Welcome to the March 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!
Nigeria Macroeconomic Recap
Collaboration across the board, both internally and internationally, is increasing.
Dangote suspends Naira petrol sales: Dangote refinery has temporarily halted gasoline sales in naira to prevent losses resulting from a mismatch between selling products locally and buying crude internationally. The refinery noted that the value of its petroleum products sold in naira exceeds the worth of naira-denominated crude received from the Nigerian National Petroleum Company (NNPC). While it plans to resume naira sales once it receives more naira-denominated crude, the facility continues to heavily rely on local feedstock, receiving over 10 million barrels of Nigerian crude last month. To boost processing rates, the refinery is also importing crude from international markets, including over three million barrels of American crude in March, Angola’s Pazflor grade, and Algeria’s Saharan Blend from Glencore Plc. With an estimated processing rate averaging 380,000 barrels per day over January and February, the refinery’s current operations are gradually ramping up towards its full capacity of 650,000 barrels per day, which would make it the largest oil refinery in Africa. The Nigerian government is in talks with Dangote to extend a contract allowing the refinery to buy crude in naira, which started in October, with 48 million barrels supplied by the NNPC since then.
Political rivalry threatens Nigeria’s crude oil production: Political rivalry is driving oil-pipeline attacks that threaten Nigeria’s oil production recovery. After a series of pipeline vandalism incidents in Rivers state, President Bola Tinubu declared a state of emergency, suspending the governor, his deputy, and local lawmakers. The conflict involves Rivers state Governor Siminalayi Fubara of the opposition Peoples Democratic Party (PDP) and his predecessor Nyesom Wike, now a minister and key Tinubu ally. The dispute began after the 2023 elections and has escalated to ethnic and political tensions. When state lawmakers loyal to Wike moved to impeach Fubara, his supporters warned of retaliatory pipeline sabotage. Opposition parties have criticized Tinubu’s action as unconstitutional and biased since Wike and his allies have not been reprimanded. The crisis raises fears of a return to the early 2000s when militant attacks nearly crippled oil production until a costly 2007 amnesty restored peace. The instability endangers Nigeria’s oil production target of at least 2.06 million barrels per day and threatens vital revenue projections, undermining the country’s recent progress in meeting its OPEC+ quota for the first time in three years.
NNPC revisits with IPO plans: The Nigerian National Petroleum Company Ltd. (NNPC), is seeking advisers and investment bank partners to prepare for a long-delayed initial public offering (IPO). The company is in the “final stage” of obtaining a listing, but no timeline was given. The IPO was postponed multiple times since it was first proposed nearly a decade ago. It was last considered four years ago after NNPC reported a profit for the first time in 44 years. Legislation signed by former President Muhammadu Buhari in 2021 permits the company to sell shares to the public. NNPC plans to draw on the experience of Saudi Aramco, which raised $25.6 billion in a record-breaking IPO in 2019.
Nigeria’s inflation cools again: Nigeria’s annual inflation rate fell for the second consecutive month, easing to 23.2% in February from 24.5% in January. Food inflation also declined to 23.5% from 26.1%, while core inflation rose slightly to 23% from 22.6%. The cooling trend has raised hopes that inflation may have peaked, potentially leading the Central Bank of Nigeria (CBN) to maintain its interest rate at 27.5% during its May meeting. Bloomberg Economics predicts that inflation could drop below 20% by the end of 2025 as energy prices moderate. The National Bureau of Statistics recently updated its consumer price index for the first time in 16 years, reducing the weighting of food and non-alcoholic beverages from 51.8% to 40% to better reflect current inflation dynamics. Month-on-month inflation in February was reported at 2%.
Nigerian lawmakers reject tax hikes: Nigerian lawmakers have rejected President Bola Tinubu’s proposals to double the value-added tax (VAT) rate to 15% over six years and lower the company tax rate from 30% to 25% by next year. The VAT increase was intended to boost government revenue and change how funds are distributed among Nigeria’s 36 states, but faced strong opposition from powerful state governors. Although the proposed tax changes were not part of this year’s budget, they could have impacted future revenue plans. Lawmakers have agreed to some reforms aimed at simplifying Nigeria’s outdated tax regime, but these still require parliamentary approval before being sent to the president. Additional amendments under consideration include exempting minimum-wage earners from income tax and providing rent relief of up to 500,000 naira ($460) to ease housing costs
Finance Flashback
Government and banks desperately seek cash while investors trust wane.
Nigerian government explores ₦1 trillion mortgage fund: Nigeria plans to establish a ₦1 trillion ($654 million) fund to provide affordable mortgages, addressing a housing deficit of about 28 million homes. The first phase involves a 40-year loan of 250 billion naira from the World Bank’s International Development Association (IDA) at a 1% interest rate, matched by contributions from local pension funds, banks, and insurance firms. With mortgages accounting for less than 1% of Nigeria’s economy and most real estate transactions done in cash, the fund aims to offer low-interest mortgages (“single-digit and low double-digit rates”) to Nigerians. The initiative is expected to drive a construction boom by encouraging developers to build more houses. Separately, the government plans to award contracts to private investors to build and manage 40 roads spanning 5,000 kilometers. Africa Finance Corp. is among the investors involved in this infrastructure initiative.
Commercial banks turn to CPs as CBN stifles cash flow: Nigerian banks increasingly issue short-term commercial papers (CPs) to address liquidity challenges exacerbated by stringent central bank policies. The Central Bank of Nigeria (CBN) has raised the cash reserve ratio (CRR) to 50%, requiring banks to hold half their deposits with the central bank, effectively doubling the cost of attracting customer deposits. For instance, a deposit obtained at an 18% interest rate now has an effective cost of 36% due to these CRR constraints. Several banks have turned to CPs as a more cost-effective funding alternative to manage these financial pressures. These CP issuances highlight the banks’ efforts to navigate the liquidity constraints imposed by the CBN’s policies. By opting for CPs over traditional deposit methods, banks can access necessary funds without incurring the higher costs associated with increased CRR requirements. This strategy reflects a broader trend in the Nigerian banking sector, where institutions are seeking innovative solutions to maintain financial stability amid challenging economic conditions.
Investors’ trust wane due to falling oil prices: Nigerian dollar bonds dropped sharply due to investor concerns that falling oil prices could undermine government revenue projections. The 2051 dollar bond, the nation’s longest-maturity debt, declined by 1.45 cents to 81.727 cents, its biggest drop since November 18. The 2047 bond also fell by 1.12 cents to 77.955, the largest decline since January 10. The drop in bond prices is linked to declining Brent crude prices, which hit a six-month low amid global market instability caused by President Donald Trump’s trade policies and an unexpected OPEC+ production hike. Brent crude traded at around $69 per barrel, below Nigeria’s 2025 budget target of $75 per barrel. The Nigerian government is relying on higher oil revenue to fund its record 54.99 trillion naira ($36 billion) budget, targeting oil production of 2.06 million barrels per day to generate at least 19.6 trillion naira. Oil earnings, which make up over 80% of Nigeria’s foreign exchange income, are critical for revenue and naira stability.
NGX Performance
Mixed performance
Nigerian equities declined in March 2025, with the NGX All-Share Index (ASI) dropping around 2–3% for the month. This pullback followed strong gains earlier in the year and was driven by profit-taking, weak corporate earnings, and disappointing dividend announcements from major firms like Transcorp (-17.7%), Access Holdings (-6.8%), and MTN Nigeria (-3.2%). Despite the downturn, some stocks performed well, including Tantalizer Plc, Union Homes REIT, and Julius Berger, which rallied due to company-specific news and optimism over government spending. Market breadth was mostly negative, with more stocks declining than gaining. The market correction also coincided with slightly declining government bond yields, but some investors still locked in gains from earlier stock rallies. While local institutional investors dominated trading, foreign inflows began to pick up due to attractive valuations.Analysts see the correction as healthy, with potential for a rebound in Q2 2025 if economic policies, inflation, and interest rates stabilize, and new IPOs boost market activity.
Investment Opportunities
Banks commercial papers:
- Stanbic IBTC Holdings Ltd.: Issued N50 billion in CPs with a 9-month tenure, offering a yield of 19.68%.
- FSDH Merchant Bank Ltd.: Issued N20 billion in CPs with two tenures: 90 days at a yield of 20.868% and 151 days at 20.793%.
April 2025 FGN Savings Bond: The DMO opened subscription for the April 2025 FGN Savings Bond issue in the last week of March. These savings bonds (targeted at retail investors) come in 2-year and 3-year maturities, with interest paid quarterly. The March/April issue offered around 10.1% (2-yr) and 11.1% (3-yr) per annum tax-free rates, according to market sources. The FGN Savings Bond April 2025 offer closes by April 7, 2025 – interested retail investors can subscribe in minimum ₦5,000 units via stockbrokers.
FX Performance
Naira’s rocky March
Naira’s Volatile March: The Nigerian naira experienced a rollercoaster in March. After starting the month around ₦1,500 per US$1, the naira briefly appreciated in the first week – reaching its strongest level of ~₦1,498/$ on March 4-5 – amid improved FX supply and positive market sentiment. However, mid-March brought a sudden sell-off in the naira, triggered by a surge in dollar demand following large government payments to contractors. Bureau-de-change operators reported an “unprecedented attack” on the naira around March 13th, causing the currency to plunge by ~₦70 in a single day (from ~₦1,503/$ to lows around ₦1,575/$). This volatility was attributed to a one-off liquidity injection (contractor payouts) and speculative trading. In response, the CBN and authorized dealers ramped up interventions, and by late March the market calmed. The naira rebounded from its trough, stabilizing in the ₦1,530–₦1,540 per dollar range through month-end. It closed the official trading session of March 27 at ₦1,538/$, only about 2.5% weaker than where it began the month.
The parallel market mirrored these moves: black-market rates reached as high as ₦1,580–₦1,590 during the worst turbulence, then converged back near ₦1,550 by month’s end, leaving only a marginal gap between the unofficial and official rates. The key drivers of naira movements in March were the fluctuating FX supply from the CBN, market speculation, and developments in Nigeria’s oil sector. A notable factor was the temporary halt of the “Naira-for-fuel” deal with the new Dangote Refinery – the government’s arrangement to pay for domestic refined fuel in naira hit a snag due to crude supply issues. When Dangote’s refinery stopped accepting naira payments and sought dollars for feedstock, it added pressure on FX reserves and importers, stoking depreciation fears. By month’s end, authorities indicated the crude-for-naira swap would resume, which helped bolster confidence that the naira’s slide would be contained. Overall, the currency’s March journey underscored Nigeria’s delicate FX balance: policy consistency and adequate dollar supply remain crucial to maintaining stability.
South African Rand
One of Africa’s most-watched currencies, the South African rand (ZAR), made headlines in March for its surprising strength. The rand rallied to around R18.1 per US$ by mid-month, its firmest level in over a year. Year-to-date, the rand was up about 4% against the dollar, breaking an eight-year streak of depreciation to become one of the top-performing emerging-market currencies. This was attributed to elevated gold prices (boosting South Africa’s terms of trade). Additionally, the South African Reserve Bank held interest rates steady in March (after a series of hikes in 2024) with inflation easing to around 5%, which kept South Africa’s real yields attractive. By late March, the rand traded near R18.12/$, approximately 0.5% stronger than a week prior. Traders warned, however, that the rand remains volatile – looming U.S. tariff decisions and South Africa’s own fiscal woes (a high debt and a contentious budget) could swing the currency. Indeed, the rand saw quick swings around month-end on headlines about possible tariff reciprocation. Still, for March as a whole, the rand’s resilience stood out among African currencies.
Company Focus – MRS Oil
Shocking the AI environment and the US stock market
MRS Oil Nigeria Plc is a prominent oil marketing company in Nigeria, known for its involvement in the distribution of petroleum products. The company has been in the news recently for several reasons, including its financial performance and market activities. In March 2025, MRS Oil was in the news primarily due to its financial performance and its impact on the stock market. MRS Oil reported a significant increase in revenue for the year 2024, with a 71.2% rise to N312.2 billion. This growth was driven by higher petroleum product prices throughout the year, despite a decline in sales volumes. The company also reported a pre-tax profit of N9.8 billion, marking a 66% year-on-year increase. Despite its strong financial performance, MRS Oil’s stock price depreciated by 8.99% in mid-March 2025, contributing to a broader decline in the Nigerian Exchange Limited (NGX) market capitalization. This decline was part of a larger market downturn affecting several major stocks.
Africa Focus
Africa’s making a turnaround, with a cavaet
ECA Economic Report – Growth Rebound with Caveats: The UN Economic Commission for Africa (ECA) projects Africa’s GDP growth to rise from 3.5% in 2024 to 3.8% in 2025 and 4.1% in 2026, driven by higher private consumption, easing inflation, and improved trade, including gains from the African Continental Free Trade Area (AfCFTA). However, growth remains below pre-pandemic levels, and challenges persist, including global economic tensions, internal conflicts, and climate-related disasters, which affected 110 million Africans and caused over $8.5 billion in losses in 2022. Debt-to-GDP ratios are expected to improve from 67.3% in 2023 to 62.1% by 2025, partly due to economic growth and debt restructuring, but high debt levels and costly borrowing remain concerns. The ECA and African Union are urging reforms to the global financial system, including concessional financing and climate-finance facilities, to reduce borrowing costs and boost economic resilience.
Disinflation and Monetary Policy Shift: A positive trend across multiple African economies in March was easing inflation and a pivot in monetary policy. After the inflation spike of 2022–2023 (when many African nations saw double-digit inflation), price growth started to moderate in late 2024 and into 2025. For example, Ghana’s inflation, which was over 50% in 2022, has been on a downward path (though still hovering above target in the 20–30% range) allowing the Bank of Ghana to pause rate hikes. In Kenya, inflation fell to 3.5% by February, comfortably within the central bank’s band– a result of good harvests and tighter monetary policy earlier. Nigeria, as noted, saw inflation drop to ~23% from 31% a year prior after rebasing. Consequently, central banks in Ghana and Kenya held their benchmark rates steady in their late March/early April meetings, signaling a shift from tightening to an easing bias. A Reuters poll in March indicated that multiple African central banks are likely to cut rates later in 2025 as inflation retreats – with analysts expecting Ghana to trim 100 bps in May and Kenya to begin cutting by mid-year. This marks a notable change from the aggressive rate hikes of the past two years. Lower interest rates should help spur borrowing and investment, supporting growth. However, policymakers are cautious not to ease too quickly given lingering vulnerabilities (e.g. Ghana’s cedi saw some pressure in Q1, partly why the BoG waited). In East Africa, countries like Uganda and Tanzania also kept rates unchanged, balancing growth needs against external risks. Overall, the monetary policy stance across Africa is tilting dovish for the first time since 2020, reflecting better inflation news – a trend that bodes well for businesses and consumers, though central bankers remain vigilant about commodity price swings or currency shocks that could reignite inflation.
Upcoming events in March
- WCF Africa Summit 2025: Africa’s Global Future
April 9-10, 2025
Nairobi, Kenya - GITEX AFRICA
April 14-16, 2025
Marrakech, Morocco - GTR West Africa 2025 Lagos
April 24-25, 2025
Lagos, Nigeria - West African Sustainability Afternoon Seminar
April 29, 2025
Lagos, Nigeria - Finnovex North Africa
April 23, 2025
Cairo, Egypt - Africa Fintech Summit
April 24, 2025
Washington, D.C., USA - Second Finance and Central Bank Ministerial Meeting
April 23-24, 2025
