E-Financial
NSE/Bloomberg: Nigerian Companies Embrace Innovation to Navigate Recession
Top chief executives across sectors who were part of a panel at a recent Nigeria Stock Exchange (NSE)-Bloomberg CEO Roundtable in Nigeria agree that the recession provided an opportunity to innovate and take advantage of opportunities hitherto unseen.
Nigeria, is widely believed to have come out the worst of its recession. While it lasted, businesses suffered erosion in bottom lines, forcing them to tweak models to stay in business and to thrive.
Effects of Recession On Companies
Speaking at the CEO Roundtable Demola Sogunle, CEO of Stanbic IBTC Bank, said that 2015 was a tough year for Nigerian banks, as it “affected the quality of our loan book (personal and corporate). People were just not able to pay. The loans became impaired. The situation was the same in 2016 and was exacerbated by forex illiquidity.”
Graham Hefer, managing director at Okomu Palm Oil Company, commented that in agriculture, there were significant revenue drops, leading to aggressive lowering of cost. In his company, there “were issues with having to import and the lack of forex”.
In the infrastructure sector, “in the last couple of years there hasn’t been any new large scale infrastructure project due to the fact that the recession has constricted ability to pay,” said Andrew Alli, CEO of Africa Finance Corporation (AFC).
Telecom companies’ “capacity to pay is coming to a grinding halt,” added Funke Opeke, CEO of Main One. This is because they are no longer able to approach the market because of forex shortage and there is lack of local substitutes. This has led to rationalisation of services, cost and consolidation. She also noted that “There is loss of skills as experts depart the local market,” adding that the ability to deliver virtual businesses is impaired as interested parties are focusing on competing markets like Kenya and South Africa because of the macroeconomic environment.
Facing Up to The Challenge
On how businesses stood up to the challenge presented by the recession, Sogunle said that when considering companies with which to do backward integration, his bank looked at firms who were able to source raw materials locally and whose reliance on foreign currency was moderated, or those who were in a position to export (and thus could earn FX to bring in their imports).
Sogunle added that in a further bid to reduce costs, his bank went more digital and had to scale down on branches leading to rationalisation. It also made changes in terms of channels and internal operations, leading to faster delivery of service to customers. “We scaled down on sectors. In agriculture for instance, we identified key subsectors to work with.”
Hefer said the recession helped his company aggressively lower costs while guarding forex that it obtained. To bolster their forex sourcing, they devised a system of selling palm oil locally and selling rubber to the international markets. “On productivity, we’ve looked at vertical integration within our company and we are looking for better yielding crops so that we don’t look for more land.” He also stressed the need for value creation if agriculture will deliver the promised benefits.
Mark Bohlund, Bloomberg Intelligence economist commented that “agriculture is going to be the biggest contributor to the economy in the next two years. The country doesn’t have to reinvent the wheel, but simply look at what the Rwandans and the Zambians are doing. It is one of the sectors that can benefit from weak naira and improved cost competitiveness. This is also because it is not as dependent in energy as other sectors like manufacturing.” He also noted that while agriculture is a central part of the government plan, implementation of that plan remains to be seen.
Alli pointed out that there hasn’t been many large scale infrastructure projects that have taken off because people’s ability to pay (including the government’s ability to pay) has gone down.
“Shortages of dollars have caused a rethink around innovative products that will allow financing in naira,” says Alli, but cheap funding in naira given the macro environment is difficult and these things take time. So in the meantime, the industry is resorting to the use of technology to manage cost.
According to Opeke, “there’s the need to create structures that make it easy for private capital to come in” to the telecom industry and to allow investors repatriate their funds. On the demand side, she says since consumers have less buying power, which has to be addressed in the same way the government has to aggressively implement policy.
Fortunately, the government appears poised to key into the needs of business, assured finance minister Kemi Adeosun, who added that “a strong focus on infrastructure and improved ease of doing business is a very clear recipe for growth, profit and progress.”
Debt Management Office (DMO) said the federal government spent N3.14 trillion on servicing its domestic debt in the first quarter of 2026.
The office disclosed the data in its latest domestic debt service report for Q1 2026.
The figure comprises N2.97 trillion in interest payments and N169.68 billion in principal repayments.
The agency said in January, the government spent N741.82 billion on domestic debt service, while the figure rose to N967.67 billion in February.
Debt service increased further to N1.43 trillion in March, bringing the total for the quarter to N3.14 trillion.
The March figure was 47.7 percent higher than the N967.67 billion recorded in February and 92.7 percent above the N741.82 billion spent in January.
Also, the debt office said interest payments accounted for about 94.6 percent of total domestic debt service during the quarter.
The DMO said treasury bills accounted for the largest share of interest payments at N1 trillion, while interest on federal government bonds stood at N1.96 trillion.
The agency said the government also paid N4.24 billion in interest on FGN savings bonds during the period.
The DMO said the principal component of the debt service comprised N169.68 billion in repayments on local-denominated promissory notes.
Overall, the government’s domestic debt service rose sharply through the quarter, with March accounting for almost half of the N3.14 trillion spent between January and March.
Nigeria’s public debt increased by 0.01 percent to N159.35 trillion in the Q1 of 2026.
Interswitch Group, an integrated digital payments and commerce company, together with global banking software provider, Temenos have reassured the Central Bank of Nigeria (CBN) of their commitment to advancing the modernisation of Nigeria’s financial services sector.
Interswitch and Temenos had earlier in June announced a strategic partnership across Africa which would see Interswitch leverage Temenos solutions – across core banking, digital banking, payments, wealth management and financial crime mitigation – to provide cloud-hosted and on-premises managed services to banks and financial institutions across Africa.
This will enable institutions to progressively transform their banking platform and evolve to more customer-centric business models. The service will initially support key African markets including Nigeria, Ghana, Côte d’Ivoire, Kenya and others.
The recent regulatory visit to CBN headquarters in Abuja, was led by the Founder and Group Chief Executive Officer of Interswitch, Mitchell Elegbe, and Managing Director for the Middle East and Africa (MEA) at Temenos, Santhosh Rao, as part of the ongoing efforts by both organisations to deepen collaboration with Central Banks across the African region on the future of digital banking infrastructure across Nigeria and key African markets.
Discussions centred on the strategic partnership between Interswitch and Temenos, and how it will enable Nigerian financial institutions to progressively modernise their core banking platforms and transition to more customer-centric business models.
The two organisations also explored opportunities to work with the CBN in charting new frontiers in Central Bank Digital Currency (CBDC) innovation, leveraging resilient financial networks and decentralised application platforms to support the issuance and management of CBDCs.
Commenting on the visit, Elegbesaid: “Our partnership as Interswitch with Temenos and our continued engagement with the Central Bank of Nigeria reflect a shared commitment to building banking infrastructure that is resilient, inclusive, and ready for the next phase of Africa’s financial evolution.
We are proud to be at the table as these conversations shape the future of digital banking technology and innovation across key Africa markets…”
The Bank of Industry, through BOI Financing SPV Plc, has opened subscriptions for its inaugural Series 1 Fixed Rate Bond worth up to N250bn under its $1bn multi-currency instruments programme, seeking to raise long-term capital to finance businesses across Nigeria’s priority sectors.
The offer, which opened on 5 August and closes on 11 August, is being arranged by Chapel Hill Denham as the lead issuing house. The five-year bond is priced within a yield range of 17.35 per cent to 17.50 per cent and will be listed on the FMDQ Securities Exchange.
According to the offer document, proceeds from the issuance will be deployed to finance eligible businesses and projects across sectors, including agriculture and food processing, healthcare, engineering and technology, renewable energy, petrochemicals, oil and gas, creative industries and solid minerals, in line with BOI’s development finance mandate.
The lender said the financing is expected to improve access to medium and long-term funding for Nigerian enterprises, expand productive capacity, create and preserve jobs, deepen local value addition, support import substitution, boost exports and strengthen domestic value chains.
BOI, Nigeria’s foremost development finance institution, said it has provided funding to more than one million businesses across the country and disbursed over N1.27tn between 2023 and 2025. The institution operates across 34 states and the Federal Capital Territory and is jointly owned by the Ministry of Finance Incorporated and the Central Bank of Nigeria.
The bank also highlighted its financial performance, reporting a 36 per cent compound annual growth rate in gross earnings between 2021 and 2025.
Interest income rose 64 per cent to N884bn in 2025 from N538bn in the previous year, while its capital adequacy ratio stood at 39 per cent, nearly four times the regulatory minimum of 10 per cent. Its non-performing loan ratio was 1.7 per cent, below the CBN’s prudential limit of five per cent.
The bond has been assigned AAA ratings by Agusto & Co. and Intelligence Africa, reflecting the issuer’s strong capitalization, profitability, liquidity and ownership structure.
The issuance is open to institutional and qualified investors with a minimum subscription of N5m and additional investments in multiples of N1m. Interest will be paid semi-annually at a fixed rate, while principal repayment will begin in the third year through equal semi-annual amortised instalments until maturity in 2031.
The bond is also exempt from tax, making it an attractive investment option for investors seeking stable returns amid expectations of declining interest rates.
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