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Zero Equilibrium® on the Central Bank of Nigeria's Monetary Policy Committee Rate Decision:

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– By Chinedu Okoye  Introduction: On May 20th, the central bank of Nigeria @cenbank MPC opted to hold monetary policy rates, as expected by Zero Equilibrium Economists, and also keep Cash Reserve Ratio (CRR) at 45%. Key decisions of the MPC • Hold the Monetary Policy Rate at 26.5%, • Retain the Standing Facilities Corridor around the MPR at +50/-450 basis points. •Retain Liquidity Ratio at 30% • Retain the Cash Reserve Requirement (CRR) 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. A Possible Overtightened Market: The Blurring Lines Between Liquidity Tightening. Holding CRR for DMBs at we view as an essential tightening, cause besides the high CRR is also a liquidity ratio of 30%. And as such, ZE fears this could actually be more contractionary, and driven not by monetary factors but structural and fiscal fears. In Nigeria, the transmission mechanism of MPR alone is more or less muted ...
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Fintech MFBs v Commercial Banks in Nigeria: Competitive or Complementary Institutions?

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– By Chinedu Okoye                           Executive Summary: • The Nigerian banking sector is currently and increasingly being defined by a structural split between capital-heavy commercial banks and distribution-driven fintech MFBs. This divide points out institutional differences, and a deeper separation between balance sheet strength and transaction velocity. • Commercial banks dominate deposits, assets, and long-term credit, while fintechs are rapidly capturing payments, user activity, and short-term lending. This divergence is driven by differences in funding structure, regulatory constraints, and cost of capital. • Fintech MFBs, with lower reserve requirements and minimal legacy costs, price risk at a premium, and are able to offer higher savings yields from significantly higher lending rates.  • On the flip side, Commercial banks operate within tighter regulatory corridors, maintain lower ma...
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How Far Could the Naira Go?: A Zero Equilibrium® Analytical Brief on the Nigerian Local Currency.

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By Chinedu Okoye  The Naira strength has persisted through the wars, as the central bank had sufficient reserves for interventions to smoothen out liquidity squeezes. The closing of passage through the Straits of Hormuz thoug it pushed oil prices higher and by extension oil revenues, had a double whammy effect from an increase in already energy prices. However, the reopening of the Strait of Hormuz after a brief spell of geopolitical tension has delivered an almost immediate recalibration across global markets. As Oil flows are expected to normalize, risk premium compressed, and the reflexive safe haven US to lose some of its urgency. A narrow window, through which the Naira breathes, but not relief in the structural sense. It is supply relief, and not solvency or diaporan remittance dependency repair. At the surface, the mechanics looks pretty straightforward. A weaker USD eases imported inflation pressures and softens the exchange rate pass-through. Simultaneously, re...
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Zero Equilibrium FX Note: Naira Mean Reversion?

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1.0 Outlook v Reality: In our paper “ ZE 12-Month Naira Outlook ” we posited a bearish to nuetral Naira exchange rate in 2026, September. That thesis has three scenarios, a strong case, base case and bear case scenario. In the paper the implied forward suggest led a bid-ask spread of N1,703/$ - N1,793 which implied  a “+14.3% to +19.7% USD appreciation versus the spot rate”  as at the time of the article. Strong, Base and Worst Case Scenario: Strong Case Scenario; N1450 - 1550/$; Baseline Scenario; N1535 - N1600; and, Worst case scenario of N1700 - N1950/$ (ZE September 2025 12+Month Naira Outlook Pictogram) Since the advent of the year 2026, the Naira strengthened against the USD so much so that the Central Bank of Nigeria (CBN) did a reverse mop up (buying dollars) to stem the steep rise in the Naira. Market sentiments however show a different picture as the NAFEM-BDC spread widenes from N21.45/$ to about N45/$ approximately. We discuss the new bearis...
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Shadow Credit Dominance and Monetary Transmission Failure in Nigeria: From Constraint to Exploitation

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– By Chinedu Okoye  Introduction and Summary: This paper dicuses the over extended tightening of monetary policy in Nigeria, giving the exorbitant rates in the non-bank financial sector. From the inception of demand management policies, monetary policy tools has undergone a series of regulatory changes, cyclical downturns, etc, however this has also been accompanied by intense periods of success on an annualized average. This has not been unique to Nigeria but a general occurrence amongst all central banks. Now, whilst the availability of credit has increased, as new Fintech Apps (non-bank) lenders exploited a gap, seen as the regulations which banks abide by, is somewhat restrictive, and some of these bank are as a result concentrating on individuals and corporates and with lesser risk profile. As a result the Fintech based credit companies (or shadow banks), absent regulations took the initative and considerable risk, to fill this gap and also capture the unbanked. Th...
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Is the NGX All Share Index Overvalued? : Zero Equilibrium® Macro-Based Analysis if the Nigerian All Share Index from a Minskian Perspective.

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– By Chinedu Okoye  Summary: • The NGX 30 growth closely tracking the broader NGX ASI on an intraday, monthly and annual basis  (+0.53% vs +0.54%), shows a balanced growth in the index as large caps aren’t lagging while small/mid caps aren’t outperforming. • The NGX 30 provides the bulk of influence as it accounts for roughly 70% of the ASI, with Banking (30%), MTN (25%), Industrials (20%), Oil & Gas (7.5%), Consumer Goods (7.5%), and other stocks (10%). • The rally is powered by both institutional money (pension funds, asset managers) and retail participation, with visible large block trades confirming broad-based and synchronized market activity. • A Minsky moment would not be surprising as the market is likely in the Speculative phase, where core drivers rise with the rest of the market, but some stocks remain closer to Hedge or Ponzi phases, making the NGX 30 vs ASI divergence and small/mid-cap optimism early warning signals. • The market shows healthy expa...
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Zero Equilibrium® Markets and Macro Weekly Report:

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- By Chinedu Okoye  Summary: • This week saw a divergence between developed‐market indexes, as European and UK stocks ended the week higher, as did Japan’s Nikkei. By contrast, US indexes slipped with the Dow Jones Industrial Average (DJIA), NASDAQ and S&P 500 all down by over 1% on the week. • The Nigerian equity markets pushed higher on rising oil prices and bargain‐hunting, with the NGX All-Share Index (ASI) up seven-tenths of a percentage point to N198k. This is as energy stocks led gains, followed by industrials and Telco (MTNN). • Oil prices continued their rally. WTI crude climbed above $98.70 and Brent $103.14 by week’s end (roughly +50% over the past month), reflecting tight Middle East supply.  • Precious metals weakened as gold eased (to $5,051.10/oz on Mar.13) and silver fell further to $81.343, outpacing Gold on the weekly and monthly opposite directions. As industrial metal copper stayed down, extending monthly declines. • Global bond prices slid ...
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