Economy
Sticky Food Prices Limit Headline Inflation Moderation at 16.05%
By Cordros Research
Yesterday, the National Bureau of Statistics (NBS) released the Consumer Price Index (CPI) report for the month of July, showing that Nigeria’s inflation rate increased by 16.05 percent y/y, 5 bps lower than the 16.10 percent recorded in June, marking the sixth successive y/y decline in the headline index.
Broadly in line with our forecast, albeit 10 bps ahead of Bloomberg’s compiled average estimate of 15.95 percent, the inflation figure is consistent with the sense that the base effect driven moderation expected at the beginning of the year has waned.
Again, the fact that the headline index came above consensus, as has been the trend thus far this year, further corroborates the case that prices remain sticky downward. Good to mention, however, the month-on-month price increase of 1.21 percent, 37 bps lower than June’s 1.58 percent, is the second consecutive m/m moderation recorded thus far in 2017, and the lowest since January (1.01 percent).
On average, from end-2016 level, month-on-month inflation has increased by 1.50 percent, 22 bps higher than the 1.28 percent average recorded in the seven months to December 2016.
While it may be argued that the persisting inflationary pressure again supports the central bank’s Monetary Policy Committee’s (MPC) case of holding the line on its policy stance, we think the Committee’s subsequent decisions will largely be influenced by its considerations of inflation volatility and expectation, rather than inflation itself.
As shown in a recent study by the apex bank, “Modelling Inflation Rate Volatility in Nigeria with Structural Breaks”, inflation level in an economy may not really be what matters strictly but inflation volatility, and fiscal policies importantly affect the latter.
The study guides that inflation only causes high inflation volatility only in a situation where monetary policy is dominated by fiscal policy and the government deficit cannot be predicted. That partly confirms the MPC’s persistent call on the fiscal authority to pursue complementary policies that support fiscal-monetary policy harmony.
Downplaying the likelihood of a rate hike, despite identified likely risks to banking system liquidity amid anticipated fiscal injections over H2-2017, the MPC clearly noted that additional tightening will widen the income gap, weigh down aggregate consumption, and further constrain credit to the real sector of the economy.
Strengthening the case for a rate cut, on the other hand, a critical assessment of the Committee’s considerations in its last meeting reveals that, unlike in May – where members expressed uncertainty around key economic activities particularly food production – expectation is for a robust harvest season capable of subduing the rate of price increase on the food component, which is expected to combine with continued moderation in core inflation to ease the pressure on the headline index.
That said, we suspect a rate cut is unlikely to be earlier than November when output growth would have comfortably returned to the positive value, inflation rate would have decelerated close to the empirically established 10 percent – 12.5 percent threshold for Nigeria, and exchange rate stability would have been relatively consolidated.
Notably, consistent with observed trend this year, all classification of Individual Consumption by Purpose (COICOP) which aggregates the headline index increased during the month under review, with sizable price increases reported in the following major divisions: oil and fats, bread and cereals, meat, coffee, tea and cocoa, vegetables, fish, potatoes, yam and other tubers, and garments and clothing materials and other articles of clothing.
Food Index Pressure Persists
Food inflation increased by 20.28 percent y/y (vs. 19.91 percent in June), with the import component declining for the eighth consecutive month to hit a 17-month low of 14.08 percent.
Meanwhile, m/m rate in this segment, at 1.52 percent (vs. June’s 1.99 percent), continued the moderation it started in June, consistent with the 0.15 percent m/m drop in the average prices reportedly paid by households across various rural and urban markets and informal arrangements, according to the NBS Selected Food Price Watch for July, driven by notable declines in the prices of egg (-3.14 percent), bread (-1.90 percent), chicken (-1.30 percent), gari (-1.15 percent), and rice (-1.10 percent). Year-to-date, the food index has increased by 14.4 percent, compared to 11.6 percent same period last year.
Core Inflation Sustains Slower Rate of Increase
Core inflation increased at a slower pace for the eight consecutive month, rising by 12.20 percent in July, versus 12.50 percent in June, with the highest increases reported in clothing materials and articles of clothing, furniture and furnishing, books and stationary, medical services, glassware, tableware & household utensils, accommodation services and household textiles.
On a m/m basis, prices rose at a slower rate in this segment at 1.00 percent (1.32 percent the previous month), benefitting from reported decreases of 0.3 percent, 2.36 percent, and 6.08 percent in average national prices of premium motor spirit, kerosene, and diesel to N145.9/litre, N280.49/litre, and N197.62/litre respectively.
Food Prices Remain Fundamental to Headline Inflation
Clearly, the direction of headline inflation for the rest of the year will be largely driven by food prices. Save for potential risk of negative surprises, specifically with regards foreign exchange, and the possible increase in electricity tariff, we expect continued moderation in the core component.
Drilling down events vis-à-vis food prices, results being reported in most areas vis-à-vis the dry season harvest are generally favourable.
The raining season has commenced with near-normal timing and cumulative rainfall across most of the country, in line with earlier guidance for the rainy season through September/October for average to above-average cumulative precipitation.
In its latest report, FEWS NET revealed that outside of the northeast, staple harvests that begin as late as October in northern areas are likely to be more robust than last year’s, due to increased access to inputs as well as strong production incentives for farmers due to very high staple food prices, in addition to increased government funding and support. Granted, incidence of flooding has been reported in most parts of the country but not primarily on the back of unusually heavy downpour.
More so, affected areas were largely residential not farmlands.
That said, for the rest of 2017, we maintain our position that except monthly inflation rate stays below the 1.5 percent average recorded since the beginning of the year, the likelihood of the headline index reaching 20 percent by December cannot be ruled out.
To be specific, we forecast the headline inflation rate in 2017 to average 16.10% (bull case) or 17.73 percent (bear case).
Meanwhile, we look for the CPI recording a marginal decline to 16.03 percent y/y and 1.00 percent m/m in August.
By Adedapo Adesanya
The domestic supply of Premium Motor Spirit (PMS), also known as petrol, from the Dangote Refinery increased by 64.4 percent in December 2025, contributing to an enhancement in Nigeria’s overall petrol availability.
This is according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in its December 2025 Factsheet Report released on Thursday.
The downstream regulatory agency revealed that the private refinery raised its domestic petrol supply from 19.47 million litres per day in November 2025 to an average of 32.012 million litres per day in December, as it quelled any probable fuel scarcity associated with the festive month.
The report attributed the improvement to more substantial capacity utilisation at the Lagos-based oil facility, which reached a peak of 71 per cent in December.
The increased output from Dangote Refinery contributed to a rise in Nigeria’s total daily domestic PMS supply to 74.2 million litres in December, up from 71.5 million litres per day recorded in November.
The authority also reported a sharp increase in petrol consumption, rising to 63.7 million litres per day in December 2025, up from 52.9 million litres per day in the previous month.
In contrast, the domestic supply of Automotive Gas Oil (AGO) known as diesel declined to 17.9 million litres per day in December from 20.4 million litres per day in November, even as daily diesel consumption increased to 16.4 million litres per day from 15.4 million litres per day.
Liquefied Petroleum Gas (LPG) supply recorded modest growth during the period, rising to 5.2 metric tonnes per day in December from 5.0 metric tonnes per day in November.
Despite the gains recorded by Dangote Refinery and modular refineries, the NMDPRA disclosed that Nigeria’s four state-owned refineries recorded zero production in December.
It said the Port Harcourt Refinery remained shut down, though evacuation of diesel produced before May 24, 2025, averaged 0.247 million litres per day. The Warri and Kaduna refineries also remained shut down throughout the period.
On modular refineries, the report said Waltersmith Refinery (Train 2 with 5,000 barrels per day) completed pre-commissioning in December, with hydrocarbon introduction expected in January 2026. The refinery recorded an average capacity utilisation of 63.24 per cent and an average AGO supply of 0.051 million litres per day
Edo Refinery posted an average capacity utilisation of 85.43 per cent with AGO supply of 0.052 million litres per day, while Aradel recorded 53.89 per cent utilisation and supplied an average of 0.289 million litres per day of AGO.
Total AGO supply from the three modular refineries averaged 0.392 million litres per day, with other products including naphtha, heavy hydrocarbon kerosene (HHK), fuel oil, and marine diesel oil (MDO).
The report listed Nigeria’s 2025 daily consumption benchmarks as 50 million litres per day for petrol, 14 million litres per day for diesel, 3 million litres per day for aviation fuel (ATK), and 3,900 metric tonnes per day for cooking gas.
Actual daily truck-out consumption in December stood at 63.7 million litres per day for petrol, 16.4 million litres per day for diesel, 2.7 million litres per day for ATK and 4,380 metric tonnes per day for cooking gas.
By Adedapo Adesanya
The Securities and Exchange Commission (SEC) has introduced a comprehensive revision of minimum capital requirements for nearly all capital market operators, marking the most significant overhaul since 2015.
The changes, outlined in a circular issued on January 16, 2026, obtained from its website on Friday, replace the previous regime. Operators have been given until June 30, 2027, to comply.
The SEC stated that the reforms aim to strengthen market resilience, enhance investor protection, discourage undercapitalised operators, and align capital adequacy with the evolving risk profile of market activities.
According to the circular, “The revised framework applies to brokers, dealers, fund managers, issuing houses, fintech firms, digital asset operators, and market infrastructure providers.”
Some of the key highlights of the new reforms include increment of minimum capital for brokers from N200 million to N600 million while for dealers, it was raised to N1 billion from N100 million.
For broker-dealers, they are to get N2 billion instead of the previous N300 million, reflecting multi-role exposure across trading, execution, and margin lending.
The agency said fund and portfolio managers with assets above N20 billion must hold N5 billion, while mid-tier managers must maintain N2 billion with private equity and venture capital firms to have N500 million and N200 million, respectively.
There was also dynamic rule as firms managing assets above N100 billion must hold at least 10 per cent of assets under management as capital.
“Digital asset firms, previously in a regulatory grey area, are now fully covered: digital exchanges and custodians must maintain N2 billion each, while tokenisation platforms and intermediaries face thresholds of N500 million to N1 billion. Robo-advisers must hold N100 million.
“Other segments are also affected: issuing houses offering full underwriting services must hold N7 billion, advisory-only firms N2 billion, registrars N2.5 billion, trustees N2 billion, underwriters N5 billion, and individual investment advisers N10 million. Market infrastructure providers carry some of the highest obligations, with composite exchanges and central counterparties required to maintain N10 billion each, and clearinghouses N5 billion,” the SEC added.
By Aduragbemi Omiyale
The founder and chief executive of Austin Laz and Company Plc, Mr Asimonye Austin Lazarus Azubuike, has sold off about 52.24 million shares of the organisation.
The stocks were offloaded in 11 tranches at an average price of N4.36 per unit, amounting to about N227.8 million.
The transactions occurred between December 2025 and January 2026, according to a notice filed by the company to the Nigerian Exchange (NGX) Limited on Friday.
Business Post reports that Austin Laz is known for producing ice block machines, aluminium roofing, thermoplastics coolers, PVC windows and doors, ice cream machines, and disposable plates.
The firm evolved from refrigeration sales to diverse manufacturing since its incorporation in 1982 in Benin City, Edo State, though facing recent operational halts.
According to the statement signed by company secretary, Ifeanyi Offor & Associates, Mr Azubuike first sold 1.5 million units of the equities at N2.42, and then offloaded 2.4 million units at N2.65, and 2.0 million units at N2.65.
In another tranche, he sold another 2.0 million units at a unit price of N2.91, and then 5.0 million units at N3.52, as well as about 4.5 million at N3.87 per share.
It was further disclosed that the owner of the company also sold 9.0 million shares at N4.25, and offloaded another 368,411 units at N4.66, then in another transaction sold about 6.9 million units at N4.67.
In the last two transactions he carried out, Mr Azubuike first traded 10.0 million units equities at N5.13, with the last being 8.5 million stocks sold at N5.64 per unit.
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