Weekly Economic Update (April 22nd – 26th)

Key Economic Events

  • US GDP Growth slowed to 1.6% as inflation spirals

In the first quarter of 2024, the US economy expanded at an annualized rate of 1.6%, significantly below market forecasts of 2.5% and 1.8% lower than the 3.4% growth recorded in the fourth quarter of 2023. This marks the slowest pace of growth since the second quarter of 2022. The slowdown was partly attributed to a deceleration in consumer spending, which dropped to 2.5% in Q1 2024 from 3.3% in Q4 2023. Concurrently, the personal consumption expenditures price index rose to 3.4% in Q1 2024 from 1.8% in Q4 2023, exceeding the Federal Reserve's long-term target of 2% by 1.4%.


Despite the slowdown in GDP growth, the uptick in the PCE price index suggests that the Federal Reserve will probably delay any rate cuts until later in the year. Elevated interest rates in the US increase the chances of capital flight from emerging markets like Nigeria.

  • FG Launches Consumer Credit Scheme

The FGN has approved the launch of the first phase of the Consumer Credit Scheme, targeting working citizens in the country. The scheme aims to provide credit facilities, starting with civil service members before extending to the general public. Consumer credit is highlighted as vital for modern economies, enabling citizens to access goods and services upfront and pay responsibly over time, thereby enhancing their quality of life. The Nigerian Consumer Credit Corporation (CREDICORP) is tasked with strengthening credit reporting systems, offering credit guarantees, and promoting responsible consumer credit. The credit market in Nigeria is substantial, with approximately 39 million adults, representing 32% of the population, relying on informal sources for financial assistance. Estimates from a 2023 survey by Enhancing Financial Inclusion and Access (EFInA) indicate a market size of $2.1 billion for consumer credit, with an additional $621 million in untapped potential within the informal borrowing segment.


Nigeria's new consumer credit scheme represents a transformative initiative that holds the promise of expanding access to finance, improving living standards, and driving inclusive economic growth.

Market Update

  • Oil market – Weak demand fears overshadow concerns of escalating Middle East crisis

Brent crude prices fell below the $90 per barrel mark during the review period as concerns over weak oil demand especially in the United States overshadow the fears of an escalation in the Middle East tensions. On average, oil prices fell by 0.57% to $88.51 per barrel from $89.02 per barrel last week.Brent crude price


Oil prices are expected to remain at current levels as markets continue to evaluate the effects of the ongoing crisis in the Middle East alongside worries about demand in the US, the largest consumer of oil.

  • Forex market – Naira depreciates despite the CBN’s forex sales to BDCs

During the past week, the Naira experienced significant depreciation in both official and parallel markets. In the parallel market, the Naira reached a four-week low of N1,450/$ on April 25 before rebounding to close the week at N1,400/$. Meanwhile, at the NAFEM window, the currency continued its steady decline, losing 12.64% to close the week at N1,339.23/$ compared to N1,169.99/$ at the previous week's end. This renewed pressure on the currency was attributed to heightened demand for foreign exchange amidst reduced dollar availability, as some foreign portfolio investors withdrew from the Nigerian market. However, the Central Bank of Nigeria's (CBN) sales of additional dollars to eligible Bureau de Change operators (BDCs) began to alleviate the situation towards the end of the week, particularly in the parallel market. At the start of the week, the CBN announced the approval of the fourth tranche of FX sales ($10,000) to 1,583 BDCs at N1,021/$. Additionally, the EFCC froze 300 accounts associated with illicit forex trading to defend the Naira.Exchange Rate The gross external reserves reversed its downward trend on April 22, gaining 0.06% (24.92 million) to close at $32.13bn on April 25 from $32.11 billion at the end of last week.


We expect the Naira to appreciate further this week, supported by the CBN’s sale of forex to BDCs. Nevertheless, as traders and manufacturers rebuild their inventory levels, there may be a surge in demand for the dollar. Without sufficient dollar supply to match this demand, the currency is expected to face depreciation in the near term.

Money Market

During the week, the opening position of banks remained in the negative territory although there was an improvement compared to the previous week. On average, banks’ opening position was N759.26 billion short, an improvement from N814.53 billion short last week. This was partly due to a reduction in the net primary market outflows to N6.09 billion from N452.3 billion last week coupled with the April FAAC disbursement (N1.123 trillion). The tight liquidity conditions kept short-term interest rates elevated.  Specifically, OPR and ON rates averaged 29.31% and 30.53% respectively compared to 30.32% and 31.33% the preceding week.Short term interest rate


Interest rates are expected to stay high as liquidity conditions remain tight.

  • Fixed Income Market

The average yield across the Federal Government of Nigeria (FGN) bond curve decreased by 0.12%, ending the review period at 18.84% from 18.96% the previous week. Positive sentiment was notably present in the short-term and mid-maturity segments of the curve due to the demand for short-dated and mid-maturity bonds. The FGN-2026 bond declined by 0.66% to 18.04%, the FGN-2031 bond reduced by 0.1% to 19.1%, while the 30-year bond remained unchanged at 18.45%.

During the review period, there was a primary market treasury bill auction which was oversubscribed by 254.23% as investors sought opportunities in the fixed-income market with high yields. Particularly, strong demand persisted for the 364-day treasury bill, oversubscribed by 595.94%. The 182-day and 91-day treasury bills were also oversubscribed by 104.09% and 238.36% respectively. The stop rates remained unchanged at 16.24%, 17%, and 20.7% for the 91-day, 182-day, and 364-day tenors respectively.

In the secondary treasury bill market, there were selloffs across mid to long maturities ahead of the primary market auction. However, after the auction, sentiment turned bullish as the average yield dropped by 2.72% across the benchmark curve, closing the week at 22.24% compared to 25.14% the previous week, with unsettled bid demand entering the secondary market. The average benchmark yield decreased by 0.07% across all tenors, closing at 18.53%.tenor market


We expect the high yield in the fixed-income market to persist as the CBN intensifies efforts to mop up excess liquidity and taper inflationary pressures.

  • Stock market – Bearish sentiment as selloffs overtake buying activities

The Nigerian equities market maintained its bearish run during the review period. The NGX ASI fell by 1.39% to close the week at 98,152.91 points from 99,539.75 points at the end of last week. Similarly, market capitalization decreased by 1.40% to N55.51 trillion on April 26 from N56.3trillion on April 19. This decline was primarily driven by sell-offs as investors moved towards less risky investments offering higher yields. Share loss

On a sectoral basis, performance was largely negative as three of the five indices declined. The Banking index lost -3.10%, followed by oil & gas (-1.41%) and Consumer goods (-1.15%). Meanwhile, the insurance and industrial goods gained 0.02% and 0.38% respectively.Sectorial Basis

Market activity showed a positive trend during the week. The average trading volume rose by 15.16% to 367.81 million units compared to 319.39 million units in the preceding week. Similarly, the average trade value increased by 6.04% to N6.85 billion from N6.46 billion in the preceding week.

Market breadth for the week was negative as 27 shares gained, 43 lost and 84 remained unchanged. SUNUASSUR topped the gainers’ list with a 25% increase in its share price, followed by CAP (20.21%), LIVESTOCK (14.48%), JAPAULGOLD (14.37%), and UNILEVER (11.03%).Top 5 Gainers The laggards were led by OANDO (-19.57%), SOVRENINS (-18.18%), THOMASWY (-16.82%), FBNH (-16.26%) and WEMABANK (-12.59%).Top 5 losses


There is a possibility of a slight improvement in market performance this week as investors capitalize on price corrections and strategically invest to qualify for dividends.



Consumer credit scheme

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