Economy
Any Rate Cut by MPC Will Lead to Negative Real Yield—FSDH
By Modupe Gbadeyanka
Analysts at FSDH Research have warned that any attempt by the Monetary Policy Committee (MPC) to cut rate at its meeting next week will lead to a negative real yield, with a possible significant capital flight from Nigeria by foreign investors.
FSDH, in its latest report obtained by Business Post, said it expects the committee to still hold the rate at 14 percent.
Members of the MPC will meet next week and observers are keenly awaiting outcome of the meeting.
FSDH noted that the value of the Naira recorded a mixed performance but show relative stability since the last MPC meeting in July 2017.
The value of the Naira depreciated at the official market, while it closed unchanged at the parallel market.
The inter-bank market rate depreciated marginally by 0.07 percent to N305.95/$ on September 15, 2017 from N305.75/ $ on July 25, 2017.
The parallel market closed unchanged at N367/ $ on September 15, 2017 same as at July 25, 2017.
It said the premium between the inter-bank and parallel markets averaged about N61 after the last MPC meeting in July 2017 and September 15, 2017 from an average of N66 during the period between the MPC Meeting of May and July 2017 meeting.
“A rate cut will lead to a negative real yield, with a possible significant capital flight from Nigeria by foreign investors. Thus, a hold decision is appropriate,” the report said.
FSDH also noted that the yields on NTBs decreased in August 2017, compared with July 2017. At the NTBs auction, average yield on the 91-day was down at 13.82 percent in the month of August compared with 13.93 percent recorded in July 2017.
The average 182-Day NTB stood at 19.02 percent in August 2017, down from 19.11 percent in July 2017. The average 364-Day NTB yield also closed lower at 22.73 percent in August 2017, from 22.80 percent in July 2017.
“The yields on the FGN Bonds that we monitored closed higher in August 2017 over the preceding month. The average yield on the 16 percent FGN June 2019 increased to 16.84 percent in August from 16.62 percent in July.
The 16.39 percent FGN Jan 2022 closed at 16.33 percent in August 2017, marginally higher than 16.13 percent in July 2017; the 10 percent FGN Jan 2030 also closed at 16.43 percent in August 2017, higher than 16.12 percent in July 2017.
“We expect the yields on the fixed income securities to trend downward going forward. This is because of FX stability, plans of the FGN to refinance part of the local debt into foreign debt and the positive GDP growth rate expected going forward,” it said.
The report also said the monetary aggregates (narrow money and broad money) as at July 2017 show that the annualised growth rate in money supply is below the target that the CBN sets for the year 2017.
The broad money supply (M2) decreased by 5.08 percent to N22.20trn in July 2017 from N23.39trn in December 2016. This is lower than the CBN’s growth rate target of 10.29 percent for the year 2017.
The net domestic credit increased marginally by 1.92 percent to N27.16trn in July 2017 from N26.65trn in December 2016.
The annualised growth rate in the net domestic credit in July 2017 was 3.29 percent, below the target growth rate of 17.93 percent for 2017.
The net domestic credit to the Federal Government increased by 6.88 percent to N4.99trn in July 2017 from N4.67trn in December 2016. The net domestic credit to private sector also increased marginally by 0.87 percent to N22.17trn in July 2017 from N21.98trn in December 2016.
The CBN has maintained tight monetary policy to curb high inflation rate and ensure FX stability.
“Looking at the developments both in the domestic and international markets, a hold in rates at this meeting will be appropriate in order to sustain the current growth rate in the economy. However, the MPC may adjust the asymmetric corridor around the MPR to signify easing.
“Meanwhile, fiscal measures in the forms of tax relief and tariff adjustment are required to boost economic activities,” the report said.
By Adedapo Adesanya
Dangote Petroleum Refinery imported a total of $3.74 billion) worth of crude oil in 2025, to make up for shortfalls that threatened the plant’s 650,000-barrel-a-day operational capacity.
The data disclosed in the Central Bank of Nigeria’s Balance of Payments report noted that “Crude oil imports of $3.74 billion by Dangote Refinery” contributed to movements in the country’s current account position, as Nigeria imported crude oil worth N5.734 trillion between January and December 2025.
Last year, as the Nigerian National Petroleum Company (NNPC), which is the refinery’s main trade partner and minority stakeholder, faced its challenges, the company had to forge alternative supply links. This led to the importation of crude from Brazil, Equatorial Guinea, Angola, Algeria, and the US, among others.
For instance, in March 2025, the company said it now counts Brazil and Equatorial Guinea among its global oil suppliers, receiving up to 1 million barrels of the medium-sweet grade Tupi crude at the refinery on March 26 from Brazil’s Petrobras.
Meanwhile, crude oil exports dropped from $36.85 billion in 2024 to $31.54 billion in 2025, representing a 14.41 per cent decline, further shaping the external balance.
The report added that the refinery’s operations also reduced Nigeria’s reliance on imported fuel, noting that “availability of refined petroleum products from Dangote Refinery also led to a substantial decline in fuel imports.”
Specifically, refined petroleum product imports fell sharply to $10.00 billion in 2025 from $14.06 billion in 2024, representing a 28.9 per cent decline, while total oil-related imports also eased.
However, this was offset by a rise in non-oil imports, which increased from $25.74 billion to $29.24 billion, up 13.6 per cent year-on-year, reflecting sustained demand for foreign goods.
At the same time, the goods account remained in surplus at $14.51 billion in 2025, rising from $13.17 billion in 2024, supported largely by activities linked to the Dangote refinery and improved export performance in other segments.
The CBN stated that the stronger goods balance was driven by “significant export of refined petroleum products worth $5.85bn by Dangote Refinery,” alongside increased gas exports to other economies.
Nigeria posted a current account surplus of $14.04 billion in 2025, lower than the $19.03 billion recorded in 2024 but significantly higher than $6.42 billion in 2023. The decline from 2024 was driven partly by structural changes in oil trade flows, including crude imports for domestic refining, according to the report.
Pressure on the current account came from higher external payments. Net outflows for services rose from $13.36 billion in 2024 to $14.58 billion in 2025, driven by increased spending on transport, travel, insurance, and other services.
Similarly, net outflows in the primary income account surged by 60.88 per cent to $9.09 billion, largely due to higher dividend and interest payments to foreign investors.
In contrast, secondary income inflows declined slightly from $24.88 billion in 2024 to $23.20 billion in 2025, as official development assistance and personal transfers weakened, although remittances remained a key source of inflow, as domestic refineries grappled with persistent feedstock shortages, exposing a deepening supply paradox in the country’s oil sector.
This comes despite the Federal Government’s much-publicised naira-for-crude policy designed to prioritise local supply.
By Aduragbemi Omiyale
An application has been submitted by Sovereign Trust Insurance Plc for its proposed N5.0 billion rights issue.
The application was sent to the Nigerian Exchange (NGX) Limited, and it is for approval to list shares from the exercise when issued to qualifying shareholders.
A notice signed by the Head of Issuer Regulation Department of the exchange, Mr Godstime Iwenekhai, disclosed that the request was filed on behalf of the underwriting firm by its stockbrokers, Cordros Securities Limited, Dynamic Portfolio Limited and Cedar of Lebanon Securities.
The company intends to raise about N5.022 billion from the rights issue to boost its capital base, as demanded by the National Insurance Commission (NAICOM) for insurers in the country.
Sovereign Trust Insurance plans to issue 2,510,848,144 ordinary shares of 50 Kobo each at N2.00 per share on the basis of three new ordinary shares for every 17 existing ordinary shares held as of the close of business on Tuesday, March 17, 2026.
“Trading license holders are hereby notified that Sovereign Trust Insurance has through its stockbrokers, Cordros Securities Limited, Dynamic Portfolio Limited and Cedar of Lebanon Securities, submitted an application to Nigerian Exchange Limited for the approval and listing of a rights issue of 2,510,848,144 ordinary shares of 50 Kobo each at N2.00 per share on the basis of three new ordinary shares for every 17 existing ordinary shares held as of the close of business on Tuesday, March 17, 2026,” the notification read.
By Adedapo Adesanya
Food Concepts Plc, the parent company of fast food brands like Chicken Republic and PieXpress, has disclosed plans to pay 10 Kobo in interim dividend to new and existing shareholders for the 2026 financial year.
This was disclosed by the company in a notice to the NASD Over-the-Counter (OTC) Securities Exchange, where it trades its securities.
The notice indicated that the proposed interim dividend, which comes with no bonus, will be paid to those who hold the stocks of the company as of the qualification date for the dividend, which was Tuesday, March 24.
This means only those who hold the company’s shares as of the closing session will be eligible to receive the stipulated dividend payment.
The shareholders of the company will be credited with the 10 Kobo dividend on Tuesday, March 31.
The notice noted that the closure of the company’s register will be on Wednesday, March 25, through Friday, March 27, 2026, both days inclusive.
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