Economy
CBN Faults JP Morgan’s $3.7bn Estimate of Nigeria’s Net Reserves
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has said the recent estimate of the country’s net external reserves by JP Morgan was “out of context”, and assured that there was no cause for panic.
Recall that Business Post earlier reported that the American investment bank said it estimated the value of Nigeria’s FX reserves at $3.7 billion against the $33.8 billion published by the apex bank.
Speaking on Money Line, a programme aired on Africa Independent Television (AIT), the Director of the Monetary Policy Department of CBN, Mr Hassan Mahmud, on Wednesday, said that fluctuations and liabilities encumbrances to the reserves were only natural and normal, adding that the apex bank built the reserves to defend the naira in terms of its value to other currencies.
He questioned the real intent of the report by the rating agency, saying, “Whether to rouse market sentiments, or whether to mislead the public?”
He stressed that the apex bank had tried as much as possible to be transparent in its operations.
Mr Mahmud also disclosed that CBN owned about 80 per cent of funds in reserves mainly to support the local currency in periods of volatility as well as boost the confidence of foreign investors, among others.
He stated, “We also read the JP Morgan numbers in-house, and we didn’t panic over that. That’s not the first time we have seen people and institutions reeling out numbers; they must have their intentions to do that, whether to rouse market sentiments or to mislead the public.
“But, the central bank has, as much as possible, tried to be transparent. What I will say about those numbers is that it is just funny in the sense that number one, reserves like any account balance, is a flow; there are changes that go within it at any particular time.
“Two, even if you have outstanding liabilities, you don’t mark the outstanding liabilities to market on a day and say this is your net balance.
“I can have $20 million in my account, and I owe someone maybe $13 million that is supposed to be paid in 2027; you can’t come in 2023 and say if I remove that $13 million, your money is $7 million or you are having $7 million.
“Now, I am not having $7 million; I am having $20 million. Because before I took a facility of $13 million, I know in the next three years, I will get $17 million, so I can pay you back.”
Mr Mahmud added, “But for you to come and tell me that no, your balance is $7 million and you can’t pay back in three years; it’s just putting it out of context.
“Yes, there are liabilities encumbrances to the reserves, which is normal. The CBN built the reserves to defend the naira in terms of its value to other currencies, and close to 80 per cent of the reserves is CBN’s funds.”
The CBN director also said, “When the federal government or the oil export receipts come to Nigeria, it comes through the central bank. The CBN monetises that to naira, and the federal government spends the naira in the implementation of its budget.
“So, that dollar component sits with the central bank, and the purpose of the dollar component, one, is to build the confidence of the international community in the capability of the central bank to meet its trade commitment, and so you will see measurements around what months of imports either goods and services or goods only can your reserves cover?
“That gives some confidence to foreign investors trading with Nigerian investors in terms of import and export. Two, in the event that, for example, we have a float-managed exchange rate regime – in the event that the value of your currency is significantly depreciating or appreciating or whatever direction it is going – the central bank has the firepower to intervene in the market such that you bring the price to your expected or optimal equilibrium rate.”
Mr Mahmud further stated, “So, that is what the reserve is meant for – the reserve is not meant for just trading – in the event that there are also shortfalls in the build-up of those reserves, you can take a swap or other engagements that are legally allowed by the CBN Act over the short period of time.
“The exchange rate, like we mentioned several times, is also part of the tools to address price stability, including leading to inflation and all that.
“So, the reserves are tools we can comfortably use to build investors’ confidence in the Nigerian economy and also build the sovereign confidence in terms of our exposures to multilaterals the CBN is owing and service its debts.
“So, people do all those calculations. Okay, for example, we have some government loans that are for 10 years, and there is annual service interest that you are supposed to pay to amortise those loans.”
He stressed, “If you come today and sum up the entire facility, maybe $20 billion, and you say the federal government owes $20 billion for the past 10 years; if you remove that $20 billion from the $33 billion, you have only N3 billion to service your debt, that’s wrong because there’s going to be inflows; the federal government is going to earn some monies.
“I don’t know how they did their calculations, and I don’t have any information about that, but we also saw those numbers that came out.”
By Aduragbemi Omiyale
One of the paint makers in Nigeria, Premier Paints Plc, is currently in talks with a new investor, Xenergi Limited, for the purchase of 51 per cent stake in the company.
Xenergi Limited intends to acquire shares of Clover Global Resources Limited and TGHL Capital Limited in the organisation.
Business Post gathered that the new investor will buy 39.02 per cent from Clover Global Resources Limited and 15.20 per cent from TGHL Capital Limited.
The deal, according to a regulatory notice issued on Tuesday on the Nigerian Exchange (NGX) Limited, will involve about 63 million shares of Premier Paints.
At the current share price of the paint producer, this should be about N630 million as it closed at N10.00 per unit on NGX on December 16, 2025.
“Subject to obtaining required regulatory approvals, the transaction is expected to close before January 31, 2026.
“The company will continue to inform the public of the progress of the transaction,” the disclosure signed by the company secretary, Alozie Nwokoro, said.
By Adedapo Adesanya
The Naira was flat against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, December 16, retaining the previous closing value of N1,451.82/$1.
In the same vein, the local currency saw no movement against the Pound Sterling and the Euro in the spot market during the session at N1,943.98/£1 and N1,705.74/€1, respectively.
Also, the Nigerian Naira remained unchanged in the black market yesterday at N1,475/$1 and was N1,460/$1 at the GTBank forex counter.
The Central Bank of Nigeria (CBN) has strengthened US Dollar supply with $250 million to authorised dealer banks at the official window cumulatively as foreign portfolio investors, exporters and non-bank corporate supply dripped.
The spread between official and other non-regulated markets decreased to N30.59$/1 from N44.57/$1, from the previous week, research subsidiary of Coronation Merchant Bank Limited said in a report.
FX analysts said foreign exchange inflows through the Nigerian Foreign Exchange Market decreased to $716.3 million from $844.70 million in the previous week , a 15 per cent drop in a week.
Foreign portfolio investors accounted for the highest share of inflows at 32.98 per cent, followed by exporters at 30.84 per cent, the CBN (17.36 per cent), Non-bank Corporates (16.94 per cent), others (0.72 per cent) and Individuals (0.63 per cent).
On Monday, Nigeria’s headline inflation rate eased to 14.45 per cent in November 2025, down from 16.05 per cent recorded in October, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS), representing a decrease of 1.6 percentage points month-on-month and marks a significant moderation compared to the same period last year.
As for the cryptocurrency market, there was some recoveries after overall capitalization falling below $3 trillion for the third time in a month. Large-cap assets, particularly those with Exchange Traded Fund (ETF) exposure, are experiencing selling pressure as institutional investors reassess risk.
Ripple (XRP) appreciated by 1.5 per cent to $1.92, Litecoin (LTC) expanded by 1.5 per cent to $78.91, Dogecoin (DOGE) rose by 0.8 per cent to $0.1308, Solana (SOL) went up by 0.4 per cent to $127.60, Binance Coin (BNB) grew by 0.3 per cent to $865.40, and Bitcoin (BTC) gained 0.2 per cent to sell at $86,735.17.
On the flip side, Cardano (ADA) depreciated by 1.0 per cent to $0.3802 and Ethereum (ETH) slumped by 0.4 per cent to $2,935.85, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were flat at $1.00 each.
By Dipo Olowookere
A marginal 0.01 per cent rise was recorded by the Nigerian Exchange (NGX) Limited on Tuesday. This was different from the flattish mode of the market the previous day.
Investor sentiment remained bullish as Customs Street finished with 31 price gainers and 26 price losers, implying a positive market breadth index.
Aluminium Extrusion topped the gainers’ log after it improved its price by 10.00 per cent to N9.35, Guinness Nigeria appreciated by 9.98 per cent to N263.40, Multiverse expanded by 9.95 per cent to N12.15, MeCure Industries also soared by 9.95 per cent to N45.85, and Sovereign Trust Insurance advanced by 9.89 per cent to N4.11.
Conversely, Haldane McCall led the losers’ chart after it shed 9.93 per cent to settle at N3.72, Veritas Kapital lost 9.09 per cent to close at N1.60, LivingTrust Mortgage Bank also declined by 9.09 per cent to N3.50, and Linkage Assurance depreciated by 5.71 per cent to N1.65.
During the trading day, the All-Share Index (ASI) went up by 21.23 points to 149,459.11 points from the previous day’s 149,437.88 points and the market capitalisation increased by N14 billion to N95.281 trillion from N95.267 trillion.
Yesterday, traders transacted 1.0 billion equities for N21.8 billion in 23,701 deals compared with the 553.1 million equities valued at N13.3 billion traded in 28,907 deals on Monday, representing a decline in the number of deals by 18.01 per cent, and a surge in the trading volume and value by 80.80 per cent and 63.91 per cent apiece.
Access Holdings traded 385.8 million stocks worth N7.7 billion, Champion Breweries transacted 111.8 million shares valued at N817.8 million, Sterling Holdings exchanged 85.5 million equities for N589.9 million, FCMB sold 74.7 million shares valued at N791.5 million, and First Holdco transacted 51.9 million equities worth N1.8 billion.
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