestlé Nigeria, BUA Foods, Guinness Nigeria, and Champion Breweries.
The industrial goods sector saw moderate gains, with the NGX Industrial Goods Index rising 1.17% to 5,630.30, led by Dangote Cement, BUA Cement, and Lafarge Africa. In contrast, the insurance sector fell, with the NGX Insurance Index down 2.13% to 1,146.01 as AIICO Insurance, Custodian Investment, and NEM Insurance declined. The oil and gas sector remained flat, with the NGX Oil and Gas Index at 2,675.99, as Seplat Energy, TotalEnergies Nigeria, and Oando showed little movement.
Key Takeaway:
- The market ended the week higher mainly because of strong gains in banking and consumer goods stocks. Weak performance in insurance stocks and a flat oil and gas sector did not stop the overall market from closing in positive territory, showing that investors are currently favouring banks and consumer-focused companies.
Fixed Income Update
Treasury Bill Yields Slightly Higher
This week, Nigeria’s Treasury bill rates changed a little compared with last week. The 91‑day bill went up from 16.10% to 16.19%, the 182‑day bill rose slightly from 17.25% to 17.26%, and the 364‑day bill stayed the same at 20.09%.
For investors, this means that short‑term bills are giving a slightly better return than last week, but the long‑term bill is still steady. Investors who put money in T‑bills can expect similar earnings as before, while those looking at short-term bills might earn a tiny bit more. The small changes show the market is calm, with no big shift in demand or risk.
Key takeaway:
- Short-term T-bill rates rose a little, long-term rates stayed the same, so investors can earn slightly higher returns on short-term bills without much change in risk.
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 long-term goals, naira-denominated fixed income instruments are not suitable due to inflation and currency risks
Star-Spangled Banner Recap
Global Markets Rise Amid Strong US Economic Growth
Global stock markets rose this week after news that the US economy grew faster than expected in the third quarter, expanding at 4.3% annualised. Growth was driven by higher consumer spending, increased exports, and government spending, giving investors confidence that companies could earn more profits.
In the markets, trading was lighter than usual due to the holiday season, but markets still ended the week higher.
The S&P 500 rose +1.4%, led by technology and communication services. The Dow Jones gained +1.3%, with strong performance from industrials and health care. The Nasdaq climbed +1.6%, driven by tech stocks, while the Russell 2000 rose +0.5% as small-cap stocks also saw modest gains.
Globally, the FTSE 100 in the UK fell slightly by 0.2%. The MSCI World Index rose by 0.4%, showing improved global sentiment. In Asia, Hong Kong’s Hang Seng Index gained 0.5% on the back of strong US economic data
Sector performance in the US showed technology leading, followed by communication services and consumer discretionary. Industrials and health care had moderate gains, while consumer staples, utilities, and financials were more stable.
Key Takeaway:
- Markets rose this week because the US economy grew faster than expected. Technology and growth stocks led, while other sectors and global markets had smaller gains.
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!