Global Economy
- According to the Bureau of Labor Statistics, In the month of February, 678,000 new jobs were added in the United States, with the unemployment rate dropping further down to 3.8%. The number of unemployed people in the country now sits at 6.3 million. Prior to COVID-19, the unemployment rate was 3.5% and there were 5.7 million people without a job. The new figures suggest economic growth. Restaurants, bars and hotels added 179,000 jobs, professional and business services added 95,000, construction added 60,000 and transportation and warehousing added 48,000. Health care jobs increased by 64,000 in February, with retail trade adding 37,000 and financial activities adding 35,000.
- Eurozone consumer prices rose by a record 5.8% in February, underscoring fears that the war in Ukraine will drive up the cost of living and increasing pressure on the European Central Bank over when to adjust monetary policy. February’s estimate for annual eurozone inflation was up from 5.1%t in January and was above the 5.4 per cent average forecasts. prices rose 6.1 per cent. Excluding more volatile energy, food, alcohol and tobacco prices, core inflation increased from 2.3 per cent in January to 2.7 per cent in February.
- The Institute for Supply Management (ISM) survey- a measure of U.S. services industry activity dropped to a one-year low in February, suggesting that a slowdown in economic growth at the end of 2021 persisted. The ISM said on Thursday its non-manufacturing activity index fell to 56.5 last month, the lowest reading since February 2021, from 59.9 in January. The third straight monthly decline in the index was despite coronavirus cases, driven by the Omicron variant, decreasing substantially from mid-January.
Nigeria Economy
- According to Nigeria Inter-Bank Settlement System (NIBBS) data, mobile transactions in Nigeria increased by over 4000% in five years from N196.29bn in 2017 to N8.07tn at the end of 2021. In 2020, the volume of mobile transactions was 132million valued at N3.05tn, by 2021 the volume of mobile transactions surged to 284.5million, while the value hit N8.07tn. Meanwhile, the NIBBS attributed the trend to the COVID-19 pandemic which accelerated the adoption of instant payments making more people switch to electronic channels for funds exchange
- Despite efforts by the management of the Nigeria Customs Service to get striking clearing agents to return to work, freight forwarders operating at both the Tin-Can Island as well as the Ports & Terminal Multipurpose Limited continued their indefinite strike while demanding that the e-invoicing policy be modified. The Central Bank of Nigeria had recently introduced e-valuation and e-invoicing policy for imported goods, using what is called Vehicle Identification Number for the valuation system.
- President Muhammadu Buhari has asked the senate to confirm the duo of Mohammed Salisu and Moa Ohaegbe as new members of the Monetary Policy Committee of the Central Bank of Nigeria and approve the reappointment of five members namely: Micheal Obada, Festus Adeola, Aliyu Sanusi, Robert Asuquo and Aliyu Ahmed. The committee’s next meeting is set to take place on the 22nd and 23rd March, where the recent GDP and Inflation figures would come in sharp focus.
- Federal lawmakers have voted overwhelmingly in support of a constitutional amendment aimed at allowing state governments to generate and transmit their own electricity. The development is expected to cheer business leaders in Nigeria particularly in Lagos, Nigeria’s commercial hub, which hosts over 2,000 industries and about 65 percent of the country’s commercial activities. In the meantime, the bill would have to receive support from state lawmakers across Nigeria’s 36 states, before it would be sent to President Muhammadu Buhari for his assent.
- Economists at the International Monetary Fund and World Bank have revealed that persisting inflationary pressure will limit the ability of central banks in Nigeria and other emerging markets to lend to their respective governments in order to finance their budgets. According to them, the pandemic has increased the gross financing needs of the public sector, and many emerging economies have run down this source of financing. The Federal Government’s total borrowing from the CBN stood at N15.51tn as at August 2021.
Review and Outlook
Calls by the IMF last week for the country to limit the rate at which the CBN lends to the Federal Government are valid and consistent with the views of many local analysts. The Federal Government has amassed debts to the CBN over the years to the tune of about N15tr. Although, the CBN Act 2007, Section 38 (1) empowers the central bank to provide temporary advances to the Federal Government in respect of temporary deficiency of budget revenue, subsection 2 of the same section stipulates, the amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.
On the international scene, new rafts of sanctions against Russia, have seen the Russian Central Bank get barred from a good portion of the country’s reserves domiciled in western allied countries. At the same time, Russian banks have been ejected from the Swift system, two actions which have adversely affected the Russian economy. Looking forward, US February CPI figures are expected on Thursday. The European Central Bank will meet in the coming week with no change to policy rates expected despite the recently released record inflation figures. Also, next week, UK January output data will be due on Friday before then however, China’s trade and inflation data will be released on Monday and Wednesday respectively.
Energy Report
Domestic
- The Nigerian National Petroleum Company (NNPC) Limited has stated that the ongoing war between Russia and Ukraine may prolong the three-week-old scarcity of petrol in Nigeria, as the bulk of the refined products coming into the country from the warring region and its connecting areas are facing freight delays.
- The management of Seplat Energy said it has concluded negotiation to buy the entire share capital of ExxonMobil’s shallow water oil field in Nigeria for $1.28 billion, marking the US major’s divestment from Nigeria.
- Oil marketers under the aegis of Independent Petroleum Marketers Association of Nigeria (IPMAN) said they have commenced the compilation of losses arising from the importation of adulterated fuel into the country and they shall be demanding compensation from the Federal Government.
- President Muhammadu Buhari has described the rising oil prices as a good opportunity for Nigeria under the Petroleum Industry Act (PIA) 2021.
- The GMD of NNPC, Mele Kyari, on Monday expressed the continuous efforts of the national company to develop Nigeria’s gas resources despite the exit of IOCs from the country due to the global push for a net carbon zero target. He also stated that the IOCs’ divestment must address issues of abandonment and decommissioning of oil assets.
- The Nigeria Extractive Industries Transparency Initiatives (NEITI) has attributed the over three-week of petrol scarcity to continuous subsidy regime in the country and attributed the IOCs divestment to oil theft and vandalism.
- OPEC has again raised Nigeria’s oil production quota from 1.718 mb/d for March 2022 to 1.735 mb/d for April 2022 despite the consistent underproduction of the country compared with the approved quota.
- Nigeria and Equatorial Guinea have signed a Memorandum of Understanding for the supply of gas from Nigerian offshore fields to a gas processing facility in Punta Europa, Equatorial Guinea.
- IPMAN and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) are currently at loggerheads over the inflated petrol pump price by some marketers.
- The NNPC has also attributed the non-production of modular refineries in the country to the regulated petrol pump price by the government.
- The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said Nigeria’s proven natural gas reserve has risen from 206.53 TCF to 209.5 TCF, highlighting the need to harness the huge potentials in the nation’s gas reserve
- The NNPC Limited and its Joint Venture partners have sealed a Gas Supply and Aggregation Deal with Dangote Industries Limited (DIL) to increase the local production of fertilizer in the country. Other partners to the agreements are Shell Petroleum Development Company (SPDC), Total Energies Nigeria, Nigerian Agip Oil Company (NAOC), and Gas Aggregation Company of Nigeria (GACN) as the gas aggregator.
Foreign
- Oil prices jumped on Monday on escalating sanctions against Russia over its invasion of Ukraine, which in turn led President Vladimir Putin to put his country’s nuclear deterrent on high alert.
- OPEC+ ahead of its March 2022 meeting revised downward its forecast for oil market surplus for 2022 by about 200,000 b/d to 1.1 mb/d, underscoring the global market tightness.
- The E. ON Group, Europe’s largest operator of energy networks, said it rejected the demand to shut down the Nord Stream 1 gas pipeline as part of sanctions against Russia for invading Ukraine.
- The International Energy Agency (IEA) member countries have agreed to a coordinated release of oil from their strategic reserves amid soaring oil prices and tight supplies as Russia invaded Ukraine.
- The OPEC+ on Thursday decided to stick with their gradual release of crude oil to the market, indicating an increase of 400,000 b/d to the market in March despite the price surge and the call to supply more.
- A bipartisan group of U.S. senators including Democrat Joe Manchin and Republican Lisa Murkowski introduced a bill on Thursday to ban U.S. imports of Russian oil, arguing the shipments can be replaced by boosting output in North America and other places.
- Oil prices rebounded on Friday as fears of Western sanctions disrupted Russian oil exports, outweighing the possibility of more Iranian supplies, while reports of a nuclear plant fire in Ukraine spooked markets.
- Brent had a weekly growth of +17.15% (see Table 1).
Metals
Gold inched upwards by +4.27% while Silver inched upwards by +7.30% W-o-W (see Table 1).
Agriculture
- Cocoa prices dropped by -0.08% W-o-W.
- Corn prices grew by +12.44% W-o-W while Sugar prices grew by +9.72% (see Table 1).
Table 1: Weekly Change in Commodity Prices
Commodity | 04-Mar-22 | 25-Feb-22 | 31-Dec-21 | Weekly Chg | YTD Chg |
Brent | 113.89 | 97.22 | 78.54 | 17.15% | 45.01% |
Gold | 1967 | 1886.5 | 1827.1 | 4.27% | 7.66% |
Silver | 25.715 | 23.965 | 23.27 | 7.30% | 10.51% |
Cocoa | 2610 | 2612 | 2546 | -0.08% | 2.51% |
Corn | 739 | 657.25 | 595.5 | 12.44% | 24.10% |
Sugar | 19.31 | 17.6 | 18.83 | 9.72% | 2.55% |
Source: CNBC |
*Data for 04th March 2022 is as of 6:07pm (Nigerian Time)
Outlook
- In the coming week, oil prices are expected to rise with Western sanctions on Russia affecting supply of Russian oil to the market.
- Gold price is expected to climb in the coming week as demand for the precious metal increases.
- Cocoa prices are expected to grow in the coming week as amid concerns of dry weather affecting top producers such as Ivory Coast’s supply
- Sugar prices are expected to appreciate in the coming week with elevated crude oil prices weighing in on it’s price.
- Corn prices are expected to continue its price surge as Russia-Ukraine crises forces reduced supply in the market.
Fixed Income and Money Market
Currency Market
This week, the Naira was a little unchanged at the I & E FX window, as it was flat for most trading sessions.
On Thursday, the Naira closed at the N416.50/USD, which indicates on a week-on-week (W-on-W) depreciation, at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) window it appreciated, rising by -0.05%.
Average Benchmark Yields | |||
24-Feb-22 | 3-March-22 | % Change | |
I & E FX Window | 416.25 | 416.50 | +0.06% |
NAFEX ($/N) | 415.96 | 415.74 | -0.05% |
Source: FMDQ
Money Market
System liquidity was elevated this week buoyed by FAAC and OMO maturity inflow, casing money market rates to trade in single digits this week.
At the close of the trading on Thursday, open repo (OPR) and overnight rates (O/N) settled at 2.00% and 2.75% respectively indicating a W-o-W significant decline of -84.21% and -79.12%.
Money Market Rate | |||
24-Feb-22 | 3-March-22 | % Change | |
OPR (%) | 12.67 | 2.00 | -84.21% |
O/N (%) | 13.17 | 2.75 | -79.12% |
Source: FMDQ
We expect rates to hover around current levels barring any significant outflows from the Apex bank.
Treasury Bills Market
The Nigerian Treasury Bills market maintained its bullish trend this week as the market saw buying interest.
At the close of trading on Thursday, the market was bullish with buying interest seen at the NT Bills. Average benchmark yields for T. Bills fell by -8.27%, yields on OMO bills remained flat on a W-on-W basis.
Average Benchmark Yields | |||
24-Feb-22 | 3-March-22 | % Change | |
T. Bills (%) | 3.75 | 3.44 | -8.27% |
OMO Bills (%) | 3.92 | 3.92 | – |
Source: FMDQ
We expect activity next week to be weak depending on the market liquidity situation.
FGN Bond Market
The local bond market also continued its bullish run this week, with interest seen across all maturities.
At the close of trading on Thursday, the overall average benchmark yields closed at 10.56%, benchmark yield falling by -6.63%.
Average Benchmark Yields | |||
24-Feb-22 | 4-March-22 | % Change | |
Short Tenor | 7.91 | 7.44 | -5.94% |
Mid Tenor | 10.4 | 10.03 | -3.56% |
Long Tenor | 11.89 | 11.78 | -0.93% |
Source: FMDQ
FGN Eurobond Market
The Eurobond market was relatively bullish at the end of trading this week, after witnessing several bearish sessions, with buying seen across most maturities. The average benchmark yield declined by 4bps to 7.54%.
Nigerian Stock Market
NGX
- The Nigerian bourse started the week on a positive note while market sentiment bullish, albeit with occasional bargain hunting. The NGXASI closed the week on a negative note with a decline of -0.13%. The Nigeria Exchange loss N32.24bn. However, year-to-date return was positive at +10.66%, while the market capitalization settled atN25.48trillion.
- Sectoral performance across sectors tracked was mixed, at the close of trading on Friday, NGX-Oil and Gas was the highest gainer for the week with +10.61% while NGX- MERIVAL recorded the highest decline with -3.61%. NGX-MERIGRW,NGX-AseM closed the week with +1.18%, +0.74%, respectively.
- Market breadth for the week closed positive with 13 gainers led by JOHN HOLT as against 18 losers led by ROYALEX
Chart1: Movement of NSEASI Index Points 25 FEB 2022-4 MAR. 2022

NASD OTC
The NASD OTC Security Index(NSI) and Market Capitalization closed the trading week flat Market capitalization and NSI. The NSI and Market capitalizationclosedtheweek730.61pointsandN618.66bn flat respectively.
Dangote and Toni Indices
Dangote Index closed the week negative with 142.48 basis points from143.03 basis points recorded the previous week, representing a decline of-0.38%
DANGSUGAR recorded a declineof-7.65%, NASCON -8.33% Respectively DANGCEM recorded flat.
Table 2: Dangote Index W-o-W Change
Company | 25-Feb-22 | 4-Mar-22 | WoW Chg |
DANGCEM | 273.5 | 273.5 | 0.00% |
DANGSUGAR | 17 | 15.7 | -7.65% |
NASCON | 14.4 | 13.2 | -8.33% |
Source: NGX
Furthermore, the Elumelu Index closed positive with118.75basispointsfrom124.99 basis points recorded the previous week, a W-o-W declined of+4.99%
TRANSCORP,UBCAP and AFRIPRUD UBA, closed the week positive with +14.29%, -0.71%, -7.48%, -5.17%.respectivelywhile.TRANSCOHOT closed flatW-o-W.
Table 3: ElumeluIndex W-o-W Change
Company | 25-Feb-22 | 4-Mar-22 | WoW Chg |
AFRIPRUD | 7.35 | 6.8 | -7.48% |
TRANSCOHOT | 5.38 | 5.38 | 0.00% |
TRANSCORP | 1.26 | 1.08 | -14.29% |
UBA | 8.7 | 8.25 | -5.17% |
UBCAP | 14 | 13.9 | -0.71% |
Source: NGX