DMO to auction N450bn bonds as CBN launches FX code

The Debt Management Office (DMO) will today auction three tranches of Federal Government of Nigeria (FGN) bonds worth N450 billion, while the Central Bank of Nigeria (CBN) is set to officially launch the Nigerian Foreign Exchange (FX) Code.

Meanwhile, the naira is expected to remain stable in the N1500 region, with analysts projecting further appreciation based on the success of recent reforms.

Monday, January 27

DMO to auction N450bn FGN bonds

The Debt Management Office will be issuing three tranches of FGN bonds worth N450 billion today.

The issuance includes the reopening of a five-year N100 billion bond, a seven year bond, valued at N150 billion and a new 10-year bond worth N200 billion.

At the last auction in December, DMO sold N51.86 billion worth of the Apr 21 (five-year bond), less than the amount offered.

While on its longest tenure Feb 31s (reopened seven-year bond), it sold N159.29 billion, more than double its offer in the December FGN bond auction.

On the debt front, the government will likely borrow about N9.16 trillion from the domestic market.

Considering these factors, CardinalStone projects a moderation in yields later in the year as the CBN is likely to retain some low liquidity tolerance from the context of ensuring rollovers, and a lower borrowing compared to 2024 assuming the issuance of N2.0 trillion in dollar-denominated bonds, leaving a balance of N7.16 trillion to be a split of NTB and bonds

Tuesday January 28

CBN to launch Nigerian Foreign Exchange (FX) Code

The Central Bank of Nigeria (CBN) is set to officially launch the Nigerian Foreign Exchange (FX) Code on Tuesday. The FX Code is designed to provide ethical guidelines for authorised dealers in the Nigerian FX market, promoting responsible market conduct.

The CBN has scheduled the official launch for Tuesday, January 28, 2025, at its head office auditorium in Abuja. This launch follows the CBN’s ongoing efforts to strengthen governance and transparency in the FX market, including the introduction of updated guidelines in November 2024.

A major aspect of the revised guidelines requires the boards of banks, along with their Chief Executive Officers (CEOs) and Chief Compliance Officers, to annually attest to their adherence to the Nigeria FX Code of ethics and conduct. This attestation serves as a commitment to maintaining market integrity and complying with all CBN regulations.

These revised guidelines aim to further develop Nigeria’s FX market, particularly after the consolidation of all official FX market windows. The circular issued by Omolara Omotunde Duke, director of the CBN’s financial markets department, replaces earlier directives, including the operational changes from June 14, 2023, and other previous circulars dating back to 2017.

Under the new framework, authorised dealers are required to facilitate FX transactions for both businesses and individuals while ensuring full compliance with regulations. Dealers must conduct proper due diligence, offer transparent pricing, and provide access to the market via digital solutions. Additionally, all legitimate FX transactions must occur exclusively through authorised dealers, with transactions through unlicensed intermediaries strictly prohibited.

The new guidelines also apply to Bureaux De Change (BDC) operators. Licensed BDCs can purchase FX from authorised dealers to meet customer demands, within the limits set by the CBN. Similarly, all FX transactions conducted by BDCs, International Money Transfer Operators (IMTOs), and authorised dealers must comply with their licenses and the Nigeria FX Code.

Wednesday January 29

US Fed likely to hold rates at its first meeting this year

The Federal Open Market Committee (FOMC) will be meeting on Wednesday for rate decisions with anticipations of maintaining rates after a rate cut in December.

Many analysts expect the Fed to hold rates steady at a target of 4.25 percent to 4.50 percent.

The FOMC serves as the monetary policy-making arm of the Federal Reserve System, and its decisions have far-reaching implications for the U.S. economy and economies whose currencies are pegged to the US dollars.

The US consumer price index surged to 2.9 percent in December compared to the previous rate increase of 2.7 percent, according to the U.S. Labor Department data. The pace of inflation remains higher than the Federal Reserve’s target rate of 2 percent per annum.

However, President Donald Trump said he’ll “demand that interest rates drop immediately ” in his first week in office.

“The FX Code is designed to provide ethical guidelines for authorised dealers in the Nigerian FX market, promoting responsible market conduct.”

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Thursday, January 30

US to release Q4 GDP report

The Bureau of Economic Analysis will release the US Gross Domestic Product (GDP) for the fourth quarter of 2024 on Thursday.

The US GDP increased at a 2.8 percent annualized rate in the third quarter, below the 3.1 percent estimate and the 3.0 percent reading Q2.

Consumer spending and federal government outlays were two of the biggest contributors to GDP growth.

The release comes with the Federal Reserve poised to lower interest rates further despite the seemingly strong economy and inflation that remains above target.

The International Monetary Fund on Thursday projected that the US economy is expected to grow by 2.7 percent in 2025, revised upward by 0.5 percentage point, according to its January World Economic Outlook.

The IMF reported that the projection reflects a carryover from 2024, as well as robust labor markets and accelerating investment, among other signs of strength.

Naira to remain stable at N1500 region

Naira to remains stable at N1530-N1550

Since the introduction of Electronic Foreign Exchange Matching System (EFEMS) launched in December last year, naira’s volatility is gradually being subdued by the transparency and efficiency in the market.

The local currency appreciated by N125 to a dollar one month after the EFEMS was adopted, according to a BusinessDay’s report with analysts saying the gains might be an indication that the naira’s rebound journey might just have begun.

In addition the Nigerian Economic Summit Group (NESG) on Thursday projected a notable appreciation of the naira to an average exchange rate of N1,300 to the US dollar in 2025, provided the country adheres to an optimal stabilisation pathway.

The optimistic forecast is anchored on expected increase in foreign exchange earnings driven by higher crude oil sales, revitalised manufacturing output from the oil refining sub-sector, and improved agricultural productivity. With crude oil remaining Nigeria’s largest export, stable global demand and enhanced local production are anticipated to bolster export revenues significantly.

The naira closed the trading week on Friday at N1,531 per dollar in the official foreign exchange (FX) market, showing an improvement compared to the previous week.

This marked an appreciation of 1.1 percent week-on-week, as the dollar was quoted at N1,531, which was N17 stronger than the N1,548 rate observed the previous Friday at the Nigerian Foreign Exchange Market (NFEM), according to data from the Central Bank of Nigeria (CBN).

Beyond oil: Investing in Nigeria’s human capital

Nigeria’s potential as a global economic force lies not in its oil reserves or arable land, but in its people. With a population exceeding 220 million, the country is blessed with the world’s largest Black workforce, most of it youthful and vibrant. Yet, this immense demographic advantage remains woefully underutilised, even as the nation grapples with rising unemployment and economic stagnation. At a time when human capital drives global growth, Nigeria is failing to harness its greatest resource. Why?

Despite a labour force of over 80 million, unemployment stands at a staggering 33 percent, with underemployment adding another 22.8 percent. The systemic inefficiency of workforce utilisation is compounded by a skills mismatch that leaves businesses struggling to find qualified talent domestically. While Nigerian professionals shine abroad—from Victor Osimhen’s achievements on the football pitch to Dr Oluyinka Olutoye’s groundbreaking work in medicine—critical sectors at home remain starved of expertise. The brain drain continues unabated, with over 11,000 Nigerian doctors practicing in the UK alone, according to the General Medical Council. This exodus leaves healthcare, education, and other vital sectors in a perpetual state of crisis.

The issue is not a lack of ambition among Nigerians but a failure of systems and structures. Nigeria’s education system churns out graduates, but employers lament the lack of industry-ready skills. Local industries, including construction, rely on artisans from neighbouring countries for basic tasks such as tiling and plastering. Meanwhile, burgeoning sectors like technology face a critical shortage of expertise in areas such as cybersecurity, data analytics, and cloud computing.

This state of affairs demands urgent, multi-pronged action. The government has launched initiatives, such as the Federal Ministry of Communications, Innovation & Digital Economy’s 3MTT programme, aimed at filling two million tech jobs by 2025. However, these efforts are narrow in scope and insufficiently scaled. More comprehensive reforms are needed, beginning with an overhaul of the education system to align curriculum with industry demands. Partnerships between educational institutions and businesses can bridge the skills gap, particularly in priority sectors such as ICT, agriculture, and trade.

Local governments must also play a pivotal role. Subsidising vocational training and establishing skills centres can make a significant difference, particularly for marginalised groups such as women, minorities, and people with disabilities. The private sector, too, must take responsibility, not only by funding workforce development programmes but also by actively creating pipelines for local talent through apprenticeships and internships.

But the most important shift must come from individuals themselves. Continuous learning is no longer optional in today’s fast-evolving global economy. Nigerians must embrace opportunities to upskill, whether through online courses or community-based training programmes. Equipping oneself with in-demand skills—digital marketing, software development, or even sustainable agriculture—is as much an act of self-empowerment as it is a contribution to national development.

Nigeria’s untapped talent is not just an economic liability; it is a moral failing. A country that exports its brightest minds while importing basic skills undermines its own sovereignty and future. The narrative must change. By prioritising human capital development, Nigeria can unlock unprecedented economic growth, reduce dependency on foreign expertise, and secure a more prosperous future.

The road ahead demands a concerted and comprehensive approach. The government has a crucial role to play in creating an enabling environment for human capital development. This includes investing in quality education, implementing sound policies, and creating a conducive business environment. Investing in quality education involves reforming the education system to prioritise critical thinking, problem-solving, and skills relevant to the 21st-century job market. This involves robust vocational training programs, partnerships with industries, and ensuring access to quality education for all, regardless of their background. The government should also implement sound policies that incentivise businesses to invest in local talent, such as tax breaks for companies that offer training programs and hire locally. The government should also actively combat corruption and ensure transparency in all its dealings, fostering trust and confidence among citizens. Creating a conducive business environment includes reducing bureaucratic hurdles for businesses to operate, improving infrastructure, and ensuring access to affordable and reliable internet connectivity, which are crucial for attracting investment and creating jobs.

Businesses must also shoulder their responsibilities. This includes investing in employee development, creating inclusive workplaces, and engaging with educational institutions. Investing in employee development involves providing opportunities for employees to upskill and re-skill through training programs, workshops, and mentorship initiatives. Creating inclusive workplaces involves fostering a diverse and inclusive work environment where all employees, regardless of their background, have equal opportunities to succeed. Businesses should also engage with universities and colleges to design curricula that meet the needs of the modern workforce.

Ultimately, individual empowerment is key. Nigerians must embrace lifelong learning, develop entrepreneurial skills, and engage in civic participation. Continuously upgrading their skills through online courses, workshops, and other avenues of learning is crucial. Cultivating a spirit of innovation and entrepreneurship can create new jobs and drive economic growth. Actively participating in the political process and holding leaders accountable for their actions is crucial for creating a society that prioritises human capital development.

The time for action is now. Nigeria stands at a crossroads. The nation can choose to squander its most valuable resource—its human capital—or it can embark on a transformative journey that unleashes the potential of its people. By fostering a culture of learning, innovation, and collaboration, Nigeria can emerge as a global leader in the 21st century. The question is: Will Nigeria rise to the occasion and seize this historic opportunity?