E-Financial
Nigerian Economy expands in 2018; Presidential elections loom
By Jameel Ahmad, FXTM Global Head of Currency Strategy and Market Research,
Confidence over the health of the Nigerian economy was slightly elevated this morning after official reports showed that economic growth expanded in 2018.
Gross domestic product in Africa’s largest economy rose 1.93% last year, compared to the tepid 0.8% in 2017. With fourth quarter economic growth also printing stronger than expected at 2.38% in real terms YoY, Nigeria seems to be gaining economic momentum. However, with the nation’s fortunes still closely linked to Oil markets, growth could be threatened this year if Oil prices continue to depreciate.
It will be a monumental week for the Nigerian markets as presidential elections loom. Although the Naira was stable against the Dollar yesterday at N358 in the parallel markets, there could be some volatility this week due to election uncertainty.
USD rally takes investors by surprise; but will the winning streak be able to continue?
A key overhang for the Dollar may be clearing up after US lawmakers announced they have a deal in principle to avoid another US government shutdown this weekend. However, President Trump’s approval is still required before the spending bill can go through.
At the time of writing, the DXY is holding marginally close to 97, having posted gains over the last eight consecutive days – its longest winning streak since 2016. This recent run of form certainly goes against initial expectations for muted Dollar strength this year given the Federal Reserve’s recent U-turn on US monetary policy.
There is a likelihood that central bank policy in the form of the Federal Reserve is not the catalyst behind the USD rally. It probably doesn’t have anything to do with the U-turn from the Fed a few weeks ago either. Investors are possibly thinking that “no news” when it comes to the ongoing US-China trade talks is not necessarily an example of “no news is good news” for this environment of trade tensions. The threat can’t be understated that the United States will pull the trigger on extra trade tariffs on Chinese goods at the beginning of March. We saw throughout the second half of 2018 that market anxiety over trade tensions pushed the Dollar higher against its global counterparts, and it wouldn’t be that much of a surprise if recent history repeats itself – if there is another escalation in the trade tariff world.
According to the Bloomberg terminal, spot returns for G10 currencies against the stronger Dollar since January 30 have experienced a clear sea of red in favour of the USD. This is following the euphoria that was created when Fed Chair Jerome Powell signalled the need for “patience” when it comes to the potential of hiking interest rates in the United States.
(Source: Bloomberg Terminal)
What else is driving the Dollar train higher?
Another perspective on what could potentially be driving the USD higher is the lure towards the Greenback being amplified by ongoing praises for the US economy. At the same time, it has become a strain to market headlines that counterparts to the United States throughout a range of developed and emerging markets are highlighting downside risks to their respective economies.
Those who are fatigued from yo-yo trade headlines in the market might be inclined instead to align their mindset to the return of economic and central bank divergence between the United States, and pretty much everywhere else. This ultimately supports the prospects of a stronger Dollar.
What data to look out for next and what could this mean to interest rate policy?
Markets will look to this week’s US January CPI reading as the next test of the Fed’s data dependence. Following that, attention will turn to next week’s release of the FOMC January 30 meeting minutes for potentially further clues on what could have encouraged the Fed’s recent pivot.
The current stance on US interest rate policy is expected to, in turn, allow other central banks to take a pause on tightening monetary policy. With central banks worldwide either standing pat or moving towards another round of a potential easing bias, investors may have less impetus to part with their current darling, the Dollar.
The dovish outlook on global monetary policy, coupled with further positive indicators of US economic strength, should support the Dollar’s attractiveness and this could mean DXY returning to its recent high of 97.54 achieved in November 2018.
Remember a positive conclusion to trade talks would be seen as Dollar-negative
However, this isn’t to say that demand for the Greenback will continue unabated in the near term. Traders should not be looking at the USD as one-way traffic going higher up the charts by any means.
While the US government shutdown may have been averted, markets are also having to contend with this week’s crucial talks in Beijing surrounding US-China trade tensions. Both countries are nearing the end of the 90-day truce and in the event that President Trump pushes through with hiking tariffs on Chinese goods come March 2, that will be seen as a potential trigger to give the US dollar another leg up.
Although given the political and economic pressures that are at risk of creating headwinds to the world’s two largest economies, markets are holding out hope that a deal would be struck sooner rather than later. This would be viewed in the market as a potentially Dollar-negative outcome.
Should key deals be approved in Washington (to fund the US government) and in Beijing (to avert a tariff hike), these will be viewed as the catalysts for risk-on sentiment to return to the fore. Meaning that this would be a significant driver behind potentially higher global equity markets, improved demand for emerging markets and commodities like Oil.
It would however be seen as a risk to the relentless Dollar rally that has taken place over February.
Where do Emerging Markets stand in the currency environment?
Yet amidst this winning streak against G10 currencies, the US dollar has seen mixed results against emerging-market currencies during the same period.
(Source: Bloomberg Terminal)
Some of these EM currencies that posted gains against the Greenback are coming back from oversold positions last year, and are supported by factors such as resilient domestic economic fundamentals, foreign fund inflows, and rebounding commodity prices.
However, EM currencies are still exposed to major events that can sway global risk sentiment, such as US-China trade tensions, Brexit uncertainties, and slowing global growth. China’s moderating economic conditions remain a major overhang for the global growth narrative, and the slowdown may be felt in many emerging economies via the trade and FX channels.
Ultimately, EM currencies will likely be dictated primarily by the broader US dollar theme, and whether the Greenback can build on its one percent climb so far in 2019.
In a bid to foster accurate public discourse as well as protect the stability of the financial sector, the Association of Corporate and Marketing Professionals in Banks (ACAMB) has stepped in to educate renowned content creator, Unofficial Osas, following his misrepresentation of facts concerning the Central Bank of Nigeria’s (CBN) recapitalisation drive, and subsequent invitation by the Nigerian Police Force.
ACAMB
The intervention by ACAMB led to the successful retraction of a misleading video regarding the CBN recapitalisation policy, demonstrating the Association’s commitment to its core mandate of public enlightenment.
In his official apology video, the content creator stated, “I was invited by the Nigerian police force national cyber crime centre in Abuja over the video I posted on the 15th of December, where i spoke about 12 banks that were shut down in relation to the CBN recapitalisation policy. I would like to offer an official retraction of that video and want to reiterate that no bank is shutting down.
“As a matter of fact, most of the banks have now met the ₦500 billion minimum capital base for banks with international and the N200bn for national banks recapitalisation requirements, so no bank is shutting down.
“I want to specifically appreciate ACAMB. They were very professional in handling this case and did well to educate and enlighten me on the recapitalisation process. I am now better informed and know better”
Commenting on the resolution, President of ACAMB, Jide Sipe, reinforced the Association’s dedication to protecting the integrity of the banking sector. “ACAMB stands for the restoration of professional banking ethics and public confidence through seamless information management and public enlightenment.
“We believe that an informed public is an empowered public. By engaging Unofficial Osas, we ensured that accurate information regarding the resilience and strength of our banks was disseminated to the millions of Nigerians who follow him.”
The Intervention shows ACAMB is dedicated to evolving strategies that enhance and sustain a good image for the nation’s banking sector as well as assist in fostering better banking habits among Nigerians.
E-Financial
FirstCap MD says Payment Security Remains Biggest Barrier to Bankable Gas and Power Projects
Ukandu E. Ukandu, Managing Director/CEO of FirstCap Limited, a leading investment banking firm and subsidiary of First HoldCo Plc., has reaffirmed that payment security remains the most decisive factor in determining whether gas and power projects in Nigeria secure financing.
He shared this perspective during a panel discussion on project bankability at the 2026 SPE Lagos Energy Week.
Ukandu noted that although several risks influence financing decisions, payment risk consistently emerges as the key barrier to financial close.
“Every major risk matter, but payment risk is the ultimate deal‑breaker. Without strong payment security and disciplined collections, no project can attract sustainable financing,” he said.
He explained that lenders typically evaluate three core risk pillars, payment reliability, foreign‑exchange exposure, and contract enforceability, with payment reliability presenting the greatest challenge across Nigeria’s energy value chain. Persistent collection inefficiencies, rising arrears, and liquidity pressures continue to weaken investor confidence.
To enhance payment security, Ukandu highlighted mechanisms widely used by financiers, including letters of credit, bank guarantees, escrow accounts with payment‑waterfall structures, reserve and sinking funds, sovereign or sub‑sovereign support, and take‑or‑pay offtake agreements.
Addressing foreign exchange risk, he noted that volatility remains difficult to manage, especially for projects with dollar‑denominated costs but naira‑denominated revenues. Lenders typically mitigate this through foreign exchange ‑linked tariff indexation, partial dollarisation for credible industrial offtakers, escrow protections, selective hedging, and foreign exchange reserve buffers.
However, he cautioned that indexation alone seldom eliminates exposure due to regulatory limits and timing delays.
On legal and regulatory certainty, Ukandu stressed the need for contracts that are enforceable and clearly structured, particularly around take‑or‑pay obligations, termination payments, step‑in rights, and dispute‑resolution frameworks. He added that factors such as tariff adjustments, licence changes, and price controls can significantly affect project viability if they are not fully addressed at the contracting stage.
While fiscal incentives such as tax holidays and accelerated depreciation can strengthen project economics, Ukandu emphasised that they cannot compensate for weak fundamentals.
“Incentives make a good project better, but they do not make a weak project bankable. Cash‑flow reliability and disciplined foreign exchange management must come first,” he said. He also noted that naira‑based incentives may lose value if project revenues are not indexed.
He concluded by urging industry players to prioritise revenue security from the earliest stages of project structuring: “Protect returns at the source. Build strong offtake arrangements with solid credit support and currency alignment to ensure cash is received in full and on time.”
Sterling Financial Holdings Company Plc (Sterling HoldCo) has begun allotting 12,581,000,000 ordinary shares of 50 kobo each at ₦7.00 per share from its 2025 Public Offer.
Sterling HoldCo
The process follows Central Bank of Nigeria (CBN) and Securities & Exchange Commission (SEC) approvals.
The offer, opened September 15, 2025, drew 18,280 applications for 16.84 billion shares worth ₦117.88 billion—109.79 per cent oversubscribed.
Valid applications from 18,276 shareholders totalled 13.81 billion shares; all compliant applicants receive full allotments.
Refunds for rejects/excess, plus interest, process via RTGS/NIBSS by February 17, 2026, handled by Pace Registrars Limited.
Shares credit to CSCS accounts by the same date; new accounts held in pool pending documentation.
The raise bolsters capital for banking subsidiaries, injects ₦10 billion into SterlingFI Wealth Management to meet SEC rules, and funds credit expansion, innovation, and support for businesses/households.
Strong Financials, Diversified Growth
FY25 interim results show 99 per cent profit before tax growth; gross earnings up 46 per cent to ₦476.5 billion; assets at ₦3.92 trillion; deposits up 18 per cent to ₦2.98 trillion; shareholders’ funds up 39 per cent to ₦424 billion.
Cost-to-income ratio improved to 63 per cent from 72 per cent.
Subsidiaries—Sterling Bank Limited (conventional), The Alternative Bank Limited (non-interest, 150+ branches)—comply with CBN capital rules.
Initiatives include Mata Zalla (women tricycle training) and Plateau agriculture programme.
The offer attracted first-time retail investors, broadening ownership.
Sterling HoldCo welcomes new shareholders, poised for sustained growth and economic impact.
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