ZERO EQUILIBRIUM

– By Chinedu Okoye  As of July, 10 2026, Nigeria’s All-Share Index (NGX ASI) [See Chart 1 below) was near record highs while South Korea’s KOSPI had just slumped sharply [See Chart 2]. The NGX ASI stood around 55.65% year-to-date, in local currency terms and 67% in USD terms, making it the world’s top-performing equity market among 92 tracked indices. (Chart 1: NGX All Share Index Year-to-date %∆ in Local Currency Terms. Trading View) By contrast, KOSPI had fallen from a June 19 high of 122% year-to-date gains in local currency terms, before retreating to the 7,475.94 points, to record a +70.45% year-to-date gain in local currency terms, but losing about a fifth of its value in USD terms to slip to a 66% year-to-date gain in USD. (Chart 2: KOSPI Year-to-date %∆ in Local Currency Terms. Trading View) Naturally, such a fall in Korea spooks investors in similar bull EM/FM markets, but Nigeria’s market is supported by different fundamentals. As a res...

– 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 ...

– 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...

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...

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...

– 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...