Economy
Consider These Critical Risks Before Investing in Stocks This Year
By Dipo Olowookere
Investing in stocks is a profitable business if you understand the market very well, but when you fail to know trends, you might bite your fingers very hard like some did in 2008 during the market crash.
Next year, Nigerians head to the polls to elect new leaders and representatives and the polity is already building up.
Already, happenings in the political scene have been hitting the stock market and as the year runs out, more effect would be felt by the market.
However, analysts at Zedcrest Research have highlighted some political risks that may have huge negative effect on the Nigerian stock market and they are presented below.
The Fixed Income market has been on a rally of late, hinged on renewed interests from both local and offshore clients, due to investors’ expectation of further moderation in inflation rates and a tilt to a more accommodative monetary stance by the CBN, with the recent reduction in its spate of OMO issuances.
Foreign investors have also been attracted by the broader stability in the country’s macro-economic environment, largely hinged on positive developments in oil prices and relative stability in its FX Market.
We however note that there exists some downside risk factors in the broader political and economic space which could spook the wheels of the recent momentum in the markets. The key risk being a possibility of capital reversals by FPI’s in reaction to political risk factors ahead of the 2019 General elections.
Major Risk Factors
1.) Delay in Budget Passage
The delay in the passage of the 2018 budget is being felt negatively as the budget is required by public and private sector stakeholders to plan and manage their economic activities. The 2018 budget which was put at N8.612 trillion and presented to the National Assembly by President Muhammadu Buhari on Nov. 7, 2017, was tagged “Budget of Consolidation’’, but the absence of a budget calendar and lack of coordination amongst the executive and legislature have been the major causes of the delay. While we expect the issues around the budget delay to be resolved soon, a continued delay would however send signals of instability and uncertainty to prospective local and offshore investors.
2.) Regional Conflicts
The Nigerian socio-political climate has been beset by several conflicts in recent times. Notable amongst these include the recent Shiite protests in which large number of supporters of the Shite Leader El-Zakzaky stormed the state capital to protest the continued detention of their Leader. We have also witnessed recent attacks by the Boko-haram sect in the north eastern region which has caused some angst amongst members of the International community.
Most Notable amongst these conflicts however remains the continued killings by rampaging herdsmen across most of the North central and some southern states of the country. We fear that if these conflicts are not properly handled by the Government, they may result in heightened levels of insecurity and an escalation of tensions ahead of the upcoming General elections.
a.) Shiite Protests
There has been escalating tensions in recent times from Members of the Islamic Movement of Nigeria (IMN) in protest of the continued detention of their leader, Ibrahim El-Zakzaky, whom the Nigerian government has kept in custody for over two years, without trial and despite court orders for his release. The protests, which started peacefully on Monday and Tuesday last week turned violent after police forcefully dispersed the protesters. We fear that if this situation is not carefully handled, it might degenerate into a more serious security concern.
b.) Boko-haram Insurgency
Despite claims by the Federal Government of a complete subjugation of the Boko-haram Militant Sect, we have witnessed recent spate of attacks from the terrorist group, which has once again renewed fears of a debilitating security situation in the North-eastern part of the country.
c.) Herdsmen Killings
The Seemingly intractable killings by Fulani herdsmen across most of the Middle belt and southern states, has been one of the most controversial issues facing the current administration, which has drawn a lot of criticisms from both local and foreign governments, politicians and human rights activists. Of utmost concern however is the Federal Government’s seeming inability to find a lasting solution to the menace. We fear that a lack of decisive action by the FGN may result in increased tensions as members of the affected communities may be forced to defend themselves from any future attacks.
3.) Inflationary Threats
Most experts have said that the inflation target of the Central Bank of Nigeria (CBN) would not be feasible, due to the downside risks occasioned by electioneering spending and implementation of minimum wage. Inflationary pressures are likely to resume in the third quarter of the year on the back of waning base effect, increased electioneering spending and the implementation of minimum wage by government.
RECOMMENDATION:
We believe the aforementioned risk factors should be critically monitored by investors, as they may portend for significant reversals in offshore capital flows and an uptrend in fixed income yields if they worsen or do crystallize. We consequently advise investors to exercise caution in their investments ahead of the 2019 General elections, whilst advising a tilt to the shorter end of the Naira yield curve for risk averse investors.
By Adedapo Adesanya
The National Insurance Commission has issued new guidelines for the collection, management, and administration of the Insurance Policyholders’ Protection Fund.
In a circular issued to all insurance institutions on Tuesday, the regulator also set May 31, 2026, as the deadline for insurers to submit their assessment returns for the 2025 financial year.
Recall that on August 5, 2025, President Bola Tinubu signed into law the Nigerian Insurance Industry Reform Act ( NIIRA 2025).
This landmark legislation repeals the Insurance Act 2003, and consolidates related provisions, ushering in a modern regulatory framework. It lays a strong foundation for sustainable growth and increased investment in the country’s insurance sector.
The commission said the guidelines were issued in exercise of its powers under the 2025 Act and other existing insurance laws and regulations to provide regulatory clarity, improve guidance, and ensure ease of compliance across the industry.
According to NAICOM, the guidelines establish a comprehensive structure for the operation of the IPPF, which serves as a statutory safety net to protect insurance policyholders in the event of distress or insolvency of a licensed insurer or reinsurer. The framework also provides direction on the reimbursement of loans by insurers and reinsurers.
NAICOM stated, “The guidelines ensure regulatory clarity, guidance and ease of compliance, as it provides a comprehensive regulatory framework for the collection, management, and administration of the Fund, which serves as a statutory safety net designed to protect insurance policyholders against distress and insolvency of a licensed insurer or reinsurer, including guidance for the reimbursement of loans by an insurer or reinsurer.
“Please be informed that the IPPF Assessment Returns in respect of the year 2025 shall be submitted to the Commission not later than 31st May 2026, while subsequent submissions shall be in line with Section 4.3 of the Guideline on Insurance Policyholders Protection Fund.”
By Adedapo Adesanya
The Dangote Refinery on Wednesday returned the petrol price to N1,200 per litre, less than 24 hours after it increased it by 5 per cent.
The private refinery had raised the ex-depot price by N75 on Tuesday, citing pressure from volatile global oil markets, but quickly brought it back to N1,200 per litre from N1,275 per litre.
The swift downward review is directly linked to a sharp drop in international crude prices. Brent crude has plunged to $95.05 per barrel, after a 13 per cent decline, while the US West Texas Intermediate (WTI) crude closed at $97.18, recording nearly a 14 per cent drop.
This development comes after US President Donald Trump announced a conditional two-week ceasefire with Iran, which eased fears of immediate supply disruptions in the global oil market.
“This will be a double-sided CEASEFIRE!” Trump said on social media, marking a sharp reversal from his earlier warning that “a whole civilisation will die tonight” if Iran failed to comply with US demands.
Iran’s Foreign Minister, Mr Abbas Araqchi, confirmed that the country would halt attacks provided strikes against Iran cease and transit through the Strait of Hormuz is coordinated by Iranian forces.
Despite the breakthrough, tensions remain elevated across the region, with several Gulf states reporting missile launches, drone activity, or issuing civil defence warnings.
While oil prices have fallen back below $100, they remain significantly elevated after surging by a record amount in March. Market analysts noted that regardless of how successful the ceasefire is, geopolitical risk related to the Strait of Hormuz is likely to remain elevated for the foreseeable future under the control of Iran.
By Adedapo Adesanya
Crude oil deliveries from the Nigerian National Petroleum Company (NNPC) Limited to the Dangote Petroleum Refinery doubled in March, boosting prospects for improved fuel availability.
This was revealed by the chief executive of Dangote Industries Limited, Mr Aliko Dangote, on Tuesday, when he received the Deputy Secretary-General of the United Nations, Mrs Amina Mohammed, at the industrial complex in Ibeju-Lekki, Lagos.
While speaking on feedstock supply, Mr Dangote commended the NNPC for increasing crude deliveries to the refinery in March, noting that volumes rose to 10 cargoes—six supplied in Naira and four in Dollars—to support domestic fuel availability, according to a statement by the Refinery.
“Last month, they gave us six cargoes for Naira and four cargoes for Dollars,” he said.
Despite the improvement, Mr Dangote noted that the supply remains below the 19 cargoes required for optimal operations, with the refinery continuing to bridge the gap through imports from the United States and other African producers.
He also expressed concern over the unwillingness of international oil companies operating in Nigeria to sell to the refinery, stating that their preference for selling crude to traders forces it to repurchase at higher costs, with broader implications for the economy.
Mr Dangote added that the refinery is seeking increased access to domestically priced crude under local currency arrangements as part of efforts to moderate fuel costs and enhance long-term energy and food security across the continent.
On her part, Mrs Mohammed underscored the strategic importance of Dangote Industries Limited -particularly Dangote Fertiliser Limited—in addressing Africa’s mounting food security challenges, while calling for stronger global partnerships to scale its impact.
Mrs Mohammed said the United Nations would prioritise amplifying scalable solutions capable of mitigating the continent’s food crisis, describing Dangote’s integrated industrial model as a critical pathway.
“I think the UN’s job here is to amplify and to put visibility on the possibilities of mitigating a food security crisis, and this is one of them,” she said. “I hope that when we go back, we can continue to engage partners and countries that should collaborate with Dangote Industries.”
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