The first quarter of 2025 was defined by significant shifts in global markets, shaped by evolving trade dynamics, geopolitical developments, and strategic policy decisions. As major economies grappled with both internal and external pressures, market behaviour and economic outcomes reflected a delicate balance between resilience and uncertainty.

Nigeria’s economy expanded by 3.40% in 2024, slightly shy of our projected 3.48%. This growth represents the highest expansion since 2021 (FY 2023: 2.74%; FY 2022: 3.10%; FY 2021: 3.40%).

Q1 2025 began with a major shift in how inflation is measured in Nigeria, following the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS). This exercise adjusted the price basket and weights to better capture current consumption patterns and economic realities.

For the first time since March 2022, the Monetary Policy Committee broke its streak of successive rate hikes, opting to hold all policy parameters constant in its Q1 2025 meeting. This locked in a steady MPR rate of 27.50% throughout the quarter. Despite the policy hold, several factors shaped market rates, including strong system liquidity, expectation of disinflation, anticipated rate cuts later in the year, and increased borrowings.

The equities market in Q1 2025 balanced mixed sentiments – on one hand, investor pessimism driven by net losses from key FMCG and telecom firms, and on the other, renewed optimism fueled by strong dividend declarations and positive corporate actions across multiple sectors.

FX market conditions in Q1 2025 mirrored the stability seen at the end of 2024, with the Naira appreciating by 4% in January in the NAFEM window. This was largely driven by gains from the implementation of the Electronic Foreign Exchange Matching System (EFEMS) and extension of access for BDCs to buy up to $25,000 weekly from the official market.

Please follow the link “Q1 2025 Quarterly Market Report – The Tension and The Turn Markets at a Crossroads” to view the full report.