Global Economy

The U.S. economy unexpectedly shrank by 0.3% y/y in Q1 2025, its first contraction in three years and a sharp reversal from the 2.4% y/y growth posted in the previous quarter. The downturn caught markets off guard, missing expectations for modest growth, as a 41.3% surge in imports, driven by businesses and consumers front-loading purchases ahead of Trump’s looming tariffs, weighed heavily on GDP. Consumer spending, which has been a key pillar of resilience, also lost steam, slowing to 1.8%, its weakest pace since mid-2023. Meanwhile, federal government expenditures tumbled by 5.1%, the steepest drop since early 2022. One bright spot was fixed investment, which jumped 7.8%, its best performance in nearly two years, reflecting continued strength in business capital expenditure despite policy headwinds.

Sub-Saharan African Economies

China: China’s manufacturing activity took an unexpected downturn in April 2025, with the official NBS Manufacturing PMI slipping to 49.0 from March’s 12-month peak of 50.5, falling short of market expectations at 49.8. This marked the first contraction since January and the steepest drop since December 2023, highlighting growing strain from the prolonged China US tariff standoff despite Beijing’s ongoing stimulus efforts. Output slowed to 49.8 from 52.6 and new orders declined to 49.2 from 51.8, signaling a cooling in both production and demand. Export orders saw a sharp slide to 44.7, the lowest level in nearly a year, while employment weakened further to 47.9. Purchasing activity fell to 46.3 after three months of gains, and delivery times stretched slightly, pointing to renewed supply pressures. On the pricing front, input costs dropped to 47.0 and selling prices tumbled to 44.8, both posting their biggest declines in seven months. Business confidence also dimmed, easing to 52.1, its weakest reading since September, as uncertainty continues to weigh on the outlook.

Kenya: Kenya’s inflation rose to an eight-month high of 4.1% in April 2025, up from 3.6% in March, though it remained within the central bank’s 5±2.5% target range. Monthly inflation moderated to 0.3% from 0.4% previously. Earlier in the month, the central bank cut its policy rate for the fifth consecutive meeting to 10% to spur private sector credit and economic growth.

Nigeria: The Stanbic IBTC Nigeria PMI eased slightly to 54.2 in April 2025 from 54.3 but marked a fifth straight month of expansion. Output growth remained strong, and employment rose to an eight-month high amid rising workloads. However, backlogs persisted despite higher hiring and purchasing. Input costs surged on currency weakness and raw material prices, pushing output inflation higher. Business sentiment stayed positive but weakened for a third month.

Domestic Economy

Major updates during the week:

  • Nigeria’s headline PMI rose to 54.2 in April 2025, marking five straight months above the 50-point mark as strong demand, rising output, and higher new orders drove private sector expansion and job creation to an eight-month high.
  • The AfDB has unveiled a new five-year Country Strategy Paper for Nigeria (2025–2030), committing $650m annually—plus $3.21bn in co-financing—to boost inclusive growth, close infrastructure gaps, create jobs, and align with national development goals without adding to the country’s debt burden.
  • The NDIC has begun disbursing ₦46.6bn as the first tranche of liquidation dividends to uninsured depositors of defunct Heritage Bank.

Nigerian Equity Market: Bullish consumer goods sector and Q1 earnings momentum lift NGX

Despite the Workers’ Day holiday-shortened week, the Nigerian equities market sustained its upward trajectory, buoyed by investor confidence, dividend declarations, and strong Q1 2025 earnings. The NGX All-Share Index (ASI) rose by 0.27% week-on-week to close at 106,042.57 points, with market capitalisation climbing to ₦66.65 trillion. Top gainers included NB (+17.95%), MTNN (+4.08%), INTBREW (+14.29%), and NAHCO (+20.17%), while DANGSUGAR (-9.21%), ETI (-18.75%), ACCESSCORP (-7.98%), and ARADEL (-9.86%) led the laggards. Sector performance was largely bearish, with only two of the five major indices closing in the green. The Consumer Goods sector led gainers with a 2.89% WoW increase, while the Oil and Gas sector declined the most, shedding 2.90% WoW.

Nigerian Fixed-Income market: DMO issues ₦714 billion treasury bills at the primary market auction.

Trading activity was relatively mixed during the week, with moderate interest observed in the fixed income market. In the Treasury bills segment, the market ended on a mildly positive note as investors selectively picked maturities, pushing the average yield down by 6 basis points to 20.88%. On the bond front, despite a primary market auction where the DMO raised ₦398 billion from ₦495 billion in bids—maintaining stop rates at 19.00% and 19.99% for the 2029 and 2033 tenors respectively—investor participation remained subdued, leading to a slight uptick in average bond yields to 19.04% from 19.02% previously. Meanwhile, the Eurobond market turned bearish, with Nigeria’s average Eurobond yield rising by 58 basis points to 10.63%, as investors began to factor in the potential impact of a U.S. recession on Sub-Saharan African Eurobond valuations.