Global Economy

U.S.A: The Federal Reserve implemented a 25bps rate cut in December 2024, its third consecutive reduction this year, lowering the federal funds rate to 4.25%-4.5%, as anticipated. The updated dot plot shows policymakers now expect only two rate cuts in 2025, totaling 50bps, down from the previously projected 100bps. The Fed raised its GDP growth forecasts for 2024 (2.5% vs 2% prior) and 2025 (2.1% vs 2%), maintaining 2% for 2026. Similarly, PCE inflation projections were adjusted upward for 2024 (2.4% vs 2.3%), 2025 (2.5% vs 2.1%), and 2026 (2.1% vs 2%), alongside higher core PCE forecasts for the same years. Meanwhile, unemployment forecasts were revised lower for 2024 (4.2% vs 4.4%) and 2025 (4.3% vs 4.4%), holding steady at 4.3% for 2026.

 

Sub-Saharan African Economies

United Kingdom: The Bank of England held its benchmark rate steady at 4.75% during its December 2024 meeting, aligning with market expectations. The decision reflected concerns over rising CPI inflation, wage growth, and inflation expectations, which heightened the risk of persistent inflation. However, three policymakers voted for a 25bps cut to 4.5%, citing subdued demand and a weakening labor market. The central bank reiterated the need for a gradual approach to easing monetary policy and emphasized that rates must remain restrictive until inflation risks sustainably recede to the 2% target. Future policy decisions will be assessed on a meeting-by-meeting basis.

Angola: Angola’s economy expanded by 5.5% y/y in Q3 2024, the fastest growth since Q1 2015, up from 4.1% in the prior quarter. Key contributors to GDP included crude oil and natural gas extraction (29.3%), trade (22.5%), agriculture and forestry (11.4%), manufacturing (8.6%), other services (7.2%), and fishing (5.8%). On a quarterly basis, GDP rebounded by 2.9%, recovering from a 0.1% decline in the previous quarter.

Nigeria: Nigeria’s inflation rate climbed to a nearly 30-year high of 34.6% in November 2024, driven by surging food inflation at 39.93% and core inflation hitting a record 28.75%. Key drivers included rising prices of staple foods and consumer goods. Month-on-month, the CPI increased by 2.64%, maintaining the prior month’s pace.

Rwanda: Rwanda’s economy grew by 8.1% y/y in Q3 2024, down from 9.8% in Q2, amid slowdowns in industry and agriculture. Services remained robust, rising by 10%, while quarterly GDP growth accelerated to 3.0% from 1.5%.

 

Domestic Economy

Major updates during the week:

  • Nigeria’s inflation hit a near 30-year high of 34.60% in November 2024, driven by low food productivity, and naira devaluation
  • President Bola Tinubu presented the ₦47.90 trillion 2025 “Budget of Restoration,” emphasizing security, economic stability, and tough reforms, including subsidy removal and naira floating, while projecting inflation to decline to 15% in 2024 amid concerns about a 3.9% GDP deficit and regional tax tensions
  • The CBN granted Bureau de Change operators’ temporary access to $25,000 weekly to ease FX pressures and stabilise the naira during the festive season

 

Nigerian equity market: NGX  ASI crossed 100,000-point mark this week amid sectoral buying interest

The Nigerian bourse crossed the 100,000-point mark as the All-Share Index rose +1.76% to 101,129.09 points, up from 98,760.59 points last week. Investors gained ₦1.06 trillion as market capitalization climbed to ₦61.30 trillion. Key gainers included MRS (+36.36%), ETERNA (+32.36%), and UACN (+26.30%), while PZ (-8.00%) and DANG SUGAR (-7.14%) led the losers. Sectorally, four of five major sectors saw gains, with Insurance leading at +8.83%. This bullish momentum reflects robust buying interest in Insurance, Consumer Goods, and Banking stocks.

Nigerian fixed-income market: Eurobonds in deep red.

The Nigerian Treasury Bills market ended the week on a positive note, driven by strong buying interest in mid to long-term maturities, leading to an 8-basis-point decline in average yields week-on-week. In contrast, the bond market experienced bearish sentiment, influenced by the week’s auction where the DMO issued N211 billion in 2029 and 2031 maturities despite attracting bids totaling N278 billion. Investors demanded higher yields due to prevailing market conditions and the latest inflation figure of 34.60%, pushing stop rates higher. Consequently, the secondary bond market traded bearishly, with average yields rising by 21 basis points week-on-week. Meanwhile, the Eurobond market saw continued bearish momentum, driven by significant selling pressure across the curve.