E-Financial
Expert causions Nigeria on Adherence to its Oil Cap
Lukman Otunuga, senior research analyst at FXTM, an award-winning international forex broker has described Nigeria’s 2020 revenue targets as highly optimistic if the country could maintain its projected oil production cap of 2.8 million barrels per day.
Otunuga described some of the revenue targets set by the executive arm of government as ‘quite ambitious’, while noting also that the revenue targets of the budget would expose the country to external risks.
He made these remarks while speaking with journalists in Lagos, referring to the last time Nigeria consistently produced more than two million barrels of oil per day was 2013, hence setting the budget target at 2.18 million barrels per day was ‘overly optimistic’.
In his words: “When we look at the 2020 budget, looking at the numbers, government expenditure is going to be N10.33 trillion, revenue target N8.155 trillion, that leaves a deficit of N2.18 trillion, already, that alone, Nigeria will have to finance that debt domestically or externally — that’s the first weight on the economy,” he said.
“Secondly, I feel the major talking point is oil because if you look at the numbers, Nigeria is projecting $57 oil in 2020 average and to pump 2.18million barrels a day, if you look at the oil market, you will know that it is very difficult for oil to push high due to demands side dynamics.
“Concerns of slowing global growth, rise in production from US shale, rise in crude oil inventories in the United States, you know when you put all of these together, 57 is quite ambitious for oil.
“At the same time, if you look at Nigeria’s oil production, in August, Nigeria produced about 1.86 million barrels roughly, but Nigeria pledged OPEC to keep oil production down around roughly 1.7 million barrels per day and if you look deeper, the last time Nigeria was able to produce over two million barrels a day according to OPEC was back in 2013.
“We haven’t seen over two million barrels a day for almost six years, so how are we going to get that amount in 2020. So when you look at the figures, oil revenue accounts for N2.6 trillion, already if you are unable to meet the revenue, it is going to impact the implementation of the budget.”
Otunuga spoke passionately about the diversification of the economy. This, according to him, is one sure way the government can meet up with it buoyant economic pursuit.
He said, “On diversification, it is so bad that even IMF is telling Nigeria that they need to do more with it; the fact that 90 percent of foreign exchange is still from oil and 70 percent of government’s expenditure is still from oil.
“So where is the diversification? I think when we start seeing less foreign exchange earnings coming from oil and government being less reliant on oil, then we can say diversification is kicking in.
“The budget itself on paper has the ability to elevate Nigeria’s economy but meeting those spending targets is the question. If Nigeria is able to meet the targets, the outlook is positive.
“But let me say the repeat of 2019 budget, where even recent reports have shown that government’s spending target is only about 58 percent, it is still going to be the same; we have a budget and it is not reflecting on the economy.”
The Senior Research Analyst at FXTM however, extolled the Executive and the legislative arms of Government for seeking to reset the budget cycle to run from January to December 2020, away from the irregular budget cycles of the past.
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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