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
Despite signs that Nigeria’s headline inflation is easing, rising food prices continue to threaten the country’s inflation outlook, the chief executive of the Centre for the Promotion of Private Enterprise (CPPE), Mr Muda Yusuf, has warned.
He noted that structural inflationary pressures in the real economy remain pronounced despite improving macroeconomic stability.
In a policy brief released following the inflation report, he noted that headline inflation eased marginally, while month-on-month change moderated from 1.75 per cent to 1.66 per cent, indicating that headline inflation has largely plateaued.
According to him, the dominant concern in the latest inflation report is the renewed acceleration in food inflation.
This growth, he said, suggested that food prices have resumed an upward trajectory after a brief period of moderation.
Warning that a renewed increase in food inflation has significant economic and social implications, he stressed that food inflation remained the biggest driver of Nigeria’s cost-of-living crisis, stressing that rising food prices continue to erode household purchasing power, worsen poverty and food insecurity while weakening the inclusiveness of the current reform programme.
He maintained that sustained moderation in food prices is critical to improving citizens’ welfare and strengthening public confidence in the ongoing economic reforms.
Acknowledging the easing of core inflation as encouraging, he drew attention to the persistence of urban inflation.
At 16.08 per cent, urban inflation exceeded the national headline inflation rate of 15.91 per cent, while month-on-month urban inflation increased from 1.99 per cent to 2.13 per cent.
According to Mr Yusuf, the figures indicated that inflationary pressures remained particularly intense across urban centres.
He attributed the rising urban inflation partly to increasing population displacement from rural communities affected by insecurity, expressing worry that as more households migrate to urban areas, demand for housing, transportation, utilities and other essential services would increase, adding to inflationary pressures and creating additional urbanisation challenges.
Addressing insecurity in farming communities, he said, was important not only for protecting lives and property and boosting agricultural output but also for easing cost pressures in urban centres, adding that the June CPI data reinforced the view that Nigeria’s inflation challenge is predominantly structural rather than monetary.
On the monetary policy outlook, he said the data do not justify further monetary tightening, arguing that headline inflation has largely stabilised.
The CPPE chief expected the Monetary Policy Committee (MPC) to retain the current monetary policy rate at its next meeting, adding that the priority is for monetary and fiscal authorities to work together to accelerate structural reforms to expand food supply, improve logistics, reduce energy and production costs, lower debt service costs, as well as strengthen domestic value chains.
By Aduragbemi Omiyale
Additional shares of Sterling Financial Holdings Company Plc have been listed on the Nigerian Exchange (NGX) Limited.
The new equities were added to the company’s existing stocks on Customs Street on Thursday, July 16, 2026, a notice from the bourse confirmed.
Business Post reports the total new ordinary shares of Sterling Holdings listed yesterday were 13,812,239,000 units.
They were from the offer for subscription of 12,581,000,000 ordinary shares of 50 Kobo each sold for N7.00 per share, which was oversubscribed by investors.
The financial institution brought the new shares to the stock exchange to increase its total issued and fully paid-up shares to 65,929,251,414 ordinary shares of 50 Kobo each from 52,117,012,414 ordinary shares of 50 Kobo each.
“Trading licence holders are hereby notified that an additional 13,812,239,000 ordinary shares of 50 Kobo each of Sterling Financial Holdings Company Plc were on Thursday, July 16, 2026, listed on the daily official list of Nigerian Exchange Limited.
“The additional shares listed on NGX arose from the company’s offer for subscription of 12,581,000,000 ordinary shares of 50 Kobo each at N7.00 per share.
“With the listing of the additional shares, the total issued and fully paid-up shares of Sterling Financial Holdings Company Plc have now increased from 52,117,012,414 to 65,929,251,414 ordinary shares of 50 Kobo each,” the notice read.
By Adedapo Adesanya
President Bola Tinubu has signed a Presidential Executive Order on Virtual Assets Coordination, establishing a new framework to coordinate the regulation of virtual assets across government agencies as Nigeria seeks to curb fraud while supporting innovation in the digital economy.
The Executive Order, which takes immediate effect, creates a Virtual Asset Council chaired by the Central Bank of Nigeria (CBN) to harmonise oversight of cryptocurrencies, tokenised assets, stablecoins, and other digital assets without creating a new regulator.
As part of the new framework, the CBN will establish a regulatory sandbox that will allow eligible firms to test virtual asset products, blockchain solutions, and related services under regulatory supervision before they are introduced to the wider market.
The development was disclosed in a statement issued on Friday by the President’s Special Adviser on Information and Strategy, Mr Bayo Onanuga.
According to the presidency, the Executive Order responds to the growing complexity of virtual assets, which increasingly cut across the traditional boundaries of currencies, securities, commodities, and payment systems.
The fragmented regulatory environment has left gaps that have exposed Nigeria to money laundering, terrorism financing, cybersecurity and data privacy risks, fraud, and revenue losses.
The government said some unregistered operators have exploited these regulatory gaps to defraud unsuspecting Nigerians, resulting in significant financial losses.
“The Order is designed to close these gaps through supervisory coordination, without introducing new layers of regulation or displacing the mandates of existing agencies,” the statement read.
Under the new framework, the Virtual Asset Council will be chaired by the CBN, with the Nigeria Revenue Service (NRS) and the Securities and Exchange Commission (SEC) serving as vice chairs. Other members include the Nigerian Financial Intelligence Unit (NFIU) and the Office of the National Security Adviser (ONSA).
The Council will provide policy direction, improve cooperation among participating agencies, and work with the Attorney General of the Federation to develop a harmonised legal and institutional framework for the sector.
The Executive Order also establishes a Virtual Asset Office, which will serve as the Council’s operational arm. The office will be domiciled at the CBN and will coordinate information sharing, applications, and reporting among the participating agencies through a shared supervisory technology platform.
The presidency stressed that the Executive Order does not create a new regulator or transfer statutory powers from existing agencies, clarifying that instead, each institution will continue to exercise its existing mandate while working within a coordinated framework.
Under the arrangement, registration of virtual asset businesses will depend on the nature of the service being offered.
Activities classified as securities will continue to be regulated by the SEC, while payment, settlement, custody, and other services involving non-security virtual assets will fall under the CBN.
Where there is uncertainty over regulatory jurisdiction, the Virtual Asset Council will determine the appropriate supervising agency.
“The sandbox will provide a controlled environment in which eligible operators can test and operate virtual asset products, services, and blockchain-based solutions under close supervision, enabling the participating agencies to assess the implications for monetary sovereignty, financial stability, market integrity, consumer protection, financial inclusion, and revenue administration before products reach the wider market,” the statement added.
According to the presidency, the sandbox will enable regulators to evaluate the implications of emerging products for financial stability, monetary sovereignty, consumer protection, financial inclusion, market integrity, and revenue administration.
The central bank is expected to announce further details of the sandbox.
