Edition 13, May 27, 2026
When the National Bureau of Statistics published Nigeria’s first-quarter GDP data on Monday, it confirmed something the equity market’s 60-percent year-to-date return had been quietly asserting for months: the reforms are working. Real output expanded 3.89 percent year-on-year in Q1 2026, the fastest first-quarter pace in a decade and a clear step up from 3.13 percent in the corresponding period of 2025. Agriculture rebounded sharply, growing 3.15 percent after near-stagnation at 0.07 percent a year earlier. Construction expanded 6.38 percent. Financial services grew 8.54 percent. Telecommunications continued to pull growth in every direction it touches. An economy that spent much of 2023 and 2024 in visible distress delivered its strongest opening quarter in ten years.
The complication is that this data arrived in the same week the Central Bank of Nigeria reaffirmed it will not ease monetary policy to match the momentum. The benchmark rate remains at 26.5 percent. The economy is accelerating, and the cost of money has not moved. Unpacking that tension is where the serious analytical work begins.
Market Wrap
Nigeria’s equities market spent most of the coverage window consolidating. The NGX All-Share Index closed the official trading week ending Friday May 22 at 249,712.37 points, retreating 0.25 percent from the prior week’s 250,330.92. Market capitalisation settled at N160.077 trillion, a loss of approximately N370 billion over five sessions. Weekly turnover contracted to 3.8 billion shares worth N161.76 billion in 334,745 deals, roughly half the prior week’s volume, as investors paused to absorb the policy signal and incoming macro data. The Harmattan coverage window closed on Tuesday May 26 with the All-Share Index at 249,738.84 points and market capitalisation at N160.09 trillion, equivalent to approximately $116.4 billion at the NFEM closing rate of N1,375.41 per dollar. Year-to-date, Nigerian equities have returned 60.49 percent in naira terms.
60.49 percent in naira since January. Even after a week of drift and measured caution, the market has not retreated. It is resting.
Among the week’s notable movers, Associated Bus Company led the gainers at 44.82 percent, followed by Academy Press at 29.79 percent and University Press at 28 percent. On the losing side, Sovereign Trust Insurance declined 22.45 percent, followed by Trans-Nationwide Express and Chemical and Allied Products, as profit-taking rolled through industrial and insurance counters. Sterling Financial Holdings, Fidelity Bank, and Access Holdings combined for more than a quarter of total equity turnover, a reminder that the market’s liquidity engine still runs through the banks.
Dollar figures are computed at the NFEM closing rate on the final day of the coverage week. Currency movement is therefore embedded in the reported return.
The Big Story
The MPC held its 305th meeting on May 19 and 20, with all eleven members present, and voted unanimously to retain the Monetary Policy Rate at 26.5 percent, the Cash Reserve Requirement at 45 percent for commercial banks and 16 percent for merchant banks, and all other parameters unchanged. Governor Cardoso framed the decision as strategic patience: headline inflation has risen for two consecutive months, reaching 15.69 percent in April, and although the committee believes the increase reflects temporary external shocks rooted in the Middle East conflict and elevated global energy prices, it is not prepared to risk reigniting price pressures by loosening policy prematurely. Gross external reserves stood at $49.49 billion as of May 15, providing more than nine months of import cover. The committee also welcomed S&P’s upgrade of Nigeria’s sovereign rating to ‘B’ from ‘B-’ on May 15, completing a sweep of positive rating actions alongside Fitch and Moody’s upgrades in 2025, and positioned the hold as a defence of newly earned credibility rather than a concession to growth sacrifice.
Then came Monday’s GDP data, and it reframed the decision entirely. The CBN is not holding rates because the economy needs restraint. It is holding rates because the global environment makes any move feel premature, and because a central bank that has just won back its credibility has every reason to be careful with it. The NBS confirmed the non-oil sector contributed 96.08 percent of total output in Q1, growing 3.94 percent in real terms. Services, at 57.73 percent of GDP, remained the dominant structural force. Against this backdrop, the critical question for the July MPC meeting is whether the inflation re-acceleration is genuinely transitory, as the committee argues, or whether it is embedding in expectations. Some analysts now project headline inflation approaching 16.5 percent in the coming months. If that forecast proves correct, the CBN’s patience will be tested more severely than the current reserve position or rating trajectory can offset.
For investors, the structural signal is clarifying: Nigerian equities are delivering real returns in a high-rate environment because corporate earnings are growing faster than the cost of capital is biting, at least for now. That dynamic has a ceiling, and the July MPC meeting will be the most important single reading of where that ceiling sits.
Nigeria’s Money
The Q1 GDP data is also, read carefully, a portrait of the informal economy’s contribution to national output. Trade accounted for 17.89 percent of real GDP in the quarter, the single largest sectoral share, growing at 2.08 percent. Crop production drove agriculture’s rebound. Road transportation contributed. These sectors are not populated by the firms that file quarterly results. They are populated by traders in Onitsha and Alaba, smallholder farmers in Benue and Kano, and truck drivers linking the north to Lagos. The growth in Nigeria’s headline GDP is, to a very significant degree, the growth of people who are invisible to the formal financial system but not to the economy.
The power sector complicates that story directly. Electricity, gas, and air conditioning contracted 15.30 percent in real terms, the sharpest sectoral decline in the entire report. That contraction is a market woman running a generator, a small manufacturer losing hours daily to load-shedding, a cold-chain operator who cannot scale because reliable power is not available at a price the business can sustain. Until the power gap closes, the distance between Nigeria’s macro story and the daily experience of the economy will remain wider than the headlines suggest.
Africa Watch
The African Development Bank launched its 2026 African Economic Outlook on Tuesday May 26 at its Annual Meetings in Brazzaville, under the theme of mobilising Africa’s development financing at scale in a fragmented world. One data point carried particular weight: Africa’s total stock market capitalisation reached $1.2 trillion by end-2024, nearly sixfold growth over two decades, yet activity remains concentrated in four markets: South Africa, Egypt, Nigeria, and Morocco. The report frames the continent’s capital markets challenge precisely: domestic savings exist, investor appetite is building, but the infrastructure to channel one toward the other at scale is still under construction. For the Dangote Refinery IPO, which aspires to be a pan-African listing event, the AfDB’s framing is instructive and sobering in equal measure.
What to Watch
Two events now shape the near-term horizon. On Thursday May 29, First HoldCo holds its 14th Annual General Meeting, where shareholders vote on the proposed N253 billion capital raise targeting a N1 trillion paid-up capital base. The board’s success or failure in framing the terms of that raise will set an important benchmark for how Nigeria’s other recapitalising banks approach the final stretch of their own capital journeys, particularly given First HoldCo’s Q1 2026 profit before tax growth of 72 percent year-on-year, the strongest first-quarter print among its FUGAZ peers. Separately, any announcement from the Securities and Exchange Commission on the Dangote Petroleum Refinery and Petrochemicals prospectus remains the single most consequential pending development in the Nigerian capital markets. The filing has been with the SEC since April, and with August’s subscription window approaching, the clock for regulatory clearance is running.
The week asked investors to sit with two truths at once: that Nigeria is delivering its strongest growth numbers in a decade, and that the majority of the people producing that growth have not yet felt it arrive in their daily lives. That is not a contradiction worth resolving quickly. It is a map of the distance that remains between a stabilising macro story and a transformed economy, and for those reading it carefully, the journey looks more investable than it has in years.
Nothing published in Harmattan constitutes financial advice. Always consult a qualified financial adviser before making investment decisions.
Bestman Eleanya Founder, Harmattan hello@harmattanintel.com | harmattanintel.substack.com