E-Financial
Nigeria Navigates Through Coronavirus Storm
By Lukman Otunuga, Senior Research Analyst at FXTM
As headwinds from the coronavirus pandemic storm lambaste the world economy, the outlook for Nigeria appears more cloudy for the second half of the year.
The next few months are critical for the country’s fragile economic recovery and the main question is whether Nigeria will sink or swim in the coronavirus storm.
On the positive side, the Federal Government announced the second four-week phase of lockdown easing, hopefully leading to some breathing room for the economy. However, the infection rate is still growing at over 25,500 confirmed cases and over 580 deaths.
Damage from the storm
Opinions differ on just how much water Nigeria’s economy is taking on as the cracks appear in its hull. The IMF expects the economy to contract by minus 5.4 percent, while the finance minister sees the contraction at minus 8.9 percent. The World Bank is more positive, putting the damage at minus 3.2 percent this year.
Is patching the leaks enough?
The Central Bank of Nigeria (CBN) cut interest rates and the government unleashed fiscal measures, raising another question – will this be enough to fix the leaks?
External and domestic risks range from shaky Oil prices, slowing global growth, US-China trade uncertainty and Nigeria’s heavy reliance on Oil revenues. Headwinds in the Oil industry may blow even harder given the recorded COVID-19 cases in some offshore sites.
The results so far bear out the volatile outlook. Total revenue from crude Oil and natural gas declined by 31 percent in March, likely knocking onto GDP growth for the first half.
These developments put the country’s $5.9 billion economic stimulus plan in the hot seat. The priority is certainly to jumpstart growth against the current odds. Monetary policy options are becoming thin on the ground, though, and it remains uncertain whether the CBN has enough room to cut interest rates from 12.5 percent given how inflation jumped for the ninth straight month to 12.4 percent in May.
The crux of the economy is consumption, which accounts for roughly 70 percent of GDP. It may be that the CBN will find other unconventional methods to boost consumption and steer Nigeria away from a recession.
At the time of writing, however, the difficulties are significant and risks to the economy remain high as the effects of the coronavirus pandemic prove to be immune to monetary policy. Whether we like it or not, COVID-19 will remain a major theme in the markets as Asia, Europe and the US report an increasing number of new cases.
Adding to the risks is the growing possibility of a new round of lockdowns as fears intensify over a second wave of coronavirus infections pressuring the world economy again. Another wave could have devastating consequences, putting quick recoveries beyond the capacity of central banks and governments and initiating years of slow progress.
If a second wave is avoided, the key question will be whether Nigeria has done enough to mitigate the impacts of COVID-19 and navigate around a rocky recession.
In my opinion, the situation remains unpredictable. A positive way forward could be through economic adaptation measures such as promoting local tourism, building up the technology sector, and tax incentives for consumers, retailers and similar sectors to encourage spending amid an already-loosened credit environment.
E-Financial
First Securities Brokers Empowers Nigerians to Trade in the Stock Market with the Launch of FirstInvest App
First Securities Brokers, one of Nigeria’s leading stockbroking firms and a subsidiary of FirstHoldCo Plc, is pleased to announce the official launch of the FirstInvest App, an innovative mobile investment platform designed to make stock market investing simpler, faster, and more accessible for Nigerians.
The FirstInvest App offers investors a seamless digital experience, enabling them to open and manage their investment accounts, monitor their portfolios, and trade equities listed on the Nigerian Exchange (NGX) directly from their mobile devices.
Designed with both new and experienced investors in mind, the platform combines convenience, security, and ease of use to help users make informed investment decisions anytime and anywhere.
As Nigeria continues to embrace digital financial services, the FirstInvest App reinforces First Securities Brokers’ commitment to driving financial inclusion and expanding access to wealth creation opportunities through technology.
Speaking on the launch, Fiona Ahmed Ahimie, Managing Director of First Securities Brokers, said: “The launch of the FirstInvest App represents another significant milestone in our digital transformation journey and our commitment to delivering innovative investment solutions to our clients.
“We understand that today’s investors value convenience, speed, and accessibility. FirstInvest has been developed to provide exactly that: a secure and intuitive platform that empowers individuals to participate confidently in the capital market from wherever they are.”
She added: “Our goal is to remove the traditional barriers associated with investing by placing the power of timely investment and decision making in the stock market directly in the hands of Nigerians. Whether you are taking your first investment step, actively managing your portfolio or just evaluating your investment, FirstInvest provides the tools and flexibility needed to support your financial aspirations.”
The app delivers a range of features designed to enhance your investing experience, including: Secure digital account opening and onboarding, Real-time access to investment portfolios, Buy and sell Nigerian equities with ease, User-friendly trading interface, Secure transaction processing, Convenient access to market information and investment opportunities.
The launch of FirstInvest aligns with First Securities Brokers’ broader strategy of leveraging technology to improve customer experience while supporting the growth of retail participation in Nigeria’s capital market.
First Securities Brokers remains committed to providing trusted investment advisory services, innovative financial solutions, and exceptional customer service, helping clients build and preserve wealth across generations. The FirstInvest App is now available for download on the Google Play Store and the Apple App Store.
The next currency crisis could accelerate the shift of the roughly $315 billion global stablecoin market into a digital-dollar alternative for citizens in emerging economies, notably in regions like sub-Saharan Africa and Latin America.
As local fiat currencies face devaluation and high inflation, citizens and businesses are increasingly utilizing smartphone-based stablecoins (such as USDT and USDC) as hedges and primary mediums of exchange.
According to the International Monetary Fund (IMF), the rapid adoption of dollar-linked digital assets—particularly in countries heavily affected by inflation like Nigeria—poses significant risks to monetary sovereignty.
With up to 95% of surveyed individuals in some African markets preferring to receive payments in stablecoins over local fiat, the rising volume of these decentralized, cross-border channels weakens domestic currency demand and dilutes the effectiveness of local monetary policy.
IMF observed in a report titled “Stablecoins in Nigeria: A Growing Cross-Border Channel” noted that the widespread use of stablecoins poses risks to monetary sovereignty, particularly as more individuals and businesses turn to digital dollar-linked assets for savings and transactions.
Nodding in agreement is Future Investment Initiative Institute (FII Institute), a non-profit organisation run by the Public Investment Fund, Saudi Arabia’s main sovereign wealth fund.
FII Institute said that central banks face structural challenges.
And according to the institute, when citizens move savings out of national banks and into private digital wallets, conventional capital controls lose their grip.
Institutions like the Bank for International Settlements warn that interest-bearing stablecoins compete directly with domestic-currency deposits, complicating financial oversight and making smartphone-based transfers incredibly difficult for authorities to monitor.
In Nigeria, Naira depreciation has pushed users toward dollar-stablecoins, according to report by Gino Matos in cryptoslate.com.
A stablecoin is a type of cryptocurrency designed to maintain a steady value by pegging its price to a reserve asset, such as a fiat currency (e.g., the U.S. dollar) or a commodity (e.g., gold).
They act as a bridge between traditional money and the digital asset world, providing the speed of crypto without the extreme price swings of assets like Bitcoin.
Federal government has reopened three federal government of Nigeria (FGN) bond issues valued at N1.2 trillion for subscription as part of efforts to raise long-term funds from the domestic debt market.
The Debt Management Office (DMO), which announced the offer on Tuesday, said the three reopened bond issues are each valued at N400 billion.
According to the DMO, the first offer is the January 2035 FGN Bond, a 10-year reopening, carrying an interest rate of 22.60 per cent per annum.
The second is the May 2028 FGN Bond, a 15-year reopening, with a coupon rate of 15.45 per cent per annum, while the third is the June 2037 FGN Bond, a 20-year reopening, also valued at N400 billion.
The office said the bond auction is scheduled for July 20, while successful subscriptions will be settled on July 22.
It explained that the bonds are offered at N1,000 per unit, with a minimum subscription of N50 million and additional investments in multiples of N1,000.
For the reopened bonds, the DMO said successful bidders would pay a price based on the yield-to-maturity that clears the auction, in addition to any accrued interest on the instruments.
Interest on the bonds will be paid every six months, while the principal will be repaid in full on the respective maturity dates.
The DMO reaffirmed that FGN bonds are backed by the full faith and credit of the Federal Government and constitute obligations chargeable on the general assets of the federation.
It added that the bonds qualify as trustee investment securities under the Trustee Investment Act and enjoy tax exemptions for eligible investors, including pension funds, under the Company Income Tax Act and Personal Income Tax Act.
The bonds are listed on the Nigerian Exchange (NGX) and FMDQ Securities Exchange and also qualify as liquid assets for banks in computing their liquidity ratios.
FGN bonds are long-term debt instruments through which investors lend money to the Federal Government in exchange for periodic interest payments and repayment of the principal at maturity.
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