CAPITALDIGEST DAILY NEWS, 02/02/2026

TAX REFORMS CAN UNLOCK OIL, GAS VALUE

Stakeholders in Nigeria’s oil and gas industry have said recent fiscal reforms, particularly the Nigeria Tax Act 2025, hold significant potential to unlock value across the country’s energy value chain if effectively implemented. They made this known at the 2026 Oil and Gas Symposium organised by the Nigerian Institution of Petroleum Engineers in Abuja, where industry players converged to examine how tax reforms, innovation, and engineering efficiency can reposition Nigeria’s energy sector for sustainable growth. In a statement, the National Chairman of NIPetE, Dr Yetunde Aladeitan, was quoted as saying that Nigeria’s energy future must move decisively away from crude oil dependency towards value-driven, innovation-led growth. Aladeitan, an associate professor of petroleum engineering and Director of the Energy Research Centre at the University of Abuja, spoke while hosting the symposium, noting that her leadership of the institution had given her deeper insight into what she described as “a promising future” for Nigeria’s oil and gas sector. She, however, urged industry stakeholders to align with global trends and best practices in the sector, stressing that innovation and value optimisation must take precedence over reliance on crude exports. The high-level virtual symposium, themed ‘Beyond the Barrel: Tax Reforms, Value Chain Optimization, and the Future of Nigerian Energy’, brought together engineers, policymakers, fiscal experts, and industry practitioners to interrogate Nigeria’s evolving oil and gas landscape and identify sustainable pathways for long-term value creation. The Chairman of the occasion and President of the Nigerian Society of Engineers, Ali Rabiu, represented by the Deputy President, Valerie Agberagba, described the theme of the symposium as timely and critical. He stressed that Nigeria must urgently move away from over-dependence on crude oil revenues and instead pursue an innovation-driven and diversified energy ecosystem anchored on sound fiscal policies, gas development, and value-chain efficiency. Delivering the keynote address, Abudukerimu Sule, speaking on behalf of Mr Momoh Oyarekhua, provided insights into investment opportunities embedded in the Nigeria Tax Act 2025. He highlighted how tax reforms could stimulate upstream efficiency, attract both foreign and local investment, and strengthen Nigeria’s competitiveness in the global energy market. A panel session followed, featuring industry experts including Ehimhen Okoh-Agunloye, Bukola Olusola, Adesola Adebawo, Mrs Eyono Fatai-Williams, and Mr Abayomi Abiona. Discussions reportedly covered gas transition strategies, upstream and midstream optimisation, fiscal incentives, and the role of engineering innovation in driving sustainable energy development. Beyond the technical discussions, participants noted that the symposium reinforced Aladeitan’s long-standing position that Nigeria’s energy sector must focus on translating policy reforms into practical, measurable outcomes.

NAIRA BREAKS N1,400 BARRIER AT N1,396.99/$

Nigeria’s naira has traded below the N1,400/$1 level on the official market for the first time in over a year, marking a notable psychological and market milestone for the currency. Data from the Central Bank of Nigeria show that the Nigerian Foreign Exchange Market rate, the determining benchmark for the official market, strengthened to N1,396.99/$1 on Thursday, up from N1,400.48/$1 on Wednesday. This move confirms the naira’s return below N1,400/$1 after an extended period of trading above that level. Intraday trading on Thursday saw the naira reach a high of N1,400/$1 and a low of N1,367/$1 before closing at N1,385/$1. The latest outcome caps a steady appreciation trend over the week. The NFEM rate had been as weak as N1,422.07/$1 on 22 January and N1,421.63/$1 on 23 January before easing to N1,418.95/$1 on Monday and N1,401.22/$1 on Tuesday. It improved to N1,400.47/$1. The break below N1,400/$1 on Thursday, therefore, represents a clear improvement in official market pricing. At the parallel market, the naira also appreciated. According to Cowry Asset Management Limited, the naira strengthened by 1.06 per cent to N1,454/$ in the parallel market, “reflecting improved currency sentiment across both the regulated official segment and the informal foreign exchange market.” Speaking on the performance of the naira, the Chief Executive Officer of CFG Advisory, Tilewa Adebajo, highlighted the closing in the spread between the official and parallel market rates. “Using the midpoints of today’s quoted ranges, the premium of the parallel market over the official rate is roughly 6–7 per cent.” Looking further back, Adebajo said, “Official and parallel premium spreads have dropped from 64 per cent in 2022 to seven per cent in 2026.” The PUNCH reported that financial analysts had projected that the naira would trade within a predictable range this week, with movements largely dictated by FX supply conditions and liquidity dynamics in the official market. Thursday’s trading rate has extended the positive streak for the local currency seen across the different segments of the market.

FG’S N9TN DOMESTIC LOANS SURGE DRAINS LIFELINE FROM BUSINESSES

The Federal Government’s domestic borrowings from financial market operators rose sharply in 2025 despite high interest rates, widening the gap between public and private sector access to credit, according to data obtained from the Central Bank of Nigeria on Thursday. An analysis of money and credit statistics showed that credit to the Federal Government outpaced private sector borrowings by N9.19tn, representing a 695.6 per cent swing in 2025, reflecting heightened fiscal pressures and increased reliance on local funding sources. In contrast, net credit to the private sector declined by N1.543tn in 2025, highlighting the challenges faced by businesses amid tight monetary conditions and elevated interest rates. This divergence underscored a growing imbalance in the allocation of financial system resources, with the public sector absorbing a larger share of available liquidity. The trend points to a classic crowding-out effect, as rising government demand for funds limits banks’ capacity to extend credit to the productive sector, while many organised businesses increasingly prioritise settling existing debts rather than taking on new borrowing. The PUNCH reports that in monetary and financial statistics, credit to government refers to funds extended to the Federal Government by the domestic financial system, mainly through the purchase of government securities such as Treasury bills, bonds, and other debt instruments, as well as direct lending by banks and other financial institutions. This form of credit is typically used to finance budget deficits, refinance maturing obligations, support capital and recurrent expenditure, and manage short-term cash flow gaps when government revenues fall short of spending needs. Credit to the private sector, on the other hand, represents loans and advances granted by banks and other financial institutions to businesses, households, and non-government entities. It is primarily used to fund working capital, business expansion, investment in plant and machinery, trade, agriculture, services, and consumer spending. Growth in private sector credit is widely regarded as a key indicator of economic activity, as it supports production, job creation, and overall economic growth. In practice, when government borrowing from the financial system rises sharply, especially in a high-interest-rate environment, it can reduce the pool of funds available for private sector lending, a phenomenon often described as crowding out. This dynamic can raise borrowing costs for businesses and slow investment, even as the government secures financing to meet its fiscal obligations. An analysis of CBN money and credit statistics obtained showed that credit to the Federal Government rose by N9.192tn in 2025, while credit to the private sector declined by N1.543tn over the same period. The data highlight intensifying concerns over crowding-out effects, as the government’s rising appetite for domestic funds coincided with shrinking credit to businesses and households. According to the CBN data, credit to the public sector increased significantly in 2025, rising from N25.03tn in January to N34.22tn by December, translating to a N9.19tn increase within the year. It also represented an increase of N5.57tn, or nearly 154 per cent, compared with the N3.62tn government credit recorded in 2024. A month-on-month breakdown revealed that government credit stood at N25.03tn in January 2025 before rising by N2.08tn, or 8.3 per cent, to N27.11tn in February. This was followed by a contraction of N2.52tn (9.3 per cent) in March to N24.59tn, and a further dip of N655bn (2.7 per cent) in April to N23.93tn. Borrowing eased again in May, falling by N946bn (4.0 per cent) to N22.99tn, and declined by another N1.33tn (5.8 per cent) in June to N21.66tn, marking the lowest level for the year. Government credit rebounded in July, increasing by N2.03tn (9.4 per cent) to N23.69tn, before slipping by N740bn (3.1 per cent) to N22.95tn in August. The upward trend resumed in September, with credit rising by N1.21tn (5.3 per cent) to N24.16tn, followed by a N629bn (2.6 per cent) increase in October to N24.79tn. In November, borrowing grew further by N1.57tn (6.3 per cent) to N26.35tn, before surging sharply in December by N7.87tn, or 29.9 per cent, to close the year at N34.22tn. In contrast, net credit to the private sector contracted by N1.54tn in 2025, reflecting tight liquidity conditions and elevated borrowing costs. Private sector credit declined from N77.38tn in January to N76.26tn in February, representing a N1.12tn or 1.4 per cent drop. This was followed by a marginal decline of N276bn (0.4 per cent) in March to N75.98tn.

NGX MARKET CAP RISES BY N232B

The Nigerian Stock Exchange closed higher on Thursday, 29 January 2026, as investors responded to positive market sentiment despite a slowdown in trading activity. The total market capitalisation rose by N232bn, from N105.74tn on Wednesday, 28 January, to N105.97tn, representing a 0.22 per cent increase. Similarly, the All Share Index gained 362.93 points, moving from 165,164.38 to 165,527.31. Trading activity, however, experienced a decline compared with the previous session. A total of 550.4 million shares were exchanged in 38,635 deals, with a turnover of N14.14bn, representing a 12 per cent decline in volume, a 14 per cent drop in turnover, and an 8 per cent decrease in deals. In total, 131 equities participated in the session, with 41 gainers and 27 losers. Leading the gainers was RT Briscoe, which climbed 10 per cent to close at N7.15 per share, followed closely by SCOA Nigeria, up 9.91 per cent; Deap Capital Management & Trust, up 9.91 per cent; and Veritas Kapital Assurance, up 9.85 per cent. On the losing side, Haldane McCall led the laggards with a 9.84 per cent decline, closing at N3.94 per share, while Union Dicon Salt down 9.79 per cent, University Press down 8 per cent, and Legend Internet down 7.56 per cent also recorded significant losses. In terms of volume, Veritas Kapital Assurance topped the chart with 56.6 million shares traded, followed by Guaranty Trust Holding with 26 million shares, Tantalizers with 26 million shares, and Japaul Gold and Ventures with 25.9 million shares.

FG’S N105BN HOUSING BUDGET FAILS TO IMPRESS STAKEHOLDERS

The Federal Government has increased the budgetary allocation to the Federal Ministry of Housing and Urban Development by seven per cent, raising it from N98.13bn in 2025 to N105bn in the 2026 Appropriation Bill. Budget documents show that the allocation is intended to support housing delivery, urban renewal, renewable energy projects, and federal infrastructure nationwide. A breakdown reveals N8.05bn for 20,000 housing units under the Renewed Hope Agenda Housing Scheme, N3.74bn for ongoing projects under the National Housing Programme, and N2.1bn for prototype housing developments in Suleja, Niger State, and Ikorodu, Lagos State. Federal infrastructure projects also received allocations, with N840m earmarked for secretariat projects in 11 states. Road construction and rehabilitation projects attracted over N2.3bn across Kaduna, Sokoto, Ekiti, Borno, and other states. Renewable energy projects, particularly solar street lighting, were allocated N700m in Kaduna, N140m in Sokoto, and additional funds in 14 other states. Urban renewal and slum upgrading interventions also featured in the budget, alongside allocations for institutional reforms, capacity development, legal case prosecution, and digitalisation of housing and land administration records. Despite the increase, stakeholders say the allocation is inadequate to address Nigeria’s housing deficit. The Executive Director of the Housing Development Advocacy Network, Festus Adebayo, said, “Comparing the budget of last year to this year is nothing. “Why is that? Because last year, the budget was lower than the previous year, and then we called on the legislative arm of the government to increase the budget, and it was increased last year. But how much of that budget was released to the ministry, and to what extent was it funded? The evidence before us confirmed that the budget was not even funded up to 50 per cent. “The government should show more seriousness by allocating more to social housing, so that people who need houses can get them. It is just on paper. This is how they write it every year. The political will of the government is not there, because the possibility that they will not fund up to that amount that they wrote is very clear. “I am saying the government should change its attitude to housing in Nigeria and should not leave it only in the hands of the private sector. That makes it impossible for the people who really need the houses to own them. Towards the end of 2025, the prices of rent changed to the extent that people could no longer afford the rent. These people have started going to the outskirts of the city. “So, there is no better time for the government to declare an emergency in the housing sector. The emergency is due to the high prices of building materials. The emergency is a result of the cost of production. The amount you pay to access land, the money you are paid to buy the land, is over any money you get from the bank. The interest rate is double digits, 30 per cent above. Adebayo stated that rent consumes over 50 per cent of household income, stressing that there is rising homelessness and overcrowding, as workers are now moving to distant cities. “The situation has reached a level where we have to declare 0.1 per cent of the entire budget to housing,” he stated. An official from the housing ministry, who pleaded not to have his name in print due to the lack of authorisation to speak on the matter, also said, “Towards the end of 2023, Vice President Shettima was speaking to journalists, and he said that Nigeria needed N20tn to offset its housing deficit. “A year later, in 2024, the minister had conversations with three committees. So, they came together and agreed to support the push by the ministry for a N500bn annual budget to be able to make meaningful improvements in the sector in terms of housing delivery, to curtail the deficit. So that agreement was in place, and the National Assembly agreed that they would support that push. “Unfortunately, in 2025, when the budget was released, we saw that the ministry got less than N100bn, and this N100bn is not even for housing delivery alone. It has overheads, it has recurrent expenditure, and other projects. The ministry is also involved in urban regeneration, slum upgrading, and other community projects. “We thought that it would be better in 2026, but unfortunately, it’s just N105bn. So that’s where we are. So, my take is that even though we are pushing, the President is not showing the will to actually release that money to build houses for Nigerians. That’s the body language.” The official observed that the 2026 budget is over N40tn, stressing that “the budget for housing is not even up to one per cent of that budget. It’s like 0.2 or 0.3 per cent of the entire budget.” Nigeria is faced with a massive housing deficit, as the available houses are often overpriced, particularly in urban centres. This makes it tough for the majority of the low-income earners in the country to live far away from urban centres, spending so much on transportation while commuting to work.