Global Economy

US: The Federal Reserve concluded its final meeting of the year and, as was widely expected, announced that it would lower its target range for the federal funds rate by 25 basis points to the 3.50%–3.75% range. Notably, however, three policymakers dissented for the first time in six years, with two officials favoring no change to the policy rate and one preferring a 50-basis-point cut. The central bank’s policy statement also included language that has previously signaled a pause in policy actions, noting that policymakers “will carefully assess incoming data” to determine “the extent and timing of additional adjustments to the target range.” Fed Chair Jerome Powell’s post-meeting press conference offered somewhat mixed messages, though ultimately appeared to be less hawkish than some investors were anticipating. While Powell noted that the fed funds rate is “within a broad range of estimates of its neutral value” and that policymakers are “well positioned to wait and see how the economy evolves,” he also referenced concerns about “significant downside risks” to the labor market.

Sub-Saharan African Economies

UK: The UK economy grew by a modest 0.1% in Q3 2025, slowing from 0.3% in Q2 and missing expectations of 0.2%, according to preliminary ONS data. Output was dragged by a 0.5% contraction in the production sector, led by weaker manufacturing and mining, with motor vehicle production sharply lower following a cyberattack that disrupted Jaguar Land Rover’s operations. Services grew 0.2%, supported by arts, entertainment, recreation, and real estate, although professional and technical activities declined, while construction recorded marginal growth of 0.1% driven by repair and maintenance work. On the expenditure side, stronger investment, consumption, and net trade were partly offset by declines in inventories and valuables, leaving annual GDP growth at 1.3%, slightly below market forecasts.

Angola: Angola’s annual inflation rate eased further to 16.56% in November 2025, the lowest level since September 2023, extending the disinflation trend seen since August 2024 and supported by a stable kwanza. Price pressures moderated across most CPI components, including food and non alcoholic beverages at 16.87% from 17.76% in October. On a monthly basis, consumer prices rose by 0.85%, slowing from a 0.93% increase in the prior month.

Kenya: The Central Bank of Kenya cut its benchmark interest rate by 25 bps to 9% at its December 2025 meeting, marking the ninth consecutive rate reduction, as it continues efforts to stimulate bank lending to the private sector and support economic activity. Governor Kamau Thugge noted that the move would also help keep inflation expectations firmly anchored and maintain exchange rate stability. Kenya’s annual inflation rate eased to 4.5% in November from 4.6% in the previous two months and has remained below the 5% midpoint of the central bank’s target band since mid 2024.

Egypt: Egypt’s annual urban inflation eased to 12.3% in November 2025 from a three month high of 12.5% in October and came in below market expectations of 13.1%, according to CAPMAS. The slowdown was driven mainly by softer food price increases of 0.7% compared with 1.5% in October, the lowest since April 2021.

 

Domestic Economy

Major updates during the week:

  • Nigeria’s federal government launched the power sector liquidity bond, designed to settle the ₦4 trillion outstanding debt to generation companies.
  • CBN announced the newly approved 82 Bureau de Change operators in Nigeria
  • Nigeria records a trade surplus of ₦6.69 trillion in the third quarter of 2025, at a 27.29% growth rate.
  • The Nigerian Senate received the 2026–2028 MTEF/FSP this week, kicking off the 2026 budget cycle with projected ₦50.74 trillion revenue, 4.68% growth, and conservative oil and FX assumptions to support economic recovery.

Nigerian equity market: Equities close higher despite mixed market breadth

The Nigerian equities market sustained its positive momentum into the second week, closing higher on three of the five trading sessions, driven by renewed buying interest in the Insurance, Consumer Goods and Industrial Goods sectors. The benchmark All-Share Index advanced 1.63% to 149,433.25 points, while market capitalisation rose 1.64% to ₦95.26 trillion. Market breadth remained positive, with 49 equities recording gains, led by MECURE, PZ, MTNN, BERGER and DANGSUGAR. However, 41 stocks closed lower, with declines led by ETERNA, UACN, TRANSCOHOT and CUSTODIAN. Sectoral performance was largely upbeat, as three of the five major indices ended in positive territory, led by the Insurance sector with a 3.40% WoW gain. Overall, the market’s performance reflects sustained investor confidence and selective accumulation across key sectors.

Nigerian fixed-income market: DMO issues new 1-year treasury bill at 17.95% (versus 17.50% previously)

At the second treasury bills auction in December, market bids reflected continued bearish sentiment, allowing the DMO to raise ₦788 billion against the ₦750 billion offered, despite total bids of ₦1.69 trillion. Stop rates for the 91-day and 182-day bills remained steady at 15.30% and 15.50%, respectively, while the 364-day bill rose sharply by 45bps to 17.95%. Following the auction, bearishness persisted in the secondary market, with T-bill yields averaging 17.72%, largely supported by long-tenor instruments as investors sought to lock in elevated rates. A similar trend was observed in the bond market, where average yields increased 99bps WoW to 16.63%. Nigeria’s Eurobonds also strengthened slightly, with yields rising 7bps to an average of 7.14%. Overall, we expect the domestic fixed-income market to maintain its bearish tone next week as investors continue to demand higher yields.