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 Adedapo Adesanya
The Nigeria LNG Limited and the Bank of Industry (BoI) have launched a Micro, Small and Medium Enterprises (MSMEs) finance scheme with a model that slashes loan interest rates to 9 per cent.
The initiative was piloted in Rivers State to stimulate grassroots economic growth and offer a lifeline for entrepreneurs navigating the current high-cost financial landscape.
The initiative is aimed at providing affordable credit and capacity-building to small businesses and vendors across NLNG’s host communities and Gas Transmission System areas.
Speaking at its relaunch in Port Harcourt, NLNG’s General Manager, External Relations and Sustainable Development, Mrs Sophia Horsfall, said it is a “transformative economic intervention” tailored to reduce poverty and drive sustainable development.
“More than just a micro-credit finance scheme—we ignite new possibilities for grassroots entrepreneurs and small businesses After years of funding and empowering local enterprises, we took a strategic pause to reassess and enhance our impact. This partnership with the Bank of Industry is a bold new step to drive real economic growth in Rivers State and beyond,” she averred.
Mrs Horsfall noted that rising commercial loan interest rates had necessitated NLNG’s intervention with a subsidized model.
“We have introduced a buffer that allows beneficiaries to access loans at a reduced interest rate of 9 per cent. It is not just about financing—it’s about transformation, empowerment, and long-term impact. As we take this bold step forward, we do so with pride, knowing that today, we are shaping a stronger, more sustainable future for all,” she noted.
Under the model, NLNG provides a seed fund matched by BOI, creating a robust pool to support micro-enterprises and local contractors.
The scheme is fully digitalised, with an online portal developed to streamline loan applications and disbursements, ensuring transparency and efficiency.
Representing the Managing Director of BOI, Mr Olasupo Olusi, the Executive Director for MSMEs, Mr Omar Shekarau, said the partnership aligns with the bank’s 2025–2027 corporate strategy, which targets inclusive and sustainable development across six key pillars: youth and skills, gender, digital, MSMEs, climate finance, and infrastructure.
“This partnership also reflects BOI’s reinforced focus. To ensure efficiency and transparency, BOI has deployed a cutting-edge end-to-end loan management platform, the BOI Fund Partner Solution, which allows fund partners real-time access to the performance of their fund.”
He added that BOI remains committed to making long-term, affordable financing available to Nigerian MSMEs while transforming the industrial landscape through strategic partnerships.
“Through this strategic collaboration with BOI, NLNG reinforces its commitment to fostering economic development, empowering local businesses, and sustaining long-term growth within its host communities,” he added.
The reintroduction of the scheme is being hailed as a major boost for small business owners grappling with limited access to credit facilities amidst Nigeria’s tough economic climate.
By Dipo Olowookere
The stop rates for the 91-day and 182-day treasury bills were raised by the Central Bank of Nigeria (CBN) on Wednesday, while that of the 364-day tenor was left unchanged as appetite for the long maturity slows.
Details of the exercise showed that the Central Bank of Nigeria (CBN), which sold the debt instrument through a primary market auction (PMA) for the Debt Management Office (DMO), jacked the rate for the three-month bill higher by 0.50 per cent and pushed the six-month paper higher by 1.00 per cent.
Business Post reports that the stop rate for the short-date instrument cleared yesterday at 18.50 per cent, the half-year note cleared at 19.50 per cent, and the one-year bill remained at 19.63 per cent.
The central bank was at the market with N50.00 billion worth of the 91-day treasury bills but received subscriptions valued at N114.30 billion, and allotted N111.81 billion.
It also auctioned N100.00 billion worth of the 182-day instrument during the session, but got bids valued at N107.09 billion and allotted N105.79 billion.
Like in the previous sessions, the 364-day bill was oversubscribed by investors, though the level was not like in the past. The apex bank offered to sell N650.00 billion worth of the paper to the market participants, but received offers valued at N905.56 billion and allotted N206.98 billion.
From the analysis, the CBN offered investors treasury bills worth N800 billion across the three maturities, but got bids valued at N1.127 trillion and allotted N424.58 billion.
By Adedapo Adesanya
African telecommunications giant, MTN Group, has announced plans to reduce its shareholding in MTN Nigeria through a public offer as it foresees the return of the Nigerian subsidiary to profitability this year.
The group aims to cut its stake from 76 per cent to 65 per cent in line with its longstanding commitment to deepen local ownership.
According to South African tech publication ITWeb, this was disclosed by Mr Ralph Mupita, MTN Group president, during an editors’ roundtable meeting on Tuesday.
“The only localisation we have as MTN Group is we have potentially a sell-down in Nigeria at some point in time, approximately 11 per cent.
“This is something we have said long ago, that over time we would want more Nigerians owning the company, and we are prepared to sell down to 65 per cent. We are at around 76 per cent,” he said.
The offer would mark MTN’s second major retail public offering in Nigeria, following its 2021 sale of 575 million MTN Nigeria shares to local investors.
The offer was oversubscribed, resulting in the allocation of 661.25 million shares, including a 15 per cent greenshoe option.
This reduced MTN’s stake in its Nigerian unit to 75.6 per cent from 78.8 per cent.
More than 126,000 investors participated in that round, including retail and institutional investors such as Nigerian pension funds representing approximately 6.5 million contributors.
At the time in 2022, MTN Group announced plans to further reduce its stake to approximately 65 per cent from 75.6 per cent.
Mr Mupita confirmed that the Group would only proceed with a new offer once MTN Nigeria resolves its negative equity position and resumes dividend payments.
Despite reporting revenue of N3.36 trillion in 2024, a 36.03 per cent rise from N2.47 trillion in 2023, it posted a loss after tax of N400.44 billion, a 192.25 per cent rise from N137.02 billion in 2023.,
This negative performance was driven by macroeconomic headwinds, including record inflation and a steep devaluation of the Naira, which raised operating costs and wiped out investor value.
As a result, MTN Nigeria lost its position to MTN South Africa as the group’s largest revenue contributor.
However, the Group is projecting a rebound in 2025, citing key drivers such as recent tariff adjustments, operational restructuring, and improving macroeconomic indicators in Nigeria.
Speaking at the roundtable, Mr Mupita highlighted that the Group is anticipating a V-shaped recovery in Nigeria’s service revenue.
He pointed to the recent structural reforms, such as the removal of fuel subsidies, the naira stabilisation, and improved Dollar availability.
“The continued normalisation of these factors, particularly naira stability, should have positive impacts on consumer spending power and our business operations,” Mr Mupita noted in the Group’s financial statement for 2024 recently.
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