The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 303rd meeting on November 24 and 25, 2025. The Committee reviewed key developments in the global and domestic economies, including the risks to the outlook. All twelve (12) members of the Committee were in attendance.

Decision of the MPC

The Committee decided, by a majority vote, to maintain the current monetary policy stance with an adjustment to the corridor as follows:

Retain the Monetary Policy Rate (MPR) at 27.0 per cent.

Adjust the Standing Facility corridor around the MPR to +50 / -450 basis points.

Retain the Cash Reserve Requirement (CRR) as follows:

Deposit Money Banks: 45.00%

Merchant Banks: 16.00%

Non-TSA public sector deposits: 75.00%

Keep the Liquidity Ratio unchanged at 30.00 per cent.

The Committee’s decision was underpinned by the need to sustain progress made so far toward achieving low and stable inflation. The MPC reaffirmed its commitment to a data-driven assessment of developments and outlook to guide future policy decisions.

MONETARY POLICY COMMUNIQUÉ NO. 160
Considerations

The Committee welcomed the continued deceleration in headline inflation (year-on-year) in October 2025, marking the 7th consecutive month of decline. This favourable development resulted from several factors, including sustained monetary policy tightening, stable exchange rate, increased capital inflows, and surplus current account balance. Relative stability in the price of Premium Motor Spirit (PMS) and improved food supply also supported the pace of disinflation. However, headline inflation remains high at double digits, requiring sustained efforts to moderate it further.

The Committee noted that the steady deceleration across headline, core, and food inflation in October 2025 suggests that the lagged impact of earlier tightening measures will continue in the near term. Thus, maintaining the current stance amidst global uncertainties would allow previous policy rate hikes to fully transmit to the real economy and help reduce prices.

Members highlighted the strong performance of the external sector, evidenced by the surplus current account balance and steady accretion to external reserves, which have supported exchange rate stability and moderated inflation. The MPC also commended the collaboration between fiscal and monetary authorities, which contributed to the recent upgrade of Nigeria’s sovereign credit rating by major rating agencies and the delisting from the FATF grey list. These improvements are expected to boost investor confidence and enhance capital flows.

The Committee noted the sustained resilience of the banking system, with most financial soundness indicators within regulatory thresholds. Members acknowledged substantial progress in the ongoing recapitalization programme, with sixteen (16) banks now fully compliant with revised capital requirements. The Committee urged the Bank to ensure successful implementation and conclusion of the programme.

Price and Other Domestic Developments

Headline inflation (year-on-year) declined to 16.05% in October 2025 from 18.02% in September, driven by moderations in both food and core inflation.

Food inflation fell sharply to 13.12% in October 2025 from 16.87% in September, supported by improved domestic food supply, stable exchange rate, and base effects.

Core inflation declined to 18.69% in October 2025 from 19.53% in September, largely due to a decrease in the cost of furnishing and household maintenance.

Real Gross Domestic Product (GDP) growth remained positive, with 4.23% year-on-year growth in Q2 2025, compared with 3.13% in Q1 2025. The Purchasing Manager’s Index (PMI) rose significantly to 56.4 points in November 2025—the highest in five years—indicating improved growth prospects for Q3 and Q4 2025.

Gross external reserves increased by 9.19%, rising to US$46.70 billion as of November 14, 2025, from US$42.77 billion at end-September 2025, providing 10.3 months of import cover.

Global Developments

Global output is projected to recover in the near to medium term, supported by improved trade negotiations, accommodative monetary policy in Advanced Economies, and easing geopolitical tensions. However, risks remain, including rising protectionism, geoeconomic fragmentation, and potential renewed trade tensions between the United States and major trading partners.

Global inflation is expected to continue its downward trajectory through 2026 due to past monetary tightening, improved supply chains, and softening commodity prices, though it is projected to remain above pre-pandemic levels.

Outlook

The MPC forecasts sustained disinflation in the near term, driven by the lagged impact of previous monetary tightening and continued stability in the foreign exchange market. Ongoing seasonal harvests are expected to boost local food supply and further moderate food prices.

The Committee reaffirmed its commitment to an evidence-based policy approach to achieve price and financial system stability.

The Central Bank of Nigeria (CBN) will, on Wednesday, October 22, 2025, conduct its Treasury Bills (T-Bills) Primary Market Auction (PMA), where a total of N650 billion worth of maturing bills will be rolled over.

The maturing bills, being reissued on behalf of the Debt Management Office (DMO), will be offered across three maturities:

N100 billion for the 91-day tenor,

N100 billion for the 182-day paper, and

N450 billion for the 364-day instrument.

This reissuance forms part of the government’s regular short-term borrowing programme aimed at managing liquidity in the financial system.

Bidding Guidelines and Participation Rules

According to the CBN, the sale will be conducted via a Dutch auction—a competitive bidding process in which investors submit their preferred interest rates, and the final stop rate is determined by overall demand and market dynamics.

By rolling over maturing bills, the government is not raising new debt, but rather refinancing existing obligations.

The CBN further stated that authorized Money Market Dealers are to submit bids electronically through the CBN S4 Web Interface between 8:00 a.m. and 11:00 a.m. on Wednesday, October 22, 2025.

Each bid must:

Be in multiples of ₦1,000, and

Have a minimum investment of ₦50,001,000.

Dealers are permitted to place bids on behalf of non-dealer clients—including corporates, fund managers, and interested members of the public—thereby offering indirect access to retail investors seeking low-risk instruments.

The apex bank also clarified that dealers may submit multiple bids at different rates, allowing greater flexibility in investment choices.

Auction results will be announced on Wednesday, October 22, a day before settlement.
Successful bidders will receive allotment letters on Thursday, October 23, and must make payment for allotted amounts into their CBN accounts no later than 11:00 a.m. that same day.

The CBN reserves the right to reject or adjust bids based on prevailing market conditions.

Market Outlook and Economic Implications

Analysts expect the October auction to attract strong demand, particularly for the 364-day bills, which traditionally offer higher yields due to their longer duration.

The CBN’s decision to roll over rather than expand the issuance size reflects a cautious approach to liquidity management. By maintaining the N650 billion offer size, the Bank seeks to avoid excessive money supply that could worsen inflationary pressures, while still meeting short-term government financing needs.

Market watchers will closely monitor the stop rates—the final accepted interest rates for each tenor—as indicators of investor sentiment and the direction of short-term yields.

Given current market dynamics, analysts anticipate moderate downward adjustments in yields to reflect easing monetary policy and declining inflationary pressures.

Balancing Liquidity and Stability

The October 22 auction highlights the CBN’s continued reliance on Treasury Bills as a critical tool for liquidity control and fiscal support.

For investors, the exercise provides another opportunity to lock in steady, low-risk returns amid ongoing inflation and currency volatility.

As the auction date approaches, attention will center on the level of investor demand and the final stop rates at which the market clears.

Key Takeaways

Offer Breakdown: ₦100 billion (91-day), ₦100 billion (182-day), ₦450 billion (364-day).

Previous Stop Rates: 15.00% (91-day), 15.25% (182-day), 15.77% (364-day).

Significance: Auction outcome will help guide short-term interest rates and market sentiment into Q4 2025.

The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has reduced the Monetary Policy Rate (MPR) by 50 basis points, lowering it from 27.5 percent to 27 percent.

The decision was announced by CBN Governor, Olayemi Cardoso, during the post-MPC press briefing on Tuesday, following the Committee’s 302nd meeting in Abuja.

Alongside the MPR cut, the MPC narrowed the asymmetric corridor around the benchmark rate to +250 and -250 basis points, from the previous +500/-100 basis points.

This adjustment, according to the CBN, is intended to strengthen liquidity management and provide clearer signals to the financial markets.

Cardoso explained that the adjustment reflects the Committee’s cautious attempt to ease monetary conditions in response to signs of moderating inflation and improving macroeconomic fundamentals.

Other Policy Decisions

Cash Reserve Ratio (CRR): Retained at 45 percent for commercial banks; set at 16 percent for merchant banks.

Liquidity Ratio: Maintained at 30 percent.

The CBN said these measures were carefully balanced to sustain ongoing disinflation efforts while ensuring the banking sector has adequate liquidity to support credit expansion and economic growth.

Basis for CBN’s Decision
The MPC’s decisions come against the backdrop of fresh data from the National Bureau of Statistics (NBS), which showed that Nigeria’s inflation rate eased to 20.12 percent in August 2025, down from 21.88 percent in July.

Cardoso noted that while inflation remains elevated, recent declines suggest that previous rounds of monetary tightening are beginning to yield results. He stressed that the new measures would consolidate these gains without stifling economic growth.

According to the NBS, Nigeria’s economy grew by 4.23 percent in real terms in the second quarter of 2025, driven by strong performance in both oil and non-oil sectors. External reserves have also climbed close to $42 billion, providing additional buffers for monetary stability.

Analysts’ Reactions
Analysts have called on the CBN to adopt more flexible monetary policies that will stimulate credit flow into the economy, especially for small and medium enterprises (SMEs) and critical sectors.

Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), in a statement, urged the CBN to “calibrate CRR and MPR downward as inflation moderates to create a more enabling credit environment. Complement monetary tightening with supply-side measures to address structural inflation drivers.”

He stressed that while the CBN’s tight monetary posture aims to curb inflation, it has inadvertently limited access to affordable credit for businesses and households.

FG Allots N3.05 Billion in September 2025 FGN Savings Bonds

The Federal Government, through the Debt Management Office (DMO), has announced the successful allotment of the September 2025 FGN Savings Bonds, totaling N3.05 billion across the two-year and three-year tenors.

According to data published on the DMO’s website, the bonds opened for subscription on Monday, September 1, 2025, and closed on Friday, September 5, 2025, with settlement scheduled for September 10, 2025.

Coupon Payments

The DMO stated that coupon (interest) payments will be made quarterly—March 10, June 10, September 10, and December 10— directly to investors.

Allotments

Two-Year FGN Savings Bond (Due September 2027):

Interest rate: 15.541% per annum

Amount raised: N631.762 million

Subscriptions: 793 successful investors

Three-Year FGN Savings Bond (Due September 2028):

Interest rate: 16.541% per annum

Amount raised: N2.416 billion

Subscriptions: 1,246 successful investors

Comparison with August 2025 Auction

The September allotment was lower than the N3.3 billion recorded in August 2025.

In August, the government raised N573.31 million from the 2-year bond (maturing August 2027) and N2.74 billion from the 3-year bond (due August 2028).

The auction attracted 2,166 successful investors (892 for the 2-year and 1,274 for the 3-year).

Coupon rates stood at 14.401% for the 2-year bond and 15.401% for the 3-year bond.

Key Information for Investors

Bonds were issued at N1,000 per unit, with a minimum subscription of N5,000 and multiples of N1,000 thereafter, up to a maximum of N50 million.

Introduced in 2017, the FGN Savings Bond programme was designed to:

Deepen the domestic bond market.

Promote financial inclusion.

Provide retail investors access to secure, low-risk government securities.

Regulatory Recognition

The FGN Savings Bond:

Qualifies as an approved investment under the Trustee Investment Act.

Is recognized as a government security under CITA and PITA, making it eligible for tax exemption by pension funds and other institutional investors.

Is listed on the Nigerian Exchange Limited (NGX), allowing secondary market trading and enhancing liquidity.

Qualifies as a liquid asset for banks’ liquidity ratio calculations.

Over the years, the FGN Savings Bond has gained popularity among Nigerians seeking safe and predictable investment opportunities.

Executive Summary

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) meets again on September 22–23, 2025. With inflation easing for four consecutive months, reserves at a 44-month high, exchange rates stabilizing, and credit to the private sector softening under tight financial conditions, the case for a calibrated rate cut is compelling. A 100 basis point reduction in the Monetary Policy Rate (MPR) from 27.50% to 26.50%, would balance the objectives of supporting growth, preserving disinflation momentum, and maintaining investor confidence.

This paper argues that the MPC has entered a window of opportunity to begin a cautious policy pivot. Nigeria’s macroeconomic landscape has shifted in meaningful ways: inflation pressures are moderating, the exchange rate is more stable, and foreign reserves are stronger. At the same time, domestic credit conditions are tightening to the point of constraining businesses. A measured rate cut would therefore be both timely and justified.

1.  Disinflation Is Gaining Traction

1.1  Headline Inflation Trend

Nigeria’s headline inflation has steadily declined:

• April 2025: 97%

• May 2025: 41%

• June 2025: 22%

• July 2025: 88% (fourth consecutive monthly decline)

This disinflation trend is significant because it suggests that earlier policy tightening is working. Inflation has dropped by more than 11 percentage points year-on-year from 33.40% in July 2024. This is not a small achievement, it represents a rare period of consistent price moderation in Nigeria’s recent economic history.

1.2  Why This Matters

Disinflation is important because it provides breathing room for businesses and households. For companies, lower inflation means reduced costs for inputs, easier planning for budgets, and better predictability for investment decisions. For households, it means improved purchasing power, particularly for essential goods like food and energy. Sustained disinflation also strengthens consumer confidence, which in turn supports aggregate demand.

1.3  Real Interest Rate Dynamics

With MPR at 27.50%, the ex-post real policy rate is +5.6%, one of the highest among frontier and emerging markets. Real rates this high can suppress productive investment because borrowing becomes excessively expensive. Even after a 100 bps cut, Nigeria would maintain one of the tightest monetary stances in Africa, ensuring that inflation expectations remain anchored.

2.  External Buffers Are Stronger

2.1  Reserves at Multi-Year Highs

One of the major constraints on monetary easing in the past was the fragility of external buffers. That picture has changed dramatically in recent months:

• Foreign reserves have risen above $41 billion, the highest level in nearly four

• This rise has been supported by steady oil receipts, improved remittance inflows, and stronger capital inflows.

Higher reserves matter because they provide the CBN with ammunition to intervene in the FX market if pressures resurface. They also boost investor confidence, signaling that the country has the financial strength to manage external shocks.

2.2  Exchange Rate Stability

The naira has held steady in the official NFEM market around ₦1,526 – ₦1,533 per USD into early September, compared to periods of heightened volatility earlier in 2025. Exchange rate stability reduces the risk of imported inflation and creates a more predictable environment for businesses engaged in international trade.

2.3  Implications for Policy

These developments mean that the external position is sufficiently resilient to absorb a cautious easing of monetary policy. Cutting rates modestly will not necessarily weaken the naira or trigger destabilizing capital outflows, especially given the recent sovereign rating upgrade and positive investor sentiment.

3.  Domestic Activity and Credit Dynamics

3.1  Stronger Business Activity

Economic activity is showing signs of revival. The August private-sector Purchasing Managers’ Index (PMI) crossed 54, with new orders at a 19-month high. This is a leading indicator of economic expansion.

What is the PMI?

The PMI is a survey-based economic indicator that captures the health of the business environment. It asks purchasing managers about new orders, output, employment, supplier delivery times, and inventories. A PMI reading:

• Above 50 → signals expansion in business

• Below 50 → signals

Nigeria’s PMI has been consistently above 50 since April 2025, showing that businesses are expanding. The upward trend — from 50.5 in April to 54.2 in August — suggests growing confidence in demand and a strengthening recovery.

Why the PMI Matters

PMI is widely regarded as a leading indicator. It provides an early glimpse into how the economy is performing before official GDP data becomes available. Policymakers and investors track it closely because it reflects real-time business sentiment.

In Nigeria’s case, the recent PMI readings suggest:

• Improving domestic demand, as firms report stronger new

• Rising employment potential, as businesses prepare to expand

• Confidence in price stability, as inflation pressures ease, allowing firms to plan

3.2  Tight Credit Conditions

Despite stronger PMI readings, the credit environment remains tight:

• Bank lending to the private sector has softened in recent

• High nominal interest rates and elevated cash reserve requirements (CRR at 50%) have constrained banks’ ability to extend credit.

• Many SMEs face prohibitively high borrowing costs, which stifles expansion and job

A 100 bps reduction in the MPR would not completely solve this problem, but it would help ease conditions. It would also send a clear signal to lenders that monetary policy is beginning to normalize in response to improved fundamentals.

4.  Policy Continuity and Market Confidence

4.1  MPC Forward Guidance

The July MPC decision to hold the MPR at 27.50% was framed as conditional on evidence of sustained disinflation. That condition has now been met with the July CPI print, giving the MPC room to adjust policy.

4.2  External Validation

The credibility of Nigeria’s macroeconomic framework has been reinforced by external validation:

• Moody’s upgraded Nigeria’s sovereign rating to B3 in May 2025, citing improved fiscal discipline and stronger external balance.

• International market participants are increasingly acknowledging Nigeria’s improved reserve position and FX market management.

4.3  Investor Sentiment

Global investors typically interpret a measured rate cut in the context of strong fundamentals as a sign of confidence rather than weakness. By communicating clearly that easing is

conditional and reversible, the MPC can reassure investors while supporting domestic growth.

5.  Risks and Mitigation

5.1  Food Inflation Pressures

Food inflation remains vulnerable to supply shocks, insecurity, and weather patterns. However, these are largely structural rather than monetary in nature. Monetary tightening alone cannot resolve these issues. Instead, targeted government policies on agriculture and security are required. The CBN can manage short-term liquidity risks through Open Market Operations and by maintaining a high CRR.

5.2  Global Risks

Global risks such as dollar strength, shifting oil prices, or tightening by the U.S. Federal Reserve may put pressure on emerging market currencies. In such a scenario, the CBN’s asymmetric corridor (+500/-100 bps) and other liquidity tools provide room for quick corrective action.

5.3  Communication Strategy

A critical part of risk management is communication. The CBN must emphasize that any easing will be data-dependent. Should inflationary or FX pressures re-emerge, the MPC retains the tools and willingness to reverse course.

6.  Why a 100 bps Cut — and Not More or Less?

A 100 basis point cut strikes the right balance for several reasons:

• Cutting less (e.g., 25–50 bps) may not meaningfully ease credit conditions or send a strong enough signal of policy recalibration.

• Cutting more (e.g., 200 bps) could risk being interpreted as premature or overly aggressive, especially given residual risks around food inflation and global financial

At 26.50%, Nigeria’s policy rate would remain one of the highest in Africa, firmly positive in real terms, and still restrictive enough to sustain disinflation.

7.  Broader Implications for the Economy

7.1  Support for SMEs and Manufacturing

Small and medium enterprises (SMEs) are the backbone of Nigeria’s economy, contributing significantly to employment. By modestly reducing borrowing costs, the CBN would help SMEs secure working capital loans, expand operations, and create jobs.

7.2  Improved Consumer Sentiment

Lower inflation combined with slightly lower interest rates will support consumer spending. When households feel more confident about prices and job stability, they are more likely to spend, further driving economic recovery.

7.3  Fiscal-Monetary Coordination

A rate cut would also align with ongoing fiscal efforts to stimulate growth through infrastructure spending and targeted subsidies. This coordination between monetary and fiscal policy strengthens the overall policy mix.

Conclusion: A Case for a Measured Cut

A 100 bps rate cut to 26.50% strikes the right balance. It preserves Nigeria’s positive real rates, acknowledges progress on inflation and FX stability, and provides targeted relief to businesses struggling under high borrowing costs. By pairing this move with continued tight liquidity management, the CBN can reinforce its credibility while supporting sustainable growth.

The September MPC meeting presents a timely opportunity for the Central Bank to pivot cautiously but decisively, towards a more balanced monetary stance.

This article is intended for Medium and corporate blog audiences, blending technical rigor with accessible explanations to help readers understand the rationale behind a potential MPC rate cut.

The Central Bank of Nigeria (CBN) is set to roll out fresh liquidity control measures through Open Market Operations (OMO) to absorb an estimated N784 billion inflows expected to hit the banking system this week.

A breakdown of the inflows shows that OMO maturities of N459.60 billion will enter the system today, while Nigerian Treasury Bill (NTB) maturities of N324.41 billion are due on Thursday. Banking system liquidity opened at N275.9 billion on September 1, 2025, up 10.4% from N249.8 billion on August 25, according to CBN data.

OMO as a Monetary Tool

OMO is one of the apex bank’s key instruments for regulating money supply in the financial system. By issuing OMO bills, the CBN borrows from banks and investors in exchange for short-term securities, thereby reducing excess liquidity and helping to ease inflationary pressures.

A Bank noted that the N480 billion NTB auction scheduled for Wednesday should further support liquidity mop-up. In the FGN bond market, yields are expected to moderate on the back of strong demand for newly issued on-the-run securities.

Recent Liquidity Trends

Last week, banking system liquidity rebounded to N1.40 trillion, reversing from a deficit of N609.43 billion in the previous week. This was supported by FAAC disbursements and OMO maturities of N758 billion, which outweighed the CBN’s liquidity absorption of N1.19 trillion through OMO sales.

As a result, interbank rates eased:

Open Repo Rate (OPR): down 240bps to 26.50%

Overnight (OVN): down 220bps to 26.95%

In the T-bills secondary market, trading was largely bearish. Average yield across the curve rose 23bps w/w to 22.18%, driven by NTBs where average yields expanded 50bps w/w to 18.88%. OMO bills, however, recorded a marginal decline, with average yields easing 3bps to 25.49%.

Rising OMO Sales

The CBN’s liquidity mop-up via OMO sales has surged by 79.2% year-on-year, supporting naira stability and curbing inflationary pressures.

Between January and August 22, 2025, the apex bank withdrew N13.35 trillion from the financial system, compared to N7.45 trillion in the same period of 2024. This represents a significant tightening push under Governor Olayemi Cardoso, especially compared with 2022, when OMO sales in the first eight months stood at just N710 billion.

Nigeria’s headline inflation has eased for the fourth consecutive month—from 22.22% in June to 21.88% in July 2025—underscoring the traction of the CBN’s disinflation drive.

Expert Insights

An economist opines that the CBN has deployed OMO as a central tool for liquidity management and price stability. He added that OMO has been strategically used to attract Foreign Portfolio Investments (FPIs), which has helped strengthen Naira stability, reduce money supply, and bolster disinflation.

“Collectively, these outcomes have bolstered investor confidence and reinforced Nigeria’s appeal as an investment destination,” he stated.

Another analyst highlighted that total OMO sales reached N13.5 trillion in 2024, a massive jump from N723 billion in 2023. Notably, during a single auction on November 11, 2024, the CBN

sold over N1.4 trillion in 365-day OMO bills, nearly double the entire sales volume of the previous year.

Outlook

One of the key drivers of the aggressive OMO issuances is the need to attract foreign portfolio inflows and strengthen FX liquidity. Elevated OMO yields, which peaked at 24.4% in September 2024, created favorable conditions for carry trades relative to U.S. Treasury yields.

According to a Bank, upward pressure on yields is expected in the near term as liquidity conditions tighten further with new OMO issuances.

The Debt Management Office (DMO) has announced the successful completion of its Federal Government of Nigeria (FGN) bond auction, with a total of N185.9 billion allotted across two re-opened bond offerings.

The auction, held on July 28, 2025, featured the reopening of two previously issued FGN bonds:

• N20 billion for the 19.30% FGN APR 2029 bond (five-year tenor).

• N60 billion for the 17.95% FGN JUN 2032 bond (seven-year maturity).

Settlement is scheduled for July 30, 2025.

Auction Performance

According to data released by the DMO, subscriptions amounted to N39.08 billion for the 5-Year APR 2029 bond and N261.60 billion for the 7-Year JUN 2032 bond.

Out of these bids, the DMO allotted N13.43 billion for the APR 2029 bond and N172.50 billion for the JUN 2032 bond, totaling N185.93 billion, well above the initial offer size.

While the bonds retained their original coupon rates of 19.30% and 17.95%, they were allotted at marginal rates of 15.69% (5-Year bond) and 15.90% (7-Year bond). Analysts note this reflects a decline in yield expectations, suggesting investors anticipate easing inflation or a stable monetary policy outlook.

The reopening attracted 149 bids—40 for the 2029 maturity and 109 for the 2032 maturity. Of these, 74 bids were successful (15 for the 2029 bond, 59 for the 2032 bond).

Comparison with June 2025 Auction

In June 2025, the total allotment was N100 billion, lower than July’s results.

• The 5-Year APR 2029 bond (coupon: 19.30%, maturity: April 17, 2029) attracted 30 bids worth N41.69 billion, but only two bids were successful, with an allotment of N1.05 billion.

• The 7-Year JUN 2032 bond (coupon: 17.95%, maturity: June 25, 2032) attracted 209 bids totaling N561.17 billion. Out of these, 41 bids were accepted, with an allotment of N98.95 billion.

Regulatory Framework

The bond issuance was carried out under the Debt Management Office (Establishment) Act, 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, Laws of the Federation of Nigeria 2004.

The marginal rates for successful bids were:

• 17.75% for the 19.30% FGN APR 2029 (5-Year Reopening).

• 17.95% for the 17.95% FGN JUN 2032 (New, 7-Year).

Investor Information

• Each bond unit is priced at N1,000, with a minimum subscription of N50,001,000. Additional subscriptions must be in multiples of N1,000.

• Though coupon rates are fixed, successful bidders pay a price determined by yield-to-maturity that clears the offered volume, plus accrued interest.

• Interest is payable semi-annually, ensuring regular income to bondholders.

• Principal repayment will be made in full at maturity via bullet repayment.

August 25, 2025 | Economy, GDP, Spotlight

Nigeria’s economy is projected to post stronger growth in Q2 2025, with analysts forecasting real GDP expansion between 3.2% and 3.9%.

This outlook would surpass both the 3.13% growth recorded in Q1 2025 and the performance in the same quarter of 2024, reflecting improved macroeconomic stability and rising non-oil output.

The optimism is supported by the recent GDP rebasing, relative exchange rate stability, and expansion across financial services, telecommunications, and industry.

The National Bureau of Statistics (NBS) is expected to release the official GDP report later this month.

Expert Projections

Experts forecast growth of 3.5%–3.7%, noting that the GDP rebasing has sharpened visibility into sectoral performance. The Purchasing Managers’ Index (PMI) averaged 52.2 points in Q2, up from 51.3 in Q1 2025 and 48.0 in Q2 2024, signaling stronger business activity.

“The Nigerian economy appears well positioned to record stronger growth in Q2 2025, outpacing both Q1 2025 and the corresponding period of 2024,

The projects growth between 3.2% and 3.9%, led by a robust non-oil sector expected to expand by 4.1%–4.6%, while the oil sector is projected to post a modest 2.0%–2.6% gain.

Oil sector performance remains subdued, with crude output steady at 1.48 mbpd in Q2 (vs. 1.47 mbpd in Q1) and weaker oil prices averaging $68.70/barrel compared to $73.66 in Q1. Analysts attribute this to reduced global demand following the so-called “Trump tariff effect.”

The non-oil economy, however, continues to gain traction.

Services remain the primary driver, boosted by bank recapitalisation in finance & insurance.

Telecommunications benefit from tariff liberalisation.

Industry is expected to edge up to 3.6% growth in Q2 from 3.4% in Q1, helped by easing inflation and FX stability.

Agriculture is likely to underperform, growing below its long-term 3% average due to persistent insecurity in key food-producing states such as Benue and Plateau.

They believe macroeconomic stability is central to the positive outlook.

“Considering the moderating inflation, stable currency, and increasing foreign reserves, GDP is expected to have grown in Q2 2025,” he said.

Key Drivers of Expected GDP Growth in Q2 2025

GDP rebasing: Enhances visibility of fast-growing sectors, particularly services and telecoms.

Macro stability: Inflation is easing, FX volatility has moderated, and reserves are improving.

Business activity: PMI of 52.2 reflects stronger private-sector output.

Non-oil momentum: Services, telecoms, and industry continue to expand, offsetting oil sector weakness.

The latest inflation report from the National Bureau of Statistics (NBS) shows that Nigeria’s headline inflation eased to 21.88% in July 2025, down slightly from 22.22% in June. This represents a significant 11.52 percentage-point decline from the 33.40% recorded in July 2024, partly reflecting the rebasing of the Consumer Price Index to November 2009 = 100.

On a month-on-month basis, however, inflation accelerated to 1.99% in July, up from 1.68% in June, signalling that while the annual rate has moderated, price pressures remain elevated at the consumer level. The 12-month average inflation rate fell to 25.65%, compared to 30.76% over the same period in 2024.

Urban vs Rural Dynamics

• Urban inflation slowed to 22.01% year-on-year (July 2025), from 35.77% a year earlier, with the monthly reading declining to 1.86% (vs. 2.11% in June). The urban 12-month average stood at 27.04%, also down from 32.89% in 2024.
• Rural inflation printed at 21.08% year-on-year, down from 31.26% in July 2024. However, rural price pressures were more acute on a monthly basis, with inflation rising sharply to 2.30% in July, from just 0.63% in June. The 12-month average rural inflation eased to 23.84%, compared to 28.86% in July 2024.

Food Prices — Still the Key Driver

Food inflation, the most sensitive component to household welfare, eased substantially to 22.74% year-on-year in July, compared to 39.53% in July 2024. Month-on-month, food inflation moderated slightly to 3.12% from 3.25% in June.
According to the NBS, the downward trend was supported by softer prices for vegetable oil, white beans, local rice, maize flour, guinea corn, wheat flour, and millet. The 12-month average food inflation dropped to 26.97%, from 36.36% in the prior year.

Core Inflation — Energy and Imported Pressures Ease

Core inflation, which strips out volatile agricultural and energy prices, slowed to 21.33% year-on-year in July, compared to 27.47% in July 2024. On a monthly basis, core inflation fell markedly to 0.97% in July, down from 2.46% in June. The 12-month average core inflation eased marginally to 23.63%, from 24.65% a year earlier.

Outlook and Policy Considerations

The data suggests that improved domestic food supply, relative exchange rate stability, and moderation in energy costs are beginning to filter through to consumer prices. Analysts note that the ongoing harvest season for staples such as maize, yam, and cassava has eased market shortages and provided some relief to households.

That said, the persistence of elevated month-on-month inflation underscores the fact that underlying cost pressures remain entrenched. For policymakers, this means that while the disinflation trend is welcome, monetary and fiscal authorities must remain cautious and proactive.

• For the Central Bank of Nigeria (CBN), the challenge is to balance price stability with credit availability. While maintaining a restrictive stance through the Monetary Policy Rate (MPR) is necessary, complementary tools such as targeted credit interventions to the agricultural and energy sectors can help ease supply-side constraints.
• On the fiscal side, the government must address structural bottlenecks, particularly in logistics, power supply, and insecurity in food-producing regions, which continue to fuel cost-push inflation.
• Most importantly, anchoring inflation expectations through credible policy signaling will be key to consolidating the downward trend in headline inflation.

In summary, Nigeria’s inflationary environment is showing signs of improvement, but sustained progress will require a careful blend of monetary discipline, fiscal reforms, and structural interventions to secure lasting price stability.