Dear Subscriber,

Gradual Pace of Disinflation Continues Amid Money Supply Contraction

Nigeria’s money supply tightened for the third consecutive month, shrinking by 1.2% to ₦117.4 trillion in June from ₦119.01 trillion in May. This underscores how firmly the CBN is holding on to its strict monetary policy stance, maintaining the benchmark interest rate at a high 27.5%.

Headline inflation did ease slightly, slipping to 22.22% compared to 22.97% in May, offering a modest sign of relief. However, beneath the surface, food inflation rose to 21.97%, driven by ongoing supply chain disruptions and seasonal demand pressures on key staples. This translates into a heavier burden on household incomes, making it increasingly difficult to afford the food they need.

Interest Rate Pressures Persist Despite Oil Recovery and Telecoms Growth

The impact of elevated interest rates is rippling through key sectors of the economy. In the corporate debt market, bond issuances fell by 33% in H1’25, as soaring borrowing costs forced firms to delay or scale back expansion plans. Conversely, government Savings Bonds gained momentum, attracting investors with yields of up to 16.76%, reflecting a shift toward safer instruments.

Amid the tightening financial conditions, oil output rose to 1.7 mbpd in June, driven by more effective security measures and operational improvements, raising prospects of meeting the OPEC quota. However, foreign direct investment remains a weak point, plunging 70% in Q1’25 as investors favor short-term gains over long-term industrial commitments. Meanwhile, the telecoms sector continues to thrive, with MTN and Airtel reporting a 50% surge in H1’25 revenues, powered by deeper broadband penetration, rising smartphone adoption, tariff adjustments, and sustained infrastructure investments.

This edition of the Unity Bank Digest provides a comprehensive analysis of these economic trends and engaging lifestyle and entertainment stories for your reading pleasure.

Enjoy!