Macroeconomic Report & Economic Updates

In January 2025, the Central Bank of Nigeria reported a 1.85% increase in money supply (M3), rising from ₦108.96 trillion in November 2024 to ₦110.98 trillion in January 2025. The report also showed that net foreign assets stood at ₦35.39 trillion in January 2025, reflecting a 19% year-on-year increase from ₦29.73 trillion in January 2024. Similarly, net domestic assets grew by 16.5% year-on-year, from ₦64.87 trillion in the previous year to ₦75.59 trillion in January 2025. The rise in money supply (M3), which measures the total amount of money circulating in the economy, was driven by increased lending, higher spending activity, and a surge in foreign investment inflows. The increase in net foreign assets resulted from improved external reserves and a stronger trade balance. While this expansion in broad money supply can stimulate economic activity and investment through increased domestic credit and liquidity, it may also fuel inflationary pressures, especially if supply-side constraints persist. To mitigate these risks, policies should be implemented to strengthen domestic production in manufacturing, agriculture, and industrial output to meet rising demand and absorb excess liquidity. Additionally, the Central Bank of Nigeria should adopt a cautious monetary stance to balance economic growth with price stability.

Nigeria's Purchasing Managers' Index (PMI) this month showed that business activity in Nigeria  remained in expansion territory  over the three-month period under study, although with slight fluctuations in momentum. The composite PMI stood at 56.4 points in November, increased to 57.6 points in December, and then moderated  slightly to  55.7  points  in January  2026. An  index  above  50  points indicates expansion in economic activity, meaning that all three index readings reflect continued   growth   in  aggregate   output.   While  the slight   dip   from December to  January suggests a moderation in  the pace of  growth, the index remains  comfortably  above  the  50-point  threshold,  indicating  that  economic conditions continued  to  improve, supported  by  rising output,  new  orders, and employment levels across 
key sectors.
 

According to the Central Bank of Nigeria’s Purchasing Managers’ Index (PMI), business activities in Nigeria maintained an expansionary path, with the composite PMI standing at 55.7 points in January 2026. While the current index represents a decrease from the 57.6 points recorded in December 2025, the current record marks the fourteenth consecutive month of business expansion, as the index remained above the 50-point threshold. Key sectors of the economy experienced growth, leading to sustained increases in overall output. Specifically, the industrial sector stood at 56.0 points, the services sector at 54.5 points, and the agriculture sector at 54.2 points. Although input and output price indices reduced slightly during the month, input price indices remained higher than output prices across the sectors measured, indicating inflationary and cost pressures. Overall, this signals sustained growth early into 2026, but increasing inflationary pressures point to the need for policies that ease production bottlenecks, improve energy and transport infrastructure, enhance supply chain efficiency, and reduce cost pressures to sustain expansion. Therefore, government policies should focus on easing the constraints that raise production costs, particularly in power supply and access to affordable credit for manufacturers and agribusinesses. There is also a need for continued efforts to stabilise inflation and prevent cost pressures from eroding business confidence and slowing the pace of expansion.

According to data from the Central Bank of Nigeria (CBN), the naira appreciated at the Nigerian Foreign Exchange Market (NFEM), strengthening to ₦1,349.5 per US dollar on February 10, 2026, marking its strongest level in more than a year. This also represents an improvement from the end of January 2026, when the Naira traded around ₦1,391 per US dollar. On a year-on-year basis, the naira strengthened from about ₦1,502 per US dollar on February 10, 2025, indicating an improvement in the exchange rate over the period. The appreciation of the naira suggests relatively improved conditions in the foreign exchange market during the period. This reflects reduced demand pressure on the dollar, supported by inflows from export earnings and foreign portfolio investments. While the recent movement is positive, sustained exchange rate stability will depend on the persistence of these inflows and broader market conditions. To maintain this improvement, policymakers should prioritise measures that support a steady foreign exchange supply, particularly by strengthening export capacities and encouraging stable capital inflows. In addition, continued transparency in FX market operations and timely access to foreign exchange will also be important in reducing uncertainty and supporting confidence in the market over the medium term.

According to data gathered from the Central Bank of Nigeria (CBN), the price of Nigeria’s crude oil rose to US$75.03 per barrel on 29 January 2026, reaching the highest level since 30 September 2025. Prices gained over $4 per barrel, representing an approximate 5% increase, as Brent and other benchmarks extended gains for a third consecutive session. The surge was driven largely by rising fears over possible supply disruptions from the Middle East, particularly along strategic routes such as the Strait of Hormuz. The price spike has significant implications for Nigeria’s economy, given its reliance on oil revenues. Higher crude prices could bolster government revenue and foreign exchange inflows, strengthen reserve buffers, and provide fiscal space for public expenditure. However, ongoing geopolitical risks may also introduce volatility, affecting market stability and planning for oil-dependent sectors, which increases the need for diversification of the economy. From a policy perspective, maintaining prudent fiscal and reserve management is essential to maximise benefits from the rally while mitigating risks from potential price swings. Monitoring global oil markets and adjusting production and export strategies will be key to optimising gains.