CAPITALDIGEST DAILY NEWS, 16/03/2026

NUPRC ENFORCES DRILL-OR-DROP RULE FOR OIL BLOCKS

The Nigerian Upstream Petroleum Regulatory Commission has declared that the era of oil companies holding on to exploration licences for years without developing the assets is officially over, as new provisions under the Petroleum Industry Act compel operators to either develop their fields or relinquish them. The Commission Chief Executive of the NUPRC, Oritsemeyiwa Eyesan, disclosed this while receiving a delegation from the Petroleum Directorate of Sierra Leone at the commission’s headquarters in Abuja. Eyesan also expressed satisfaction with the level of investor interest recorded so far in Nigeria’s 2025 oil licensing round, describing the number of applicants as encouraging despite stricter bidding conditions introduced by the regulator. This was contained in a statement issued on Friday by the Head of Media and Corporate Communications at the commission, Eniola Akinkuotu. According to Eyesan, the response from investors to the licensing round has demonstrated renewed confidence in Nigeria’s upstream petroleum sector following regulatory reforms introduced by the Petroleum Industry Act. She said the ongoing exercise involves 50 oil blocks currently on offer, adding that the strong level of participation was recorded despite a rule limiting companies to a maximum of two blocks, whether bidding individually or as part of a consortium. “For the 2025 licensing round, we have 50 oil blocks on offer. And the outcome of the pre-qualification submission was a demonstration that there is indeed a very good appetite for the bid round,” Eyesan said. She explained that the commission deliberately introduced restrictions on the number of blocks that companies can bid for in order to prevent asset hoarding and encourage wider participation from investors. According to her, the policy ensures that exploration assets are allocated to companies that are genuinely ready to invest and develop them. Eyesan also disclosed that the commission had taken additional steps to strengthen transparency and investor confidence in the licensing process. She said the regulator engaged an independent audit firm to review the digital bidding system and validate its integrity. “In order to ensure total transparency in the licensing round, the commission added an extra layer of validation by partnering with a reputable audit firm to interrogate the system and validate that the system is foolproof. The result of that exercise will be made public just to boost investor confidence,” she stated. The NUPRC boss said the introduction of the “drill or drop” provision under Section 94 of the Petroleum Industry Act has fundamentally changed the way exploration licences are managed in Nigeria. She noted that the provision compels operators to either commence exploration and development activities within a specified timeframe or surrender the licence to the government. According to her, the reform has eliminated the longstanding practice where companies held on to oil blocks for decades without developing them. Eyesan said, “One of the beauties of the PIA is Section 94, which compels operators to either commence work or relinquish the licence, what we call the drill or drop provision. “The PIA also opened opportunities for both small and big players because there is now a drill or drop provision in the Act. So we have cured the problem of uncertainties.” She explained that prior to the reform, some operators retained prospecting licences for as long as 20 years without carrying out meaningful exploration work, thereby slowing down Nigeria’s efforts to expand its petroleum reserves. “In the past, we had operators who had 20-year licences and sat on these blocks and did absolutely nothing. “Now we have moved from that era to drill or drop. So we have more assets in the basket, which has given us the impetus to even consider holding bid rounds more frequently, possibly on an annual basis,” the CCE noted. She added that the policy shift has helped return more dormant assets to the government’s portfolio, thereby creating new opportunities for investors in the ongoing licensing round. According to the commission, the renewed interest in the bid round could also support Nigeria’s long-term goal of increasing its proven crude oil reserves and sustaining upstream investments Nigeria currently holds some of the largest hydrocarbon reserves in Africa, but exploration activity has slowed in recent years due to regulatory uncertainty, security challenges, and global energy transition pressures. The enactment of the Petroleum Industry Act in 2021 has helped restore investor confidence by introducing clearer fiscal terms, improved regulatory frameworks, and stricter accountability requirements for operators. Meanwhile, the Director-General of the Petroleum Directorate of Sierra Leone, Foday Mansaray, said his country was seeking to learn from Nigeria’s regulatory experience in developing its own hydrocarbon sector. Mansaray explained that the delegation’s visit to the NUPRC was aimed at deepening bilateral cooperation and gaining insights into Nigeria’s petroleum governance framework. “We are here to collaborate with the NUPRC at a bilateral level and learn from Nigeria, our big brothers in the industry,” he said. “We are a small country of just eight million people, but very ambitious, and we believe there is a lot we can learn from Nigeria’s experience in managing the petroleum sector.” He also called for stronger energy collaboration between both countries and proposed the signing of a Memorandum of Understanding to formalise cooperation in regulatory capacity building and petroleum sector development. The 2025 oil licensing round was formally launched in December 2025 following approval by President Bola Tinubu as part of efforts to attract fresh investment into the country’s upstream petroleum sector.The bid round offers 50 oil and gas blocks located across several sedimentary basins, including the Niger Delta, Anambra, Bida, Benue Trough, and Chad basins, with the objective of boosting exploration activity, increasing reserves, and supporting long-term crude production growth.As of now, the process has completed the pre-qualification stage, with the submission window closing on February 27, 2026, after which qualified companies are expected to proceed to the technical and commercial bidding phase, where bids will be evaluated before final awards are announced. Overall, the licensing round is expected to run for about eight months, from November 2025 to July 2026, when the commercial bid conference and final approvals are scheduled to conclude the process.

CASH OUTSIDE BANKS FALLS BY N198BN, MONEY SUPPLY DIPS

Cash held outside Nigeria’s banking system fell by N197.68bn in one month to N5.21tn in January 2026, even as the amount of money circulating in the economy remained broadly flat, and bank reserves dropped sharply, according to the latest Money and Credit Statistics released by the Central Bank of Nigeria. The figures showed that currency outside banks declined from N5.41tn in December 2025 to N5.21tn in January 2026, representing a month-on-month drop of N197.68bn. This came as total currency in circulation slipped marginally by N1.74bn to N5.731tn in January 2026 from N5.732tn in the preceding month. Despite the monthly decline in cash held outside the banking system, the data indicated that a very large share of Nigeria’s physical cash remained outside deposit money banks. The proportion of currency in circulation that was held outside banks stood at 90.91 per cent in January 2026. This means that more than nine-tenths of cash in circulation was still outside the vaults of banks during the month under review, although the ratio was lower than the 94.33 per cent recorded in December 2025. The latest reading suggests that while some cash returned to the banking system between December and January, the broader structure of cash usage in the economy remained heavily tilted towards cash retention outside formal banking channels. A comparison with the same period last year showed that cash outside banks was still significantly higher on an annual basis. In January 2025, currency outside banks stood at N4.74tn, compared with N5.21tn in January 2026. This translates to a year-on-year increase of N473bn. Similarly, currency in circulation rose by N495.68bn year-on-year from N5.24tn in January 2025 to N5.73tn in January 2026, indicating that the stock of physical cash in the economy expanded over the 12-month period. The data also showed that the share of currency in circulation outside banks was 90.48 per cent in January 2025, slightly below the 90.91 per cent posted in January 2026. This suggests that although the ratio eased on a monthly basis from December, it remained marginally higher than the level recorded a year earlier. The PUNCH also observed that Nigeria’s broad money supply declined by N1.05tn to N123.36tn in January 2026, largely driven by a drop in the country’s net foreign assets. Data published on the Central Bank of Nigeria website showed that the broad money supply, commonly referred to as M3, fell from N124.41tn in December 2025 to N123.36tn in January 2026. M3 represents the broadest measure of money circulating in an economy. It includes cash in circulation, bank deposits, and other highly liquid financial instruments held by households, businesses, and financial institutions. The January decline represents a month-on-month contraction of N1.05tn in overall liquidity within the financial system. Despite the monthly drop, the data showed that money supply expanded significantly compared with the same period last year. Broad money stood at N111.11tn in January 2025, indicating a year-on-year increase of N12.26tn. An analysis of the underlying components of money supply suggests that the contraction in January was largely triggered by a decline in Nigeria’s net foreign assets. According to the CBN data, net foreign assets fell to N29.61tn in January 2026 from N31.51tn recorded in December 2025, representing a month-on-month decline of N1.90tn. Net foreign assets refer to the foreign holdings of the banking system, including the Central Bank and commercial banks, such as foreign reserves, foreign currency deposits, and other overseas financial assets, minus their external liabilities. The year-on-year comparison also showed a decline. In January 2025, net foreign assets stood at N33.19tn, meaning the January 2026 level reflects a drop of N3.58tn. The reduction in foreign assets occurred during a period when the naira strengthened in the official foreign exchange market. The naira ended January 2026 on a stronger footing in the official market, closing at N1,391 to the dollar, compared with its opening rate of N1,431 to the dollar at the start of the month. Data from the Central Bank of Nigeria showed that the currency largely traded below the N1,425 to the dollar mark throughout January, reflecting relative stability in the foreign exchange market amid improved liquidity conditions. When the naira appreciates against the dollar, the naira value of foreign assets held by the monetary authorities may decline when converted from foreign currency. While foreign assets declined, the data showed that domestic liquidity conditions expanded. Net domestic assets increased to N93.76tn in January 2026 from N92.90tn recorded in December 2025, representing a month-on-month increase of N850.76bn. Net domestic assets represent the financial claims within the domestic economy, including credit to the Federal Government, lending to the private sector, and other domestic financial assets held within the banking system. On a year-on-year basis, domestic assets recorded a stronger increase, rising from N77.92tn in January 2025 to N93.76tn in January 2026, indicating a growth of N15.83tn over the period. Further breakdown of the CBN data showed that the narrower measure of liquidity in the financial system, known as M2, also declined during the month. M2 stood at N123.35tn in January 2026, compared with N124.40tn recorded in December 2025, representing a month-on-month drop of N1.05tn. M2 is a slightly narrower measure of money supply than M3. It typically includes currency in circulation, demand deposits, savings deposits, and time deposits held in banks, but excludes certain institutional or large financial instruments captured under M3.Meanwhile, narrow money, which represents the most liquid form of money in the economy, increased during the period. Narrow money rose to N42.33tn in January 2026 from N42.14tn recorded in December 2025, reflecting a month-on-month increase of N190.76bn. Narrow money generally consists of physical currency in circulation and demand deposits in banks that can be easily accessed for transactions. The figure also showed a strong annual increase compared with N36.77tn recorded in January 2025, representing a year-on-year rise of N5.57tn. Overall, the January figures suggest that while domestic credit and transactional money expanded within the economy, the decline in the value of Nigeria’s foreign assets played a decisive role in pushing down the country’s broad money supply during the month. The movement in monetary aggregates comes amid the Central Bank of Nigeria’s continued efforts to manage liquidity conditions in the financial system through tight monetary policy aimed at curbing inflation and stabilising the foreign exchange market. With the decline in money supply and inflation rate, the Monetary Policy Committee (MPC) of the CBN reduced the benchmark interest rate to 26.5 per cent. This was the second time the MPC cut rates under the current leadership of the apex bank. The CBN Governor, Olayemi Cardoso, announced the decision on Tuesday at the end of the committee’s 304th meeting in Abuja. Cardoso said, “The Committee decided to reduce the monetary policy rate by 50 basis points to 26.5 per cent.” He added that the MPC also resolved to “retain the Standing Facilities Corridor around the MPR at +50/-450 basis points” and to “retain the Cash Reserve Requirement for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits.” This marks the second rate cut under the current leadership of the apex bank, following a similar 50-basis-point reduction in September 2025 and a hold at the November 2025 meeting. Cardoso said the decision was based on “a balanced evaluation of risks to the outlook,” which indicates that “the ongoing disinflation trajectory would continue, largely supported by the lagged transmission of previous monetary tightening, sustained exchange rate stability, and enhanced food supply.” He noted that headline inflation eased to 15.10 per cent in January 2026 from 15.15 per cent in December 2025, marking the eleventh consecutive month of year-on-year decline. According to the governor, “Food inflation declined markedly to 8.89 per cent from 10.84 per cent,” while “core inflation declined to 17.72 per cent from 18.63 per cent.” On a month-on-month basis, headline inflation fell to -2.88 per cent in January from 0.54 per cent in December, which the committee said signalled “a continued softening of price pressures.” He reaffirmed the MPC’s commitment to “an evidence-based policy framework, firmly anchored on the Bank’s core mandate of ensuring price stability, while safeguarding the soundness and resilience of the financial system.” Analysts backed the decision of the MPC to cut the rate by 50 basis points, as stakeholders affirmed that the rate cut to 26.5 per cent is mostly viewed as a credibility-building signal rather than the start of rapid easing.

MARKET CAP HITS N127.36TN ON WEEKLY GAINS

Market capitalisation on the Nigerian Exchange hit N127.36 tn as the market closed the week ending Friday on a positive note. The NGX All-Share Index appreciated 0.73 per cent to settle at 198,407.30 points, driven by investor bargain-hunting despite fluctuations in trading volume. Over the course of the week, a total of 3.321 billion shares worth N164.845 bn were traded in 318,907 deals, a slight decrease compared to the previous week’s turnover of 3.695 billion shares valued at N177.687 bn. The Financial Services industry remained the dominant sector, contributing 65.61 per cent of the total volume and 36.28 per cent of the total value, followed by the Oil and Gas and Consumer Goods sectors. Activity in the top three equities, including Access Holdings Plc, Fortis Global Insurance Plc, and First Holdco Plc, accounted for 20.39 per cent of the total equity turnover volume. The broader market saw growth across several indices, including the NGX Industrial Goods index, which surged 5.73 per cent, and the NGX Main Board, which rose 1.99 per cent. Alternative assets also saw increased interest, with Exchange Traded Products recording 4.426 million units traded for N741.652 m, while the bond market saw 84,691 units transacted for N87.531 m. In corporate updates, Linkage Assurance Plc officially activated the trading code for its rights issue of 12.32 billion ordinary shares at N1.32 per share, marking a significant step for the company’s capital management. While 34 equities appreciated during the week, 61 equities depreciated and 53 remained unchanged, reflecting a dynamic trading environment as the market continues its upward trajectory.

NAICOM TIGHTENS INSURERS’ RECAPITALISATION OVERSIGHT

The National Insurance Commission has heightened its oversight of the ongoing industry recapitalisation, as it prepares to commence formal verification of the capital bases of 16 insurance companies. To ensure the integrity and transparency of the process, the Commission has engaged the “Big Four” global accounting firms, PwC, KPMG, Deloitte and EY, to execute an independent verification exercise. The Managing Director of Rex Insurance Limited and Chairman of the Communication and Stakeholder Engagement Sub-Committee of the Insurers Committee, Ebelechukwu Nwachukwu, disclosed this during the committee’s monthly meeting in Lagos. According to her, the Commissioner for Insurance, Olusegun Omosehin, noted that while 20 insurance companies had written to seek verification of their accounts, 16 firms have been officially confirmed to proceed. Nwachukwu explained that involving global audit giants is a strategic move to provide an unbiased assessment of the financial positions of the firms that have indicated readiness. The verification will scrutinise assets, cash reserves and overall compliance with the new minimum capital requirement as stipulated under the Nigerian Insurance Industry Reform Act 2025. “The Commission is not leaving anything to chance. By partnering with the Big Four, NAICOM is ensuring that every kobo of the reported capital is verified and backed by qualifying assets,” Nwachukwu stated. This is about building a resilient industry that can compete globally and win the trust of the insuring public,” she added. The regulator has likened this verification stage to an “airport scanner”, where every operator must undergo a rigorous, uniform assessment to validate their solvency. Only firms that successfully navigate this independent audit will be cleared and issued new operating licences ahead of the 30 July 2026 deadline. The 16 companies represent the “first batch” of operators who have submitted recapitalisation plans and received the nod for final validation. Nwachukwu added that the Commissioner urged operators to show more “action” regarding their recapitalisation efforts. Furthermore, NAICOM reaffirmed the 30 April 2026 deadline for linking all insurance policies to National Identification Numbers

EQUITIES MARKET REBOUNDS WITH N649BN GAIN

The Nigerian stock market reversed the negative trend witnessed in the previous two trading sessions, recording a gain of N649bn on Thursday. The All-Share Index rose by 1,010.22 points, representing an increase of 0.52 per cent to close at 196,908.76 points. Market capitalisation gained N649bn to close at N126.399tn. The upturn was driven by gains in medium and large-cap stocks, including Transcorp Hotels, BUA Cement, Fidson Healthcare, CAP, and Guinness Nigeria. Of the 132 traded stocks, 30 advanced, 30 declined, and 62 closed unchanged, indicating a mixed market breadth. FTN Cocoa Processors recorded the highest price gain of 10 per cent to close at N6.27 per share. Fidson Healthcare followed with a gain of 9.97 per cent to close at N105.35, while DEAP Capital Management & Trust was up by 9.89 per cent to close at N7.00 per share. Caverton Offshore Support Group rose 9.40 per cent to close at N6.40, while Livestock Feeds appreciated 9.30 per cent to close at N7.05 per share. On the other hand, Eterna and Omatek Ventures led the losers’ chart with a 10 per cent decline each, closing at N42.30 and N2.52, respectively. SCOA Nigeria followed with a decline of 9.94 per cent to close at N22.65 per share. Fortis Global Insurance depreciated 9.24 per cent to close at N1.08, while Sovereign Trust Insurance declined 9.09 per cent to close at N2.10 per share. Meanwhile, the total volume traded declined by 25.84 per cent to 549.781 million units, valued at N44.736bn across 55,465 deals. Transactions in the shares of Fortis Global Insurance topped the activity chart with 32.182 million shares valued at N34.775m. Access Holdings followed with 28.124 million shares worth N700.986m, while First Holdco traded 27.722 million shares valued at N1.385bn. Zenith Bank traded 27.483 million shares valued at N2.559bn, while Dangote Cement saw 26.893 million shares worth N20.671bn traded. Regarding market performance, Imperial Asset Managers Limited stated, “Overall, the session reflects a return of investor confidence, supported by selective accumulation of fundamentally strong stocks amid a positive macroeconomic environment and above-par corporate earnings released so far for the 2025 full-year season.”