April 2025

Economy Overview in April

Global Highlights

Global macroeconomic stability remained fragile in the month of April, as the International Monetary Fund (IMF) downgraded its 2025–2026 growth outlook following escalating trade tensions, weaker investor sentiment, and currency pressures.

Market volatility intensified following U.S. tariffs on China and retaliatory measures from Beijing. However, sentiment improved slightly after the U.S. announced a 90-day suspension on further tariffs and hinted at renegotiating trade terms.

U.S. Inflation

Headline inflation in the United State of America eased to 2.4% in March (from 2.8% in February), while core inflation declined to 2.8%—its lowest since March 2021—driven by lower energy costs. While this reinforces expectations of a moderating inflation path, the figure still exceeds the Federal Reserve’s 2% target which leaves room for continued monetary policy caution.

Local Highlights

Domestic Inflation
Nigeria’s inflation surged to 24.23% year-on-year in March, reversing the prior disinflationary trend at 23.18% in February. Month-on-month inflation nearly doubled to 3.90%, reflecting rising pressures in food and core components like energy prices, housing and key basic amenities. Core inflation climbed to 24.43% year-on-year, signaling persistent structural pressures. The Central Bank of Nigeria (CBN) may face mounting pressure to tighten key policy rates to curb inflation and sustain macroeconomic stability.

Oil & External Sector

Brent crude prices fell to $63.09 per barrel in April as against $73.54 per barrel in March, weighed down by renewed trade frictions and rising global supply expectations. Looking ahead, potential increases in OPEC+ output and crude exports from Iran and Ukraine could amplify supply surpluses amid trade-driven demand weakness, posing downside risks to external reserves and fiscal buffers.

The Nigerian Capital Market

The Nigerian Stock Market (NGX)

The Nigerian Exchange (NGX) All-Share Index (ASI) closed April at 105,800.85 points, up by 0.36% month-on-month, bringing the year-to-date return to 2.79%. Market capitalization rose marginally to ₦66.50 trillion from ₦66.25 trillion in March, supported by resilient corporate earnings and a relatively stable policy environment.

Sectoral performance was mixed with the Banking Index rising by 0.22%; Consumer Goods Index declined by 0.45%; while Industrial Goods Index was flat. Oil & Gas and Insurance indices posted modest gains of 0.15% and 0.10%, respectively.

The Fixed Income Market

In the Fixed income market, sentiment turned slightly bearish. The average yield closed at 18.69%, up from 18.46% in March, with investors’ activities concentrated along the mid to long tenor segment.

At the April bond auction, the Debt Management Office (DMO) raised ₦397.89 billion, with the 19.30% FGN APRIL 2029 and 19.89% FGN FEBRUARY 2033 bonds clearing at 19.00% and 19.99%, respectively. Post-auction demand spurred renewed activities in the secondary market, driving yields marginally lower.

In the Nigerian Treasury Bill space, ₦714.37 billion was allotted across tenors at stop rates of 18.00% (91-day), 18.50% (182-day), and 19.60% (364-day).

Our Position

We expect the NGX to maintain a cautious upward trend, supported by continued corporate earnings growth. However, global market volatility and rising inflation pose risks to investor sentiment. For fixed income, yield direction may be mixed to bearish in May, driven by anticipated monetary tightening to rein in inflation while preserving real returns to retain foreign portfolio interest amid global risk aversion.

Securities Recommendations: