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Nigerian Stock Markets Shrug Political Risk, Naira Steady

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By Lukman Otunuga, FXTM Research Analyst

The Nigerian equities market has repeatedly displayed resilience against both external and domestic risks since the start of 2019.

Global growth concerns, U.S.-China trade tensions, and other geopolitical risk factors remain a drag on global risk sentiment. However, the Nigerian stock markets have recorded an impressive YTD growth of roughly 3.31% despite global headwinds and mounting political risk ahead of the presidential elections. With domestic investors seen bargain hunting as the elections loom, the All Share Index (ASI) is seen pushing higher.

While the Naira continues to witness stability against the Dollar, volatility could be in the cards depending on the election outcome. A perceived market-friendly result will be positive for the local currency.

Investors on the sidelines

Investors in Asia are sitting on the sidelines as they cautiously await the outcome of high-level trade talks between the U.S. and China. With the earnings season almost coming to an end, asset prices will begin to fluctuate on daily news headlines. So far, it seems we have more positive than negative news which may continue to support equities.

President Donald Trump is willing to extend the trade deal deadline if the two parties seem to be coming closer to a resolution. A good outcome from the expected meeting on Friday between China’s President Xi Jinping and his counterparts U.S. Treasury Secretary Steven Mnuchin and trade representative Robert Lighthizer may further prolong the rally in global equities.

Mr. Trump also intends to sign a U.S.-Mexico border security deal despite the fact he’s not happy with it. Any news on avoiding another shutdown is welcomed by the markets.

On the data front, U.S. consumer prices remained steady for a third straight month in January. Stable prices have led y-o-y CPI to grow at its slowest pace in one and a half years suggesting that the Fed may keep interest rates on hold for some time if the economic outlook deteriorates further. However, the Dollar reacted positively to the data, given that when excluding the volatile components such as food and energy, the core-CPI stood at 2.2%. Such information may be conflicting in a sense that headline inflation doesn’t require further tightening in monetary policy, while core inflation indicates that we cannot rule out further hikes later this year.

Commodity currencies were the main beneficiaries of stronger than expected Chinese data earlier today. Chinese exports rebounded sharply in January rising 9.1% y-o-y beating consensus of a 3.2% decline by a wide margin.  Imports, while dropping by 1.5%, also showed much better than the expected 10% decline. The Australian Dollar and New Zealand Dollar were up 0.5% at the time of writing.

The Euro continued to struggle despite the improved appetite to risk. The single currency tested 1.1249 earlier today on the back of a series of disappointing data releases and political uncertainty. The latest political drama comes from Spain, which is heading into a snap election following a budget defeat. If a right-wing coalition takes over, expect to see more troubles ahead in the Eurozone. Other factors that contributed to Euro weakness include the continued plummeting of German Bond Yields. All maturities below 10-years are currently in negative territory, while 10-year yields are just 12 basis points above the zero line, compared to 2.7% in the U.S. All eyes are going to be on German GDP today to see if the country manages to escape a technical recession. Meanwhile, the Eurozone economy is expected to have grown 0.2% in Q4.


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E-Financial

NBS Reports ₦6.72 Trillion VAT Haul as Tax Reforms Pay Off

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Nigeria’s Value Added Tax (VAT) revenue surged to ₦6.72 trillion in 2024, marking an 84.6% increase from ₦3.64 trillion in 2023, according to the National Bureau of Statistics (NBS). This sharp rise reflects stronger economic activity and improved tax collection efforts across key sectors.

VAT revenue showed consistent growth throughout the year. In Q1 2024, collections stood at ₦1.43 trillion. This rose to ₦1.56 trillion in Q2, representing a 9.09% increase. Q3 recorded ₦1.78 trillion, up 14% from the previous quarter, while Q4 peaked at ₦1.95 trillion, a 9.5% rise from Q3.

In Q4 alone, VAT collections totaled ₦1.95 trillion, with domestic VAT payments contributing ₦917.40 billion, non-import foreign VAT at ₦554.68 billion, and import VAT at ₦474.75 billion. Domestic VAT remained the largest source, indicating strong local business activity and consumer spending.

Several sectors posted significant quarter-on-quarter growth in Q4. Extraterritorial organisations and bodies saw a dramatic rise of 180.05%, followed by agriculture, forestry and fishing at 70.83%, and human health and social work at 46.13%. These gains suggest increased operational scope, improved compliance, and possibly targeted government incentives.

However, not all sectors fared well. Households as employers and self-use production contracted by 28.97%, while the information and communication sector declined by 23%. The drop in ICT may reflect shifting market dynamics or regulatory headwinds affecting digital services.

Overall, the surge in VAT revenue signals a positive fiscal outlook for Nigeria, with implications for budgetary planning, infrastructure investment, and social services funding. It also highlights the importance of sector-specific monitoring to sustain momentum and address emerging challenges.


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FIRS Unveils e-Invoicing, Electronic Fiscal System for Large Taxpayers

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Federal Inland Revenue Service (FIRS) has commenced an electronic invoicing solution (e-invoicing) aimed at transforming digital tax administration and revolutionising tax payment in Nigeria.

FIRS Unveils e-Invoicing, Electronic Fiscal System for Large Taxpayers

The e-invoicing system, also known as the Merchant-Buyer Model, is designed to make tax compliance easier, faster and more transparent for all categories of taxpayers.

A statement by Dare Adekanmbi, special adviser on Media to Zacch Adedeji, chairman, FIRS, said the solution went live on August 1, following a successful pilot phase which began in November 2024.

According to the statement, large taxpayers, which are companies with annual turnover of N5 billion and above, are the first to be onboarded. In less than two weeks after the initiative went live, no fewer than 1,000 companies, representing 20 per cent of over 5,000 eligible firms, have embraced the solution and commenced integration with the FIRS MBS platform.

It noted that the remaining large taxpayers are expected to come onboard on or before November 1, the deadline for all firms in the category to complete their onboarding and integration processes.

“MTN Nigeria became the first taxpayer to transmit live electronic invoices to the FIRS, officially ushering in the e-invoicing regime. Huawei Nigeria and IHS Nigeria have also concluded test transmissions and are set to go live in the coming days.

“In collaboration with the National Information Technology Development Agency (NITDA), Service Providers have been incorporated into the ecosystem to act as both System Integrators and Access Point Providers. These providers will facilitate the onboarding, integration, and invoice transmission processes for taxpayers.”

The statement commended all large taxpayers, tax consultants, and service providers for their cooperation and commitment to the success of the project.

“We also acknowledge the genuine efforts of many taxpayers who strove to meet the 1st of August 2025 deadline but encountered operational constraints.

“In the spirit of encouraging voluntary compliance, the FIRS management has graciously approved a three-month extension of the deadline, with the new deadline now set for 1st November 2025.

“The FIRS e-Invoicing Implementation Team will continue to provide support through stakeholder engagements, including webinars, workshops, and town hall meetings, to ensure a seamless transition for all large taxpayers,” it added.

The national e-invoicing solution is an electronic fiscal system (EFS) developed by FIRS to provide real-time visibility into commercial transactions and ensure the authenticity, accuracy and completeness of invoices.

It is being implemented in phases, starting with large taxpayers, with medium and emerging groups to follow.

The initiative aligns with global best practices and supports the Federal Government’s broader objectives of enhancing revenue assurance, reducing tax evasion, and modernising tax administration.

It is also a critical tool in the implementation of the Nigeria Revenue Services Reform Act, which seeks to harmonise revenue reporting and establish a single source of truth for government revenues.

 

 

 

 


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First Securities Secures Remarkable Position in NGX Performance Report

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First Securities Brokers Limited, the stockbroking subsidiary of First Holdco Plc, recently announced its impressive performance in the latest Nigerian Exchange (NGX) Broker Performance Report. The firm secured first place in terms of trading volume and value of transactions for the month of July, 2025.

According to the report, First Securities Brokers Limited displayed strong trading activity and strategic market positioning, further solidifying its reputation as a significant player in the capital and equities market.

Fiona Ahimie, Chief Executive Officer and Managing Director of First Securities Brokers Limited expressed her pleasure at the firm’s achievement of a trading value of ₦414.457 billion, which accounts for 22.80% of the total trading value reported by the NGX during the review period. This performance highlights the effectiveness of the integrated model promoted by First Holdco Plc.

The Holding Company’s strategic focus on synergy within the Group played a crucial role in enhancing the performance of First Securities Brokers Limited.

“This remarkable achievement reflects the hard work and dedication of our entire workforce, as well as the trust our clients continue to place in us. It underscores our growing influence and effectiveness in the Nigerian equities market,” she added.

“Our focus on providing innovative and seamless trading solutions, coupled with deep market expertise, has been crucial to driving this success. We are not just a brokerage firm; we are strategic partners in our clients’ financial journeys. This recognition further motivates us to deliver exceptional value.”

“We remain committed to creating long-term value for our clients and stakeholders. Building on this momentum, we will continue to enhance our service offerings and further establish our position as a key driver of growth and development in the Nigerian financial market.”

 


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