If you own Nigerian stocks, you’ve just experienced one of the strongest three-week rallies we’ve seen since the calendar flipped to 2026. The NGX All-Share Index keeps climbing, and every time it looks like it might pause, another wave of buying pushes it higher.
Meanwhile, across the Atlantic, policymakers spent the last week digesting a flood of new data. US growth slowed to its weakest pace since the pandemic. The UK is watching inflation cool faster than expected. And Egypt’s labour market keeps tightening even as the broader economy works through structural challenges.
Here’s a breakdown of what happened last week.
Global Economy
US: The Tariff Hangover Arrives
The US economy expanded by 2.2% in 2025, down from 2.8% in 2024. That’s the weakest annual growth rate since the 2.1% contraction during the pandemic in 2020. Consumer spending and business investment remained solid, but those positives were offset by what happened with trade and government spending.
Tariffs played a bigger role than most people realized. When the US rolled out tariffs in the first half of 2025, businesses and households rushed to buy goods before prices went up. That meant imports surged to record highs, widening the trade deficit and dragging down overall GDP growth. It’s the classic unintended consequence of protectionist policy.
The federal government also contracted spending amid what became the longest government shutdown on record. Public sector employment fell as aggressive downsizing efforts, including buyouts and restructuring initiatives led by the Department of Government Efficiency, reduced the federal workforce. When government spending contracts and trade policy disrupt normal import patterns, it shows up in the GDP numbers.
Residential investment also declined, adding another drag on growth. The combination of these factors turned what could have been a solid growth year into the weakest performance since the pandemic.
UK: Inflation Falls to Ten-Month Low
UK consumer price inflation eased to 3.0% in January, down from 3.4% in December and in line with market expectations. This marks the lowest annual inflation rate since March 2025. This wasn’t a surprise to markets, but it matters because it confirms that the Bank of England’s restrictive monetary policy is actually working.
The decline was driven primarily by softer increases in transport and food prices, the two categories that hit household budgets hardest. Transport costs rose by 2.7% year-over-year, slowing sharply from 4.0% in December. Fuel prices fell and airfare inflation moderated, giving consumers some relief. Food and non-alcoholic beverage prices increased by 3.6%, down from 4.5% the previous month. Inflation also eased in housing and utilities, falling to 4.5% from 4.9%, and recreation and culture, falling to 2.6% from 2.7%.
Core inflation, which excludes food and energy, declined to 3.1% in January. That’s the lowest level since August 2021 and suggests underlying price pressures are gradually moderating. On a monthly basis, consumer prices actually fell by 0.5%, reversing a 0.4% increase recorded in December.
The one area where prices accelerated was restaurants and hotels, which saw inflation rise to 4.1% from 3.8%. That’s a reminder that services inflation tends to be stickier than goods inflation, even when the broader trend is downward.
Sub-Saharan African Economies
Eurobond yields across major Sub-Saharan economies showed mixed movements week-on-week:
Nigeria: Ten Months of Progress
Nigeria’s inflation rate dropped to 15.10% in January from 15.15% in December. That marks the tenth consecutive monthly decline and the weakest reading since November 2020.
If you’ve been following these reports, you know this trend has been building for months, supported in part by currency strength. When the naira holds its value, imported goods don’t get more expensive, and that takes pressure off overall inflation.
Food inflation continued to ease, falling to 8.89% as the supply of key staples improved. That’s meaningful because food makes up the largest share of the average Nigerian household’s spending. Disinflation was also recorded across recreation and culture, clothing and footwear, and alcoholic beverages and tobacco. Education costs were the outlier, accelerating during the month.
Core inflation, which strips out volatile food and energy prices, moderated to 17.72%. That’s the lowest reading since October 2022. On a monthly basis, the Consumer Price Index actually contracted by 2.88%, reversing the previous month’s increase. A month-over-month contraction in CPI is rare and signals that price pressures are genuinely easing, not just slowing.
What does this mean for you? The combination of falling inflation and naira stability creates space for the Central Bank to maintain its current policy stance or even consider easing if the trend holds. Lower rates make equities more attractive relative to bonds, which is helping fuel the current stock market rally. The macro environment is improving, and markets are already pricing in that possibility.
Egypt: Jobs Remain Plentiful Despite Economic Headwinds
Egypt’s unemployment rate declined to 6.2% in Q4 2025, down from 6.4% in Q3 and close to the record low of 6.1% recorded in Q2. The labour market remained resilient toward year-end despite broader economic challenges. The improvement was broad-based across gender lines. Male unemployment fell to 3.8%, while female unemployment eased to 14.3%, both lower on a quarterly and annual basis.
Total employment rose to 32.677 million, supported by a net increase of 179,000 employed persons. At the same time, the number of unemployed declined by 77,000. The labour force expanded modestly by 0.3% to 34.829 million, reinforcing evidence of steady labour absorption.
A tight labour market like this usually puts upward pressure on wages, complicating inflation management. But for now, Egypt is managing to keep unemployment low while also bringing inflation down through interest rate cuts. That’s a rare combination and signals improving policy coordination.
Domestic Economy
Major Updates During the Week
1. Public Debt Hits ₦153.29 Trillion
Nigeria’s total public debt stock now stands at ₦153.29 trillion. That number includes both domestic and external debt across federal and state governments. The figure keeps rising as governments borrow to fund budget deficits and infrastructure projects.
2. Executive Order on Oil Revenue Remittance
The Federal Government issued an Executive Order directing the direct remittance of oil and gas revenues to the Federation Account. This is about transparency and accountability. Previously, oil revenues could pass through multiple accounts before reaching the Federation Account, creating opportunities for leakages and delays. Direct remittance means the money goes straight to where it’s supposed to go, and states get their allocations faster.
3. Naira Strengthens to ₦1,340 Per Dollar
The naira strengthened to about ₦1,340 per dollar at the parallel market, supported by higher dollar sales from the Central Bank of Nigeria and stronger foreign exchange reserves. This is significant because parallel market rates are what most Nigerians experience when they need foreign currency for travel, school fees, or imports. A stronger naira at the parallel market means imported goods get cheaper, and inflation pressure eases. Stability is likely to continue in the near term as long as the CBN maintains dollar supply and reserves stay healthy.
Equity Market: Third Consecutive Week of Strong Gains
The Nigerian stock market closed bullish for the third straight week, extending prior gains on broad-based buying interest and stronger trading activity across sectors. The NGX All-Share Index advanced by 6.94% to close at 194,989.77 points, up from 182,313.08 the previous week. Market capitalization rose by 6.94% to ₦125.16 trillion from ₦117.03 trillion.
Year-to-date returns now stand at 25.30%. If you invested in a broad Nigerian equity index at the start of January, you’re up more than a quarter in less than two months. That kind of performance doesn’t happen often, and it’s attracting attention from both local and foreign investors who missed the early move.
Market breadth was firmly positive, with 70 stocks advancing and 41 declining. The gainers’ list was led by notable names including REDSTAREX, CUSTODIAN, NASCON, PRESCO, BETAGLAS, NESTLE, and DANGCEM. These are large-cap, liquid stocks that pension funds and foreign investors can move size in. On the losing side, MECURE, MULTIVERSE, CAP, MAYBAKER, and IMG led declines.
All major sectors closed in positive territory. The Oil and Gas index gained 8.66% week-on-week, continuing its strong performance as investors bet on sustained production improvements and favorable global oil prices. When all sectors are green, and market breadth is this positive, it signals broad confidence rather than narrow speculation in a few names.
Fixed Income Market: Yields Plunge on Massive Demand
The second Treasury Bills auction for February 2026 drew exceptional demand. The Debt Management Office (DMO) issued ₦1.9 trillion against subscriptions of ₦4.2 trillion. That’s more than double oversubscription, reflecting robust system liquidity and strong investor appetite for Nigerian government debt. Investors are scrambling to secure allocations because they believe yields are headed lower and want to lock in current rates before that happens.
Stop rates declined sharply. The 91-day Treasury bill fell by 4 basis points to 15.80%. The 364-day bill dropped by 109 basis points to 15.90%. That’s more than a full percentage point decline in the one-year rate in a single auction. When stop rates fall that much, it means the government can borrow more cheaply, which reduces debt servicing costs.
The bullish sentiment extended into the secondary market.
- Average Treasury Bill yields compressed by 10 basis points week-on-week to 17.45%.
- Government bonds followed the same pattern, with average yields declining by 9 basis points to 16.02%.
- Nigeria’s Eurobond segment also rallied, with average yields declining by 11 basis points to 6.89%.
When yields are falling across the entire curve like this, it reflects improving sentiment about Nigeria’s credit profile and macro stability. Investors are willing to accept lower returns in exchange for what they perceive as lower risk.
The Bottom Line
This market momentum doesn’t happen in isolation. It occurs when multiple factors align at the same time, and the pension fund reforms from earlier this month are still working their way through the system, bringing institutional money into equities on a scale the market hasn’t seen in years.
The question facing investors now is whether this momentum can sustain itself or whether markets have gotten ahead of fundamentals. Policy signals remain supportive, and macro data continues improving. But markets that move this fast in such a short period tend to consolidate before the next leg higher.
How long that consolidation takes, and whether it’s shallow or deep, will depend on whether the improvements in inflation and currency stability are durable or temporary.
