Welcome to the February 2025 edition of the Duplo Economic Digest! This month, we break down the biggest financial headlines, market movements, and emerging opportunities for businesses navigating Nigeria’s dynamic economy. Let’s dive in!Â
Nigeria Macroeconomic Recap
Collaboration across the board, both internally and internationally, is increasing.
Dangote Refinery Slashes Petrol Prices Again ahead of Ramadan
Dangote Petroleum Refinery has cut the ex-depot petrol price from ₦890 to ₦825 per litre, marking its second price reduction in February. The latest ₦65 price drop, effective February 27, 2025, follows a ₦60 reduction on February 1st and is positioned as a strategic move to ease financial pressure on Nigerians, particularly as Ramadan approaches. The refinery also framed the price cut as support for President Bola Tinubu’s economic recovery efforts, aiming to reduce transportation costs and household expenses. Despite the lower ex-depot price, pump prices will vary across regions.
In Lagos, MRS Holdings is projected to sell at ₦860 per litre, while Ardova Petroleum (AP) and Heyden stations are expected to retail at ₦865. Prices will be slightly higher in other regions, reaching ₦895 per litre in the South-South and South-East at AP and Heyden stations. This is not the first time the refinery has reduced petrol prices, having implemented a ₦70.50 cut during the December 2024 festive season. However, despite Dangote’s growing supply, petrol imports continue, underscoring the evolving dynamics of Nigeria’s fuel market.
Senate passes a budget of ₦54.99 trillion
The Senate passed the 2025 budget bill, approving a total expenditure of ₦54.99 trillion after reviewing key highlights. The budget includes allocations for recurrent spending, capital projects, debt servicing, and a projected fiscal deficit. President Bola Tinubu had increased the initial proposal from ₦49.7 trillion to ₦54.2 trillion, citing additional revenues of ₦4.4 trillion from the FIRS, NCS, and other government agencies. The adjustment was conveyed in letters to the National Assembly, read by Senate President Godswill Akpabio during plenary.
Flutterwave meets with President Tinubu
President Bola Ahmed Tinubu met with fintech organisations to facilitate the signing of a Memorandum of Understanding (MoU) between the National Information Technology Development Agency (NITDA), Flutterwave, and Alami. The MoU aims to accelerate fintech growth and expand Nigeria’s digital economy, focusing on strengthening public-private partnerships to enhance digital payment infrastructure and technology financing. It also includes plans for Digital Nigeria Week 2025, which will serve as a platform for showcasing fintech innovations, supporting SME growth, and hosting strategic industry discussions. Additionally, the agreement aligns with NITDA’s national digital initiatives, including the agency’s Strategic Roadmap and Action Plan (SRAP 2.0), digital literacy programs, and efforts to improve cybersecurity. Beyond fintech, the partnership is set to empower small businesses and young entrepreneurs.
CBN Governor Seeks Stronger Ties with the Middle East
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has called for deeper economic collaboration between Nigeria and the Middle East, particularly in infrastructure, tourism, and financial sector development. Speaking at the inaugural Conference on Emerging Markets Economies in Saudi Arabia, Cardoso met with Talal Al-Humond, Assistant Governor for Monetary Affairs at the Saudi Central Bank, to explore areas of mutual interest. He highlighted Saudi Arabia’s economic diversification and large-scale infrastructure projects as models Nigeria could learn from. He also emphasised the importance of engaging the Nigerian diaspora in the region to boost remittance inflows and strengthen the financial sector.
Finance Flashback
Increasing intended and unintended costs on every side
CBN reduces its grip on interest rates
The Central Bank of Nigeria’s Monetary Policy Committee (MPC) at its 299th meeting on February 19–20, 2025, retained the Monetary Policy Rate (MPR) at 27.50%, marking a pause in the rate hikes seen since February 2024. This decision reflects the CBN’s focus on balancing inflation control with exchange rate stability while ensuring sufficient liquidity to support economic growth. A mix of domestic and global factors influenced the MPC’s decision. While inflation in Nigeria remains elevated, recent foreign exchange reforms and improved food supply have helped moderate price pressures. However, global inflation, particularly in the United States and Europe, has started to rise again, which could lead central banks in these economies to adopt a more hawkish stance.
The Federal Reserve’s signals of prolonged higher interest rates could lead to tighter global financial conditions, impacting capital flows into emerging markets like Nigeria. A stronger U.S. dollar and higher yields in advanced economies could pressure the naira and limit the CBN’s flexibility in easing rates. If global inflation persists, Nigeria may need to maintain its tight monetary stance longer to prevent capital flight. However, if domestic inflation continues to decline and global conditions stabilise, the CBN may consider easing monetary policy later in the year to stimulate growth. For now, the MPC remains cautious, signaling that while inflation control remains a priority, external risks will also shape its policy direction in the months ahead.
CBN Introduces New ATM Charges, Raising Financial Inclusion Concerns
The CBN has announced new charges for ATM transactions, set to take effect on March 1, 2025. Customers using their bank’s ATMs will continue to enjoy free withdrawals, but transactions on other banks’ ATMs will now attract a fee of ₦100 per ₦20,000. This charge applies even to withdrawals below ₦20,000 to prevent users from splitting transactions. Additionally, off-site ATMs—those in public spaces like malls and fuel stations—will carry a surcharge of up to ₦500 per ₦20,000 withdrawal.
The new charges have sparked concerns about their potential effects on financial inclusion. Higher withdrawal fees could discourage ATM use, particularly among low-income earners who rely on cash transactions. The added costs could also place further strain on already struggling households. While the CBN hopes the fees will encourage banks to deploy more ATMs, higher costs might deter usage, limiting the intended benefits. Critics argue that the new charges contradict the CBN’s earlier efforts to promote cashless transactions and financial inclusion. The policy will disproportionately impact low-income Nigerians, exacerbating economic hardship.
The financial sector is fraught with more (sophisticated) fraud.
Fraud in Nigeria’s banking sector is becoming more sophisticated, with financial losses reaching ₦52.26 billion in 2024, a sharp rise from ₦17.67 billion in 2023 and ₦11.61 billion in 2020. A new report by the Nigeria Inter-Bank Settlement System (NIBSS) reveals that despite a 31% decline in fraud incidents over the past five years, losses have surged by 196%, exposing significant vulnerabilities in the financial system. One of the most alarming trends is the misuse of Bank Verification Numbers (BVNs) by compromised bank staff and agents.
The report also highlights other fraud methods, including identity theft targeting senior citizens and foreigners, with over ₦400 million stolen through accounts opened with fake credentials. The rise of digital payments has provided new opportunities for fraudsters, with mobile channels becoming the preferred medium for illicit transactions. To curb these threats, NIBSS calls for stricter regulatory enforcement, real-time biometric verification, and an Enterprise Fraud Management System to detect and block suspicious transactions. The report urges financial institutions to improve fraud reporting and compliance with CBN regulations, as the banking sector races to stay ahead of increasingly sophisticated fraud tactics.
Kuda Faces Workplace Discrimination Lawsuit
Kuda Technologies, a leading Nigerian digital bank, is facing a lawsuit in a UK Employment Tribunal over allegations of workplace discrimination, harassment, and unfair dismissal. The case was filed by Rosemary Hewat, the company’s former Group Chief People Officer (CPO), who accuses Kuda and its CEO, Babatunde Ogundeyi, of sex discrimination and victimisation. Hewat claims Kuda fostered a toxic work culture that sidelined female employees, contradicting its Diversity, Equity, and Inclusion (DEI) policies. She alleges that Ogundeyi publicly humiliated female staff during a company retreat in Lagos and that she was excluded from key strategic discussions. She also argues she was denied equitable stock options compared to male colleagues. With a full hearing set for October, Kuda has acknowledged the lawsuit but declined further comment. The case raises concerns about workplace leadership in Nigeria’s fintech sector, with potential reputational risks for the company as scrutiny over gender equality in tech intensifies.
NGX Performance
Mixed performance
The Nigerian Exchange Limited (NGX) saw a volatile February, with the All-Share Index (ASI) posting a year-to-date gain of 4.61% by month-end, despite mid-month fluctuations. Trading activity was inconsistent, with notable surges—such as a 72% jump in trading volume on February 27. Consumer goods stocks saw modest gains, while oil and gas stocks struggled, with the NGX Oil & Gas Index recording a year-to-date loss of 7.16%. Stocks like Oando, PZ Cussons, and Honeywell Flour Mill performed well, whereas Fidson Healthcare and Ecobank Transnational saw declines. Investor confidence wavered, with significant losses, including a ₦72.51 billion dip on February 24. Meanwhile, the Federal Government’s bond listings on the NGX influenced liquidity and sentiment.
Investment Opportunities
Federal Government of Nigeria (FGN) Savings Bonds: The Debt Management Office (DMO) offers monthly FGN Savings Bonds, which are low-risk investments with tenors typically ranging from 2 to 3 years. These bonds provide quarterly interest payments and are accessible to individual investors with a minimum subscription of ₦5,000. The February 2025 offer is open and will close by 5 pm on Thursday, March 6, 2025. Investors can subscribe digitally through authorised stockbroking firms.
FX Performance
Looks like stability is on the horizon
The Nigerian naira made a notable recovery in February 2025, appreciating against major currencies in both the official and parallel markets. By the end of the month, the naira strengthened to ₦1,540/$ in the parallel market, marking a 7.41% gain from ₦1,620/$. It also recorded gains of 4.50% against the British pound (₦1,910/£) and 6.34% against the euro (₦1,550/€). In the official market, the currency settled at ₦1,496/$, reflecting a narrowing gap between exchange rates as the Central Bank of Nigeria (CBN) continues efforts to unify and stabilize the forex market.
These gains were supported by several monetary interventions. The CBN’s February 2025 Monetary Policy Committee (MPC) meeting focused on strategies to align official and parallel market rates while stabilizing the exchange rate. Additionally, the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) contributed to a lower reported inflation rate, improving confidence in the naira.
Despite these positive movements, challenges persist. Nigeria’s foreign exchange reserves declined by $1.11 billion in January, falling to $39.77 billion, though they stabilized at $39.4 billion by mid-February, providing 9.6 months of import cover. The CBN introduced the Electronic FX Matching System and Nigeria FX Code to curb speculation and boost market stability.
While these policies helped strengthen the naira in February, analysts caution that the trend may be temporary. External factors such as global oil prices, dollar demand, and liquidity constraints could drive renewed depreciation in March. As a result, the coming months will be crucial in determining whether the naira can maintain its momentum or face fresh pressures in the foreign exchange market.
South African Rand experiences volatility.
In February 2025, the South African Rand (ZAR) experienced a slight depreciation against the US Dollar (USD). At the beginning of the month, the exchange rate was approximately 18.4 ZAR per USD. By February 28, the rand had weakened to around 18.52 ZAR per USD, reflecting a depreciation of about 0.65% over the month. Both global and domestic factors influenced this depreciation. Globally, uncertainties surrounding U.S. economic policies contributed to a stronger USD, exerting downward pressure on emerging market currencies like the rand. Domestically, challenges such as political tensions within the Government of National Unity and disagreements over budget proposals added to the rand’s volatility. Despite these challenges, the rand demonstrated resilience, with fluctuations remaining relatively contained throughout the month. The currency’s performance reflects a complex interplay of external and internal factors influencing investor sentiment and market dynamics.
Company Focus – Keystone Bank
Shocking the AI environment and the US stock market
Keystone
Keystone Bank Limited is a full-service commercial bank in Nigeria. Acquired from AMCON in 2017 by the Sigma Golf River Bank Consortium, it operates over 150 branches and international subsidiaries, offering financial services to corporations, SMEs, and individuals. Its KeyServ platform enhances financial inclusion through agency banking. In January 2024, the CBN dissolved Keystone Bank’s board and management over governance breaches, appointing new leadership. The bank has recently been in the spotlight due to regulatory actions.. In February 2025, a Lagos court ordered the forfeiture of its shares to the Federal Government over alleged irregularities in its acquisition. The CBN reassured the public that the bank remains “safe, sound, and fully operational,” with the transition expected to strengthen its financial position.
Africa Focus
Africa poised to be second-fastest growing region, after Asia.
AfDB launches Macroeconomic outlook
The African Development Bank (AfDB) released its 2025 Macroeconomic Performance and Outlook (MEO) report on February 14, 2025, during the 38th African Union Summit. The report highlights Africa’s economic trajectory, opportunities, and risks. Africa’s real GDP is projected to grow from 3.2% in 2024 to 4.1% in 2025 and 4.4% in 2026, making it the world’s second-fastest-growing region after Asia. However, this remains below the 7% threshold needed for significant job creation and poverty reduction. The report identifies 24 African countries, including Djibouti, Niger, Rwanda, Senegal, and South Sudan, as expected to exceed 5% GDP growth in 2025. Despite this growth, Africa faces inflation, currency depreciation, rising debt, and widening fiscal deficits. Inflation is projected to decline from 18.6% in 2024 to 12.6% in 2025-2026 due to tighter monetary policies. The report calls for better coordination of monetary and fiscal policies, debt sustainability measures, revenue mobilisation, and increased infrastructure and natural capital investment to address these issues. It also emphasises the importance of regional integration and decisive policy actions to sustain economic recovery and mitigate risks. The MEO report underscores Africa’s resilience but stresses the need for bold policy reforms to ensure long-term economic stability and inclusive growth.
Upcoming events in March
- Africa Financial Inclusion Summit 2025
27-28 March, 2025
Johannesburg, South Africa
