Global Economy

U.S.A: Inflation in the U.S. edged higher in December, marking the final consumer price report under the Biden administration. The Consumer Price Index (CPI) rose 2.9% year-on-year, up from 2.7% in November, aligning with market expectations. On a monthly basis, prices increased by 0.4%. Core inflation, which excludes food and energy prices, softened slightly to 3.2% annually from 3.3% in November, its first deceleration in six months, while monthly core inflation slowed to 0.2%.The data sparked optimism on Wall Street, with hopes of additional Federal Reserve rate cuts later in the year. Borrowing costs fell sharply as the 10-year U.S. Treasury yield dropped 11.9 basis points to 4.669%, marking its biggest one-day decline since November. Stocks also surged, with the S&P 500 and Dow Jones Industrial Average both rising by approximately 1.6%.

Sub-Saharan African Economies

China: China’s economy grew by an impressive 5.4% year-on-year in Q4 2024, surpassing analysts’ expectations of 5.0% and accelerating from the 4.6% growth recorded in Q3. This robust performance, the strongest since Q2 2023, enabled the government to meet its annual growth target of 5.0%. The quarterly growth of 1.6% in October-December also reflected the positive impact of a series of stimulus measures rolled out since September to revive economic activity. These measures aimed to counter challenges posed by weaker global demand and anticipated trade tensions, particularly as President-elect Donald Trump prepares to reintroduce tariffs on Chinese goods. Despite external headwinds, China’s economic momentum highlights the resilience of the world’s second-largest economy and its policymakers’ commitment to maintaining stability and growth.

Angola: Angola’s inflation rate eased to 27.50% in December 2024, the lowest since March, marking the fifth consecutive monthly decline. The relative stabilization of the kwanza contributed to this slowdown. However, on a monthly basis, consumer prices rose by 1.70%, the highest increase in six months. The most significant price increases were in health services (2.42%), followed by miscellaneous goods and services (1.99%), hotels, cafes, and restaurants (1.98%), and clothing and footwear (1.91%).

Nigeria: Nigeria’s inflation rate surged to 34.8% in December 2024, marking its fourth consecutive monthly increase and reaching a near 30-year high. This rise occurred despite a slight decline in food inflation, which eased to 39.84% from 39.93% in the previous month. On a monthly basis, the Consumer Price Index (CPI) grew by 2.44%, a slowdown from November’s 2.64% increase. As part of efforts to provide a more accurate reflection of household expenditure patterns, the National Bureau of Statistics is in the process of rebasing the CPI, with the updated index set to take effect at the end of this month.

 

Domestic Economy

Major updates during the week:

  • Nigeria’s headline inflation rose marginally by 20 basis points to 34.80% in December 2024, up from 34.60% in November, driven by increased festive season demand, according to the National Bureau of Statistics.
  • The Nigeria Customs Service reported record revenue of N6.11trn in 2024, surpassing its target by 20% and growing 90.34% year-on-year, driven by duties, levies, and VAT on imports, while analysts urge a shift toward trade facilitation amid stable naira and rising trade surpluses with the US.
  • Nigeria’s oil rig count has doubled to 32 in 2024, up from 16 in 2021, according to the Nigerian Upstream Petroleum Regulatory Commission.

 

Nigerian equity market: Bearish week for the local bourse as investors lose ₦1.45trn 

The local bourse ended the week bearish, reversing the prior week’s gains due to widespread sell-offs across most sectors. The All-Share Index (ASI) fell by -2.94%, closing at 102,353.70 points from 105,451.06 points, while the YTD return dropped to -0.56%. Market capitalization declined by ₦1.45trn to close at ₦62.9trn. Key drags included DANGCEM (-16.46%), TRANSPOWER (-9.97%), MTNN (-3.72%), and ARADEL (-7.02%), which outweighed gains from OANDO (14.88%) and DANGSUGAR (16.7%). Of the listed equities, 33 posted gains, while 57 recorded losses. Sectoral performance was bearish across the board, with the Industrial Goods sector leading the declines, shedding 8.20%.

Nigerian fixed-income market: Bond calendar fuels bearish pressure in the bond market.

This week, the Nigerian Treasury Bills market closed positive, with the average yield declining by 7bps. This was driven by significant demand at the short end, as the 6-Mar-2025 and 27-Mar-2025 maturities shed 197bps and 127bps, respectively. Conversely, the bond market extended its bearish run, with the average yield climbing 21bps week-on-week to 20.07%, pressured by increased supply expectations following the release of the DMO’s quarterly issuance calendar. However, Nigeria’s Eurobonds posted gains, as the average yield fell by 9bps to 9.44%, fueled by robust demand at the short end. We expect similar trends across the fixed income space next week.