CAPITALDIGEST DAILY NEWS, 26/01/2026

TINUBU APPROVES COMMERCIAL OIL DRILLING IN OGUN

President Bola Tinubu has approved the commencement of commercial oil drilling at Tongeji Island in Ipokia Local Government Area of Ogun State. Governor Dapo Abiodun disclosed this on Thursday while receiving the Flag Officer Commanding, Western Naval Command, Rear Admiral Abubakar Abdullahi Mustapha, alongside senior officers of the command, during a courtesy visit to his office in Oke-Mosan, Abeokuta. The governor also revealed that the President had approved the immediate take-off of the Olokola Deep Seaport project located in Ogun Waterside Local Government Area, describing the decision as a major breakthrough after years of anticipation surrounding the multibillion-dollar port project. Abiodun said both projects were of special interest to President Tinubu, noting that while the Olokola Deep Seaport would significantly decongest the Lagos ports, commercial oil drilling at Tongeji Island would promote inclusion and economic empowerment for residents of coastal communities. “Let me share with you that Mr President has approved the commencement of commercial oil drilling operations at Tongeji Island, and going forward, you will begin to see a lot of activities there. “Our proposed Olokola Port, which has been on the drawing board for several years, is now back on the table. I want to sincerely thank Mr President because this is solely his initiative. In the last two weeks alone, we have held several meetings on Olokola, and Mr President has clearly expressed his desire to see the port become a reality”, the governor said. Abiodun added that the President had specifically directed that construction of the port should be far advanced between now and next year, stressing that the project presents a strong opportunity to decongest the Lagos ports, especially with the coastal road providing an alternative logistics corridor. He further disclosed that the new seaport would be known as the Blue Marine Economic Zone, reflecting its strategic coastal location and vast economic potential. The governor commended the Nigerian Navy for establishing a Forward Operations Base at Tongeji Island, noting that the naval presence would help prevent infiltration from the neighbouring Republic of Benin and discourage any attempts to undermine Nigeria’s territorial integrity. He also said his administration was working to provide basic amenities for residents of the island as part of efforts to improve living conditions and support emerging economic activities. Abiodun appreciated the Nigerian Navy for its contribution to the state’s security architecture, noting that collaboration among security agencies had helped sustain the relative peace currently enjoyed in Ogun State. Describing Rear Admiral Mustapha as a seasoned and accomplished officer, the governor expressed confidence that Ogun State would experience enhanced security and progress under his leadership. “We are happy that someone with your antecedents, background, training, and experience is occupying this position at this time. You are a round peg in a round hole,” the governor said. Earlier, Rear Admiral Mustapha described Ogun State as critical and strategic to Nigeria’s national security, disclosing that the naval outpost at Tongeji Island would be upgraded to a Forward Operations Base due to the area’s oil potential. He explained that the visit was aimed at strengthening synergy between the Nigerian Navy and the Ogun State Government, adding that part of his responsibility was to safeguard Nigeria’s border with the Republic of Benin and prevent criminal elements from gaining a foothold in the state.

TIGHT MONETARY POLICY REDUCED INFLATION BY 10 POINTS – CBN

Nigeria’s sustained monetary tightening has played a central role in slowing inflation, with research estimates showing that the Central Bank of Nigeria’s policy stance accounted for as much as 10 percentage points of the decline in headline inflation, the Governor of the Central Bank of Nigeria and Chairman of the Monetary Policy Committee, Olayemi Cardoso, has said. This was stated in his personal statement released by the apex bank on its website on Wednesday. Cardoso, in his personal statement at the Monetary Policy Committee meeting held in November 2025, described the outcome as strong counterfactual evidence of the effectiveness of monetary policy despite significant domestic and global headwinds. He said the findings reinforced the need for bold and consistent actions to preserve price stability. In the statement, Cardoso said, “Research estimates indicate that our tight policy stance has accounted for up to 10 percentage points of the decline in headline inflation, providing encouraging counterfactual evidence on the effectiveness of monetary policy in the current environment and a reminder of the need to consistently take bold actions.” Data show that headline inflation declined to 16.05 per cent in October 2025 from 18.02 per cent in September and is now 8.43 percentage points lower than the 24.48 per cent recorded in January 2025. The CBN governor noted that the disinflation has been broad-based, cutting across headline, food, and core inflation, with momentum strengthening in recent months. According to him, the slowdown reflects reduced foreign exchange volatility, lower food prices, and better-anchored inflation expectations, supported by a relatively stronger naira. He added that the exchange rate has become significantly less volatile and has shown signs of market-driven appreciation, while foreign reserves have continued to strengthen following reforms that improved capital inflows and triggered structural shifts in Nigeria’s balance of payments. Beyond inflation, Cardoso said macroeconomic conditions have improved, with rising investor confidence, stronger external buffers, and positive business and household sentiment supporting long-term investment in critical sectors of the economy. However, he warned that risks to the outlook remain elevated, citing global uncertainties, geopolitical tensions, and Nigeria’s recent designation by the United States as a Country of Particular Concern. He noted that although the designation is rooted in security issues, it could have economic spillover effects. He also identified the 2026 political cycle as a key domestic risk, given the historical link between pre-election fiscal expansion and inflationary pressures, exchange rate depreciation, and external sector stress. The CBN governor said fiscal reforms, though necessary, often take time to deliver results and may introduce new challenges in the interim, stressing that monetary policy must remain alert and proactive to prevent any reversal in the disinflationary trend. Cardoso said deliberations at the November meeting supported maintaining a tight monetary stance, identifying excess system liquidity as a major threat to price stability. He argued that holding policy rates steady would reinforce stability and signal confidence that the current stance is delivering the desired results. He added that improved anchoring of overnight market rates within the standing facilities corridor shows stronger policy transmission to the wholesale market, providing room for operational adjustments to better manage liquidity conditions. Based on this assessment, Cardoso supported retaining the Monetary Policy Rate at 27 per cent, adjusting the standing facilities corridor to +50/-450 basis points, maintaining a 45 per cent cash reserve ratio for commercial banks and a 75 per cent CRR on non-TSA public sector deposits, while keeping the liquidity ratio unchanged at 30 per cent. While acknowledging that monetary policy alone cannot guarantee sustainable growth, he said the current tight stance remains critical to safeguarding stability and creating the conditions for broader structural reforms to take root over time. The PUNCH earlier reported that the Monetary Policy Committee of the Central Bank of Nigeria retained the benchmark interest rate at 27 per cent, extending its pause on monetary tightening as the bank seeks to consolidate recent progress in stabilising prices, exchange rates, and capital flows. CBN Governor, Olayemi Cardoso, announced the decision in Abuja at the end of the committee’s 303rd meeting, where all twelve members were present. Cardoso said the MPC voted by a majority “to maintain the monetary policy stance,” adding that members were convinced that the economy required more time for earlier decisions to filter through.

CBN URGES BALANCE AS DIGITAL PAYMENTS SURGE 276%

Digital payments in Nigeria have recorded a 276 per cent increase in transaction volume over the past five years, underscoring rapid adoption of electronic channels, even as cash continues to play a critical role in the economy, the Central Bank of Nigeria has said. This was disclosed at the Committee on Bank Operations Annual Conference on Friday, where the Governor, Mr Olayemi Cardoso, delivered the keynote address through his Special Adviser, Fatai Kareem. In his address, the CBN governor highlighted the need for a balanced payment ecosystem in which digital innovation and physical cash coexist rather than compete. According to the data presented during the keynote, the value of digital payment transactions also grew by 581 per cent over five years. The figures, drawn from industry payment infrastructure, reflect increasing consumer confidence, policy reforms, and technological innovation within Nigeria’s financial system. Despite this growth, the CBN emphasised that cash usage has not declined. Currency in circulation rose from about N2.4tn in 2020 to approximately N5.1tn in 2025, while total currency in circulation increased by 4.6 per cent year-on-year as of December 2025. He said, “Nigeria’s payment ecosystem has evolved significantly over the past decade. While policy remains somewhat cash-oriented, experience shows that cash continues to play a critical role, particularly in informal markets, rural communities, and among vulnerable populations. “At the same time, electronic payments enhance transparency, efficiency, and inclusion. When properly governed, electronic channels complement cash, reduce pressure on physical currency management, and provide scalable alternatives during peak demand. The objective is balance: maintaining confidence in cash while accelerating reliable electronic payment adoption. “Cash availability is not solely a function of currency issuance. It depends on logistics, infrastructure, incentives, and coordination among financial institutions. Failures in access—ATM outages, illiquidity—undermine confidence in the system. Banks play a critical role in shaping the future of cash. “They must invest in technology, collaborate with regulators, improve cash deposit mobilisation, strengthen fraud prevention, and enhance digital platforms. The Central Bank remains fully committed to building a resilient, inclusive payment system by strengthening infrastructure, modernising currency management, and supporting responsible innovation.” The governor said electronic and digital payment channels, when properly designed and governed, complement cash by easing pressure on physical currency management, improving efficiency, and providing alternatives during periods of operational stress. He added that the strategic challenge for Nigeria is not choosing between cash and digital payments, but ensuring citizens can always access cash when needed while building trust in electronic channels for everyday transactions. “In conclusion, progress is not measured by how quickly we adopt technology, but by how effectively systems improve lives, reduce friction, and expand productivity. The strategic challenge is not choosing between cash and digital payments, but ensuring citizens can access cash when needed while building trust in electronic channels. “Achieving this balance requires coherent policy, strong oversight, and close industry coordination. When aligned, the payment system supports economic activity, financial inclusion, and public trust,” he asserted. In his welcome address, the First Vice Chairman of CHBO, Tolulope Ogundipe, who represented the Chairman, CHBO, Abraham Aziegbe, said Nigeria’s financial system is at a defining crossroads, shaped by the rapid rise of digital innovation on one hand and the enduring relevance of physical cash on the other. He said, “We stand at a defining crossroads. On one side, the breathtaking rise of digital innovation is reshaping financial services at an unprecedented pace. On the other hand, the enduring presence of physical currency continues to ramp up trust, inclusion, and stability in our economy. “Today, our mission is clear: to explore how cash and digital can co-exist, not as rivals, but as complementary forces that shape Nigeria’s financial future. The story of cash versus digital in Nigeria is layered and complex. Yes, digital payments are surging, reflecting consumer confidence and our collective ingenuity. Yet, cash remains deeply woven into the fabric of everyday life. For millions, especially in rural communities, cash is not just convenient; it is essential. “Recent figures from the Nigeria Inter-Bank Settlement System highlight this dual reality. Electronic transactions have soared over the past decade, yet outages and infrastructure challenges have triggered spikes in cash usage. In fact, the Central Bank of Nigeria reported that ATM withdrawals reached N36.34tn in just the first half of 2025, a staggering leap from N12.21tn during the same period in 2024. This is not a relic of the past; it is a reminder that cash remains a cornerstone of resilience, continuity, and trust. Our challenge, therefore, is not to diminish cash, but to reimagine its role.” In his presentation, the Managing Director/Chief Executive, Bankers Warehouse Plc, warned about the high value of cash outside the banking system, describing it as a matter requiring urgent action. He said, “There was a dislocation, there’s a trust issue. There are a few other things. There is a need to invest in infrastructure, and there’s a need to invest in power. All of those things can affect the system. The cash comes in, and it leaves the banking system. “It is supposed to come back to the banking system every week and go out and come back—that’s where we’re talking about the velocity of funds and velocity in transactions. “Now, what is happening is that it’s outside of the banking system, and so when it gets out, people are transacting amongst themselves outside the bank, which can affect monetary policy and impact anything that we do. It means that we cannot even tell the quantum of cash that is authentic or not outside the system. This is a problem that needs to be resolved, and we all need to solve it.”

TAX OMBUD ASSURES NIGERIANS OF FAIRER TAX TREATMENT

The Office of the Tax Ombud has assured Nigerian taxpayers of improved protection and fair treatment as it begins implementing guidelines aimed at safeguarding taxpayer rights, strengthening trust, and enhancing voluntary tax compliance. The assurance followed a meeting held recently in Abuja between the Chief Executive Officer of the Office of the Tax Ombud, Dr John Nwabueze, and a delegation from the Presidential Committee on Fiscal Policy and Tax Reforms. The delegation was led by its Chairman, Mr Taiwo Oyedele, and included the Executive Secretary of the Joint Revenue Board, Mr Olusegun Adesokan, according to a statement issued by the Chief Press Secretary to the Tax Ombud, Chukwudi Achife, on Saturday. Welcoming the delegation, Nwabueze described the Office of the Tax Ombud as a newly established independent mediator and arbiter committed to promoting fairness and transparency in Nigeria’s tax system. He said the office was designed to help improve the investment climate and enhance Nigeria’s competitiveness in line with the Renewed Hope Agenda of the administration of President Bola Ahmed Tinubu. According to him, the office will play a critical role in bridging gaps between taxpayers and tax authorities by ensuring that complaints are addressed objectively and in line with existing laws and regulations. Nwabueze stated that the office would actively engage the Manufacturers Association of Nigeria and other organised private sector groups to ensure that taxpayers are properly informed of their rights and obligations under Nigeria’s tax regime. He said: “We will launch sustained public awareness campaigns to educate taxpayers on their rights and the seamless processes for lodging complaints. We will also engage the Manufacturers Association of Nigeria and other relevant stakeholders to clarify their rights and obligations under Nigeria’s tax laws.” He commended the Presidential Committee on Fiscal Policy and Tax Reforms for providing a comprehensive operational framework to guide the work of the Office of the Tax Ombud. Nwabueze noted that the framework is largely aligned with the office’s internal processes and strategic plans, which are focused on fairness, accountability, and transparency. In his response, Oyedele stressed that the success of President Bola Tinubu’s tax reform agenda depends significantly on the effectiveness of the Office of the Tax Ombud. He described the office as a critical assurance to taxpayers of the government’s commitment to fairness and the protection of their rights. Oyedele assured the office of his continued commitment to providing the necessary support, particularly during its formative stage, to enable it to effectively discharge its statutory mandate and build public confidence in the tax system. The meeting also deliberated on strategies for strengthening Nigeria’s tax system through effective taxpayer protection, enhanced institutional collaboration, and improved policy coordination under the existing Tax Implementation Framework Committee.

IMF WARNS CENTRAL BANKS AGAINST AGGRESSIVE RATE CUTS

The International Monetary Fund has called on central banks to exercise caution in cutting interest rates, emphasising that maintaining price stability remains critical amid uneven growth and persistent inflation pressures. In its latest 13-page World Economic Outlook update, the Fund highlighted that while several economies are experiencing a modest recovery in output, inflationary pressures remain a significant concern. The IMF noted that central banks must carefully balance the trade-offs between supporting growth and avoiding a resurgence of inflation. “Monetary policymakers in countries where inflation is at or close to target should rely on a forecast-centred approach,” the report said.  “Where economies are experiencing negative demand shocks, a gradual reduction in policy rates may be considered to cushion economic activity, provided risks to price stability objectives are contained.” The IMF stressed that in regions where inflation remains above target, a more cautious, data-dependent approach is warranted. “In economies facing adverse supply shocks, policymakers confront complex trade-offs between the risk of a growth slowdown and the risk of persistent inflation. In such cases, further monetary easing should proceed only where there is robust evidence that inflation expectations remain anchored and inflation is returning toward target,” the document added. While Nigeria’s strong growth outlook positions it as a driver of Sub-Saharan Africa’s expansion, the IMF cautioned that sustaining economic momentum will require disciplined fiscal and monetary policies. Headline inflation eased to 15.15 per cent year-on-year in December 2025 from 17.33 per cent in November, following a methodological review by the National Bureau of Statistics, while the Monetary Policy Rate has been held steady at 27 per cent since at least November 2025, with the MPC opting for a tight policy to anchor inflation amid elevated risks. The Fund underscored the importance of central bank independence in safeguarding macroeconomic stability. It warned that any deviation from credible monetary frameworks could risk fiscal dominance, where fiscal pressures undermine monetary policy effectiveness and erode the credibility needed to anchor inflation expectations. The IMF said it is essential to navigate volatile global conditions. “Central banks must articulate policy intentions transparently and consistently to ensure that expectations remain well-anchored. The independence of monetary authorities, both legal and operational, remains paramount for economic growth and price stability,” the report stated. It also noted disparities in economic activity and inflation dynamics across regions. Rapid technological investment, for example, is likely to push real neutral interest rates upward at varying degrees across jurisdictions, affecting the potential for rate cuts differently in each economy. “This heterogeneity underscores the need for tailored, country-specific monetary policy decisions rather than blanket approaches,” the Fund said. While growth has shown resilience in several emerging markets, the IMF cautioned that sustaining economic expansion will require ongoing vigilance. The Fund recommended that central banks remain flexible but prudent, signalling that aggressive or preemptive rate cuts could undermine hard-won gains in price stability. “Policy rate decisions must strike a careful balance. Premature easing risks reigniting inflation, while delayed action in the face of weak demand can slow growth. Central banks must move deliberately, guided by data, to maintain the delicate equilibrium between growth and price stability,” the report noted.