CAPITALDIGEST DAILYNEWS, 01/06/2026

NNPC POSTS N481BN PROFIT AMID REVENUE SURGE

The Nigerian National Petroleum Company Limited has recorded a significant month-on-month surge in performance, with revenue climbing sharply to N4.97tn in April 2026, compared to N2.77tn posted in March. This represents an increase of about 79 per cent in monthly revenue, according to the company’s April 2026 operational and financial report released on Saturday. According to the report, profit after tax also rose substantially to N481bn in April, up from N276bn in March, a jump of approximately 74 per cent. Between January and April 2026, NNPC said it remitted a total of N3.71tn in statutory payments to the Federal Government. This is up from N2.89tn recorded for the first three months of the year. The report stated that crude oil and condensate production increased to 1.68 million barrels per day in April from 1.56 mbpd in March, indicating a marginal recovery in upstream output. Natural gas production remained largely stable at 7.7 billion standard cubic feet per day in April. Gas sales averaged 4.65 bscf/d, while upstream pipeline availability stood at 79 per cent. The oil firm stated that it achieved a major infrastructure milestone in April with the successful crossing of the OB3 River Niger pipeline segment, advancing Nigeria’s gas infrastructure goals. Progress also continued on the Ajaokuta-Kaduna-Kano gas pipeline project. However, NNPC noted challenges, including delays in the start-up of the Trans Ramos Pipeline due to leak detection and facility integrity issues. Similarly, the NNPC Foundation reportedly sustained its strong corporate social responsibility drive in April. It commissioned three fully rehabilitated wards with 102 beds at the National Orthopaedic Hospital, Lagos, on April 29. The Foundation also said it delivered humanitarian aid to flood victims in Mokwa, Niger State, and trained 72,657 NYSC members in basic financial literacy during the month under review.

CBN HALTS RATE CUTS AMID GLOBAL DISINFLATION RISKS

When the Monetary Policy Committee of the CBN rose from its 305th meeting in Abuja on Wednesday, the decision was not merely to leave interest rates unchanged. It was a signal that the apex bank was no longer willing to treat Nigeria’s recent disinflation path as safe enough to justify another rate cut. The CBN Governor, Olayemi Cardoso, announced that the committee retained the Monetary Policy Rate at 26.5 per cent; kept the standing facilities corridor at +50/-450 basis points; and retained the Cash Reserve Requirement for deposit money banks at 45 per cent, merchant banks at 16 per cent, and non-TSA public sector deposits at 75 per cent. The decision followed the MPC’s review of rising risks to the global and domestic economies. The hold marked a pause in the easing cycle, which resumed in February 2026 when the MPC reduced the MPR by 50 basis points to 26.5 per cent, following 10 straight months of falling inflation and January headline inflation of 15.10 per cent. But by May, the policy room had narrowed. Headline inflation had risen for two consecutive months, reaching 15.69 per cent in April from 15.38 per cent in March. Food inflation climbed more sharply to 16.06 per cent from 14.31 per cent, while core inflation eased to 15.86 per cent from 16.21 per cent. Cardoso, speaking after the meeting, said the rise was largely due to external shocks but argued that the inflation pressure was temporary. “We’ve got to remember that we’ve been coming from 11 straight months of disinflation,” Cardoso said. “We believe that what we have now is something that has resulted from external shocks. But that notwithstanding, we have been able to create buffers that have protected us during this period.” That explanation captured the main tension in the MPC’s decision. On the one hand, the CBN believes that its earlier tightening, exchange rate reforms, and reserve accumulation have reduced Nigeria’s vulnerability. On the other hand, it knows that cutting rates too early could weaken the naira, worsen imported inflation and unsettle market expectations. The global backdrop supports the CBN’s caution. The International Energy Agency, in its May 2026 oil market report, said global oil supply fell further in April, with total losses since February at 12.8 million barrels per day. Also, the IEA expected supply losses linked to the Iran war and Strait of Hormuz disruptions to keep the market undersupplied through the third quarter of 2026. For Nigeria, that creates a mixed picture. Higher oil prices can lift export earnings and strengthen external reserves. However, increases in global fuel, shipping and food prices could also raise domestic inflation through higher transport and logistics expenses. This explains why the MPC attributed the recent inflation rise to the Middle East crisis, noting that the conflict had intensified pressure on energy, transportation and logistics costs. Analysts at the Financial Markets Dealers Association said the MPC’s decision reflected a cautious monetary stance shaped by rising geopolitical tensions and growing uncertainty in global fixed-income markets. They further argued that the MPC’s decision suggested monetary easing in Nigeria would likely proceed more gradually than previously anticipated, as central banks globally increasingly adopt a cautious wait-and-see approach amid inflation risks, volatile energy prices and persistent geopolitical tensions. The strongest part of Cardoso’s defence was the foreign exchange market. He repeatedly framed exchange rate stability as the central tool for preventing a temporary shock from becoming a broader inflation crisis. “In addition to that, of course, it is key that the centrepiece of our toolkit is ensuring that our foreign exchange rate remains stable,” he said. “That is something that we are committed to ensuring happens.” This matters because Nigeria’s inflation problem is not only about money supply. It is also about the price of imported fuel, machinery, raw materials, food inputs and shipping. When the naira weakens sharply, global price shocks enter the domestic economy faster. When the currency is stable, the pass-through is lower. The MPC argued that the impact of the Middle East crisis on Nigeria had been “largely muted” due to reforms, including exchange rate stability, stronger reserve buffers, improved monetary policy transmission, a better-capitalised banking system, and fiscal consolidation. It said the pass-through from global commodity and energy prices would have been more severe without those reforms. Cardoso also rejected claims that the CBN was aggressively defending the naira with heavy intervention. He said the FX market had changed considerably, with daily turnover rising from about $100m when the current management took office to about $550m and occasionally touching $1bn. “In actual fact, relative to turnover in 2025, the CBN intervened in about 1.2 to 1.3 per cent. It was so small relative to turnover,” he said. That claim is central to the CBN’s credibility argument. If the naira is stable only because the apex bank is burning reserves, the stability may not last. But if liquidity has deepened and market participants are supplying dollars under a willing-buyer, willing-seller structure, the stability becomes more defensible. Nigeria’s reserves position gives the CBN some cover. The communique put gross external reserves at $49.49bn as of 15 May 2026, compared with $48.35bn at the end of March, enough to cover 9.04 months of imports. The planned rollout of the revised FX Manual on 1 June also aligns with this strategy. Cardoso said the manual was meant to deepen transparency, improve consistency and make it easier for exporters to bring proceeds into the official system. The risk, however, is that confidence can change quickly. If oil disruptions worsen, import bills rise, or portfolio inflows slow, the market may again test the CBN’s resolve. That is why the MPC’s decision to hold rates was less about celebrating stability and more about protecting it. The hold decision also exposed a policy trade-off. High interest rates help the CBN defend the naira and contain inflation expectations, but they also raise borrowing costs for businesses, households and small firms. Nigeria’s economy entered the meeting with stronger growth numbers. The NBS reported real GDP growth of 4.07 per cent in the fourth quarter of 2025, up from 3.98 per cent in the third quarter. The CBN said growth was supported by industry and agriculture, while the non-oil sector expanded 3.99 per cent and the oil sector by 6.79 per cent. However, the growth picture is uneven. Businesses still face expensive credit, high energy costs, weak purchasing power and insecurity in parts of the country. For small and medium enterprises, the question is whether monetary tightening has gone too far. Cardoso acknowledged the concern but said credit to SMEs had begun to improve. According to him, new credit to the SME sector rose to about N199bn in April 2026 from N153bn in March, particularly at the retail end of the market. He said the general category accounted for 94.73 per cent of new credit facilities, while general commerce accounted for 2.46 per cent. He added that SME credit was not the sole responsibility of the CBN, noting that the Ministry of Industry, Trade and Investment, the Bank of Industry and fiscal authorities also had roles to play. The apex bank, he said, would act more as a catalyst by improving the lending ecosystem. That position is practical, but it does not fully remove the pressure. At 26.5 per cent, the benchmark rate remains highly restrictive. Even as banks increase lending to smaller-ticket borrowers, many productive firms still face double-digit borrowing costs that can weaken investment and hiring. The banking recapitalisation exercise is expected to help. The MPC noted that 33 banks had improved their financial soundness indicators following the exercise. Cardoso said the outcome showed investor confidence in Nigeria, adding that domestic investors accounted for about 74 per cent of the recapitalisation interest while foreign investors accounted for about 26 per cent. Still, stronger bank capital does not automatically translate into cheaper credit. Banks may remain cautious if inflation risks persist, the government continues to borrow heavily domestically, or economic uncertainty heightens default risk. The CBN’s task, therefore, is to keep inflation expectations anchored without choking the real economy. Analysts at United Capital Plc said the MPC faced a difficult balancing act between containing inflation and supporting growth, especially as the latest price pressures were largely supply-driven rather than demand-led. In its recent Monetary Policy Watch report, the firm noted that Nigeria’s Composite Purchasing Managers’ Index fell into contraction territory at 49.4 points in April from 53.2 points in March, signalling weakening demand, softer production activities and declining business confidence amid the US-Iran crisis. The analysts argued that while rising inflation will ordinarily justify a tighter monetary policy, the external and transitory nature of the current shocks made an aggressive rate increase less effective. They warned that if the PMI contraction persists, the economy could face weaker investment activity and slower GDP growth, increasing pressure on policymakers to eventually consider a more growth-supportive stance. The MPC’s central bet is that the current inflation increase is temporary. That is plausible, but not guaranteed. The argument in favour of the CBN is clear. Month-on-month headline inflation slowed to 2.13 per cent in April from 4.18 per cent in March, suggesting that the monthly inflation momentum moderated even though the year-on-year rate rose. The 12-month average inflation also slowed to 19.16 per cent from 20.05 per cent, marking the sixth consecutive month of decline. S&P Global Ratings also upgraded Nigeria’s long-term sovereign rating to “B” from “B-” on 15 May 2026, with a stable outlook, citing improving macroeconomic conditions. That upgrade gave the CBN another basis for arguing that reforms are gaining external validation. However, the inflation outlook remains exposed to shocks outside the CBN’s direct control. The IEA’s assessment of oil supply disruptions indicates that global energy markets remain vulnerable. If freight, fuel and agricultural commodity prices remain elevated, Nigeria’s food and transport inflation may stay sticky. The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the MPC’s decision reflected a growing recognition that Nigeria’s inflation pressures were largely structural and externally induced, rather than driven by excessive domestic demand. According to him, geopolitical tensions involving Iran, Israel, and the United States had triggered fresh volatility in global energy markets, worsening transportation, logistics, and manufacturing costs in Nigeria. The CPPE boss maintained that the broader goal of macroeconomic management should not be limited to lowering inflation figures alone but should also include supporting productivity, competitiveness, industrialisation and sustainable job creation. He therefore urged sustained fiscal discipline, stronger policy coordination, and continued measures to preserve investor confidence amid mounting global uncertainty. That is why Cardoso’s repeated emphasis on fiscal collaboration is important. Monetary policy can slow demand and stabilise expectations, but it cannot fix bad roads, insecurity, food supply bottlenecks, port delays or power shortages. If those structural problems persist, the CBN may be forced to keep rates high for longer than businesses want.

N105BN CASH RETURNS TO BANKS AFTER FEBRUARY RATE CUT

Cash held outside the banking system fell by N104.76bn between February and April 2026 following the Central Bank of Nigeria’s decision to lower interest rates at its first Monetary Policy Committee meeting of the year, findings by The PUNCH have shown. Data obtained from the CBN’s money and credit statistics indicated that currency outside banks declined from N5.19tn in February 2026, when the MPC reduced the Monetary Policy Rate to 26.5 per cent, to N5.08tn in April 2026. The figures showed that cash held outside bank vaults dropped by 2.02 per cent within the two-month period following the rate cut. The apex bank, however, did not release currency data for March 2026, making a month-on-month comparison impossible. Further analysis of the data showed that total currency in circulation also declined during the review period, dropping by N63.46bn from N5.71tn in February to N5.65tn in April. The proportion of currency circulating outside the banking system also moderated slightly. Currency outside banks accounted for 90.03 per cent of total currency in circulation in April 2026, compared with 90.87 per cent in February and 94.33 per cent in December 2025. The development suggests that a marginally larger share of cash remained within the banking system following the February MPC decision. Compared with December 2025, currency outside banks fell by N324.16bn from N5.41tn to N5.08tn, representing a decline of 5.99 per cent. The figures point to tighter liquidity retention within the banking sector despite the reduction in the benchmark interest rate. However, despite the recent moderation, cash levels remained above the figures recorded in the corresponding period of 2025. Currency outside banks increased by N515.58bn from N4.57tn in April 2025 to N5.08tn in April 2026, representing an 11.29 per cent year-on-year rise. Similarly, currency in circulation rose by N631.54bn from N5.01tn in April 2025 to N5.65tn in April 2026, translating to a 12.60 per cent increase. The figures show the continued dominance of cash transactions in the economy despite the growth of digital payment channels. Meanwhile, reserves held by banks with the CBN rose sharply within the review period. Bank reserves increased from N32.74tn in February 2026 to N34.60tn in April 2026, reflecting an increase of N1.86tn, or 5.68 per cent. On a year-on-year basis, reserves rose by N4.88tn from N29.72tn in April 2025, representing a 16.43 per cent increase. The rise indicates that banks maintained stronger liquidity buffers even after the apex bank eased monetary policy in February. The PUNCH had earlier reported that the CBN reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent from 27 per cent at the 304th meeting of the MPC held in Abuja. Despite the decline in currency circulation, Nigeria’s broad money supply rose to N124.99tn in April 2026 from N123.12tn in February 2026, indicating an increase of about N1.87tn within the two-month period. The increase was driven largely by growth in net domestic assets, which rose from N97.55tn in February to N100.97tn in April 2026.

CBN EXTENDS POS GEO-FENCING DEADLINE TO AUGUST 1

The Central Bank of Nigeria has extended the enforcement of Point-of-Sale terminal geo-fencing to August 1, 2026, giving financial institutions and payment service providers additional time to comply with the regulatory requirement aimed at strengthening oversight of electronic payment channels. The directive was contained in a circular dated May 29, 2026, and obtained from the CBN’s website on Friday. The circular was signed by the Director of the Payments System Supervision Department, Dr Rakiya Yusuf. Addressed to Deposit Money Banks, Microfinance Banks, Mobile Money Operators, Switching and Processing Companies, Payment Terminal Service Providers, Payment Solution Service Providers, Super Agents, and other licensed operators in the Nigerian payments ecosystem, the circular announced a revision to the policy’s implementation timeline. The CBN stated that the decision followed engagements with stakeholders and considerations arising from the operationalisation of an earlier circular issued on August 25, 2025, which covered migration to ISO 20022 standards for payments messaging and the mandatory geo-tagging of payment terminals. The PUNCH earlier reported in August 2025 that the CBN directed that all PoS terminals in the country be geo-tagged within 60 days as part of measures to curb fraud and strengthen oversight of digital payments. The latest circular read, “Further to the Circular with reference number PSS/DIR/PUB/CIR/001/001 dated August 25, 2025 on migration to ISO 20022 standards for payments messaging, mandatory geo-tagging of payment terminals, and various stakeholders’ engagement on the subject to address the operationalisation of the Circular, the Central Bank of Nigeria has considered and approved the following.” The apex bank announced two key adjustments to the framework. First, it increased the permissible geo-fence radius for PoS terminals from 10 metres to 70 metres. Secondly, it postponed the enforcement date for compliance with the geo-fencing requirement. The circular stated, “Geo-fence radius is hereby increased from 10 metres to 70 metres,” and added that, “Enforcement of PoS Terminal Geo-fence is extended to August 1, 2026.” Geo-fencing requires PoS terminals to operate within approved geographic locations associated with merchants and agents. The measure is designed to improve transaction monitoring, reduce abuse of payment channels, and strengthen the integrity of the payments system. The CBN directed all affected institutions to submit evidence of compliance before the new enforcement date. The circular read, “Evidence of compliance to the above should be addressed to the Director, Payments System Supervision Department via paymentdata@cbn.gov.ng not later than July 31, 2026.” The regulator also instructed financial institutions to address outstanding technical and operational challenges with the National Central Switch to facilitate the smooth implementation of the policy. “Financial institutions are required to resolve all operational issues with the National Central Switch within the stipulated timeline to ease compliance,” the circular stated. The extension is expected to provide operators additional time to complete system upgrades, align terminal locations with regulatory requirements, and address operational bottlenecks before enforcement begins in August.

PERSONAL LOANS HIT N1.96TN AS CONSUMER CREDIT GROWS

Personal loans granted by Nigerian banks rose to N1.96tn in January 2026, accounting for more than half of the country’s total consumer credit, according to the latest Economic Report of the Central Bank of Nigeria.  The report, obtained from the CBN website by Sunday PUNCH on Friday, further showed that total consumer credit outstanding increased by 0.79 per cent to N3.81tn in January from N3.78tn in December 2025, driven entirely by growth in personal lending. The apex bank stated, “Consumer credit outstanding increased by 0.79 per cent to N3.81tn, from N3.78tn in the preceding month. The increase in consumer credit was due solely to the rise in personal loans by 5.95 per cent to N1.96tn from N1.85tn, which constituted 51.44 per cent of total consumer credit.” The report showed that retail loans declined by 4.15 per cent to N1.85tn from N1.93tn in the preceding month, accounting for the remaining 48.56 per cent of consumer credit. The rise in personal loans came as credit to the broader economy recorded marginal growth during the review period. According to the CBN, total credit to the economy rose by 0.17 per cent to N57.41tn in January from N57.32tn in December 2025. The bank attributed the increase mainly to higher lending to the services and agriculture sectors. It stated, “The growth was driven primarily by the 0.12 and 2.77 per cent increase in credit to the services and agriculture sectors, respectively. Credit to the industry sector, however, declined by 0.24 per cent.” Sectoral analysis showed that the services sector remained the largest recipient of bank credit, accounting for 56.98 per cent of total lending, while industry and agriculture accounted for 36.55 per cent and 6.47 per cent, respectively. Credit to agriculture increased to N3.81tn in January from N3.71tn in December, while lending to the services sector rose to N32.86tn from N32.71tn. Industrial sector credit stood at N21.21tn, compared with N20.99tn in the preceding month. Within the services sector, finance, insurance, and capital market activities attracted N9.16tn in credit, while trade and general commerce received N5.54tn. Manufacturing, the largest component of industrial credit, accounted for N6.37tn, while power and energy received N1.59tn and construction N2.44tn. The report also indicated that broad money supply contracted during the month as tighter liquidity conditions persisted in the banking system. According to the CBN, broad money supply declined by 1.50 per cent in January, largely reflecting a reduction in net foreign assets, while the banking sector remained stable and resilient, with key prudential indicators staying within regulatory thresholds. At the end of the 305th meeting of the CBN’s Monetary Policy Committee, the CBN Governor, Olayemi Cardoso, said credit to SMEs had begun to improve. According to him, new credit to the SME sector rose to about N199bn in April 2026 from N153bn in March, particularly at the retail end of the market. He said the general category accounted for 94.73 per cent of new credit facilities, while general commerce accounted for 2.46 per cent. He added that SME credit was not the sole responsibility of the CBN, noting that the Ministry of Industry, Trade and Investment, the Bank of Industry, and fiscal authorities also had roles to play. The apex bank, he said, would act more as a catalyst by improving the lending ecosystem. This was as the MPC retained the benchmark interest rate at 26.5 per cent, citing rising external risks, renewed inflationary pressure, and the need to sustain exchange rate stability. The decision came after Nigeria’s headline inflation rose for the second consecutive month to 15.69 per cent in April 2026 from 15.38 per cent in March, according to the latest Consumer Price Index report released by the National Bureau of Statistics. Food inflation also increased to 16.06 per cent in April from 14.31 per cent in March, reflecting higher transportation and logistics costs as well as seasonal pressures, while core inflation moderated to 15.86 per cent from 16.21 per cent. However, the President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, faulted the MPC decision and called for a reduction in rates at the next MPC meeting. “Many of us were very hopeful that the interest rate would come down. We believe that lowering the interest rate will go a long way to support more access to funding for SMEs and will also make it more affordable,” Egbesola said. He said the retention would worsen the challenges facing businesses and households already struggling with rising energy costs and inflation.