₦airaland Forum

GeneralDae:
True, you answered it in your last paragraph. More dollars have come in through FPI’s in 2025 that imitates the 2014/2015 levels. Only 2019 comes close in the last 10 years.

If that’s the case, we should see the exchange rate drop significantly—after all, it’s a free float, just like how stocks fall when someone is dumping.

GeneralDae:
I also don’t buy the argument that floating allows a currency determine its true value. So called true value is what marketers and investors are willing to price it at at that time and must not necessarily be determined because you floated or did not float. Governments float however, in order not to drain their reserves because like in the filling station example, people no longer see the need to queue at filling stations when the price at black market is thesame and you are likely to get it faster.

My analogy may not be 100% similar but I used it to highlight the similar market forces at play.

You are right that demand for dollars reduced because it’s high but when I view our trade data, it hasn’t been that significant. For instance, compare imports of manufactured goods and raw materials in Q1 2023 to Q2 2025 or even Q4 2022 (Q4’s generally see increased imports) to Q2 2025. I don’t see that significant drop in imports but I would do the calculation for you.

While you look at the data presented by the government, let me approach it logically. There’s no way we could have the minimal reduction you claim and still see the price holding at ₦1,500 for this long. The whole idea behind floating is to raise prices to limit demand. If the same quantity is being maintained as before, the price will keep climbing until demand falls to a level the CBN can manage. It’s the same principle with everything else—if the demand for bread is too high, bakers will raise prices to discourage some buyers until demand becomes manageable. The only exception would be if significantly more dollars were coming in, enough to cushion the old level of demand.

GeneralDae:
There is supply now for CBN and banks which means majority of people who normally get from official sources do not have to depend on aboki.
Just like we don’t have fuel scarcity at the moment, the black market guys are now more passive currently because no queues at filling stations (official channels).

I don’t think your comparison is correct. Unlike now, when we have fuel in abundance, dollars are still scarce. What’s really happening is that the high price has reduced demand—there’s less appetite for it because of the cost. The other argument, that floating allows the price to find its true level, also has its problems. As stock traders, we know that the price of a stock is rarely its true value; it’s either overshooting or undershooting and mostly depends on how it’s presented. So, floating may not necessarily lead to true value discovery.

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chimex38:
Bulk of GTCOs 1Trillion PBT H1-2024 came from forex unrealised gains of ₦630bn shown below. Ballooing non cash-backed EPS.
So this years EPS is cash backed in comparison.

They improved as much as ₦28bn on other Fixed-income traded instruments and Forex gains from a previous loss position!
That's efficiency in portfolio reallignment.

Yeah, this is what emotional players don’t see. Their approach is to simply look at EPS, conclude that it’s several times lower than last year, and bam—label it poor—without looking any deeper. Anyway, let them drag it down; that’s allowed.

unite4real:
have you looked at the Asymmetric corridor?. that is where the headline lies

Yeah, it says the MPR is between 29.5% and 24.5%. Banks can borrow at 29.5% while they lend to the CBN at 24.5%. So what?

Same argument as before: the MPR was below 20% for years before this administration came in and pushed it to 27.5%. Now they’ve reduced it by just 0.5%—not even up to 1%—and some people are jubilating. It’s almost as if General is Cardoso’s brother.

GeneralDae:
50 bps cut. Cardoso, na man you be.

@awesomeJ you were spot on.

Lol, 50 bps is just a 0.5% cut in the MPR. Let’s save the celebration for when the MPR gets to 20%.

chimex38:
are both not Audited?
Zenith(PwC)
GTCO(EY).
Or is there another audit?

Sorry, I meant the final annual report that shows the complete picture.

chimex38:
The downside is:
They are paying against old OS unlike Zenith.
The upside is: they are paying from their profit unlike Zenith paying from reserve if ayam not mistaken.

Let’s wait and see the audited results first.

Potvalor:
It’s not just about the poor interim dividend. There was a massive drop in EPS and in comparison with Zenith’s Q2 results, GT might look overpriced so I suspect some sell-off from GT to key into Zenith. A company is only as good as its recent result, so it’s fair business then.

I honestly don’t put much weight on all these EPS figures for banks and financial services, especially when it comes to unaudited results. For banks, dividends are my primary valuation method. Unless there is clear evidence that GTCO won’t pay up to ₦8 next year, I still see ₦112 as fair value.

From the current statement, I also noted that last year GTCO benefited from over ₦600 billion (if I’m not mistaken), most of which came from FX gains—something that hasn’t shown up as strongly this year. So, you’re free to drop the stock as much as you want; that only sets us up for a nice 40–60% gain.

ositadima1:
Why the uproar about GTCO’s interim dividend? The company already paid ₦7 earlier and has now added ₦1, making it ₦8 for 2025. This reaction is all sentiment. What if they had paid ₦6 earlier—still higher than Zenith Bank’s ₦4—and then ₦2 now? You would have been celebrating, even though the total remains the same ₦8.

According to my dividend discount valuation, GTCO should be at a minimum of ₦112. Just wait for the emotional sellers to push it down a bit, then enter. As long as they can maintain this ₦8 dividend—hopefully even increase it next year—the outlook remains strong.

Why the uproar about GTCO’s interim dividend? The company already paid ₦7 earlier and has now added ₦1, making it ₦8 for 2025. This reaction is all sentiment. What if they had paid ₦6 earlier—still higher than Zenith Bank’s ₦4—and then ₦2 now? You would have been celebrating, even though the total remains the same ₦8.

GeneralDae:
I fail to see how your argument counters mine. The NBS and statistical bodies all over the world do not measure compounded rate of inflation from 2 years ago. They simply measure inflation rate year on year and month on month.

"the principle of compounding is at the core of all inflation analysis. . Economists and policymakers understand that the cumulative effect of rising prices over time is what truly erodes purchasing power."

I assume you’re a stakeholder in the government, probably heading some arm of it. Try to be broad-minded—there’s no cause for celebration here, for the reasons I outlined in my previous post.

GeneralDae:
Inflation should even be less than 20% now. The reasons we still have it this high are due to stuff like rent/real estate prices which are up by more than 40% in places like Lagos compared to 2024 and then restaurants still have their items increasing with a rate of increase above 20% YOY. Basic food in the market and perishable goods (which are 44% of the total basket) from my view have only slightly increased since September 2024.
Some have reduced, others stable. Fuel at this time last year was 865/900 and it’s around thesame price today. Inflation rate should be around 15% - 18% to end this year.

You’re trying to sound smart, but your arguments don’t hold up under closer scrutiny. Yes, inflation measures the rate of change in the cost of goods and services, not how far prices have already risen. The problem is that ordinary people feel the compounded effect. Telling them that the rate of increase has slowed down means nothing to someone now paying twice—or even three times—for the same plate of food they bought less than two years ago.

What truly matters to the average person is the compounded inflation over the past two years. Tinubu’s policies drove inflation up astronomically (I’m convinced it was much higher than the 27% reported last year), and now the government is claiming success simply because the pace of increase has slowed. That’s like a doctor taking credit for a patient’s recovery from symptoms caused by the very medication they prescribed in the first place.

Once again, the compounded inflation since Tinubu’s administration began is massive—if not the highest in Nigeria’s history.

yMcy56:
This one pass manage in my opinion.
From 0.30k, to 0.50k.....then to N1.25k
I think Zenith has tried.
Na interim ooo, no be final.
Make some people dey get contentment sometimes.
At least, now we know that the payment of interim is sure by ugaz....

Zenith paid ₦1 last year, so that’s about a 25% increase. It should slowly push past ₦70, and possibly ₦100 (which is my fair value).

Lol, the kind of things you read here. Dangote began building his refinery long before Tinubu’s administration, yet some low-key tribalists are now claiming it is because of Tinubu’s reforms that it started processing. So all that time Dangote was sourcing billions of dollars to put the refinery in place, he was betting on Tinubu eventually coming to power? What a funny bunch of people.

We were all here when NNPC reneged on the quota of stock he was promised, forcing the refinery to import crude from as far away as the USA (which, by the way, I commented on here at the time — why import from far-away USA when we have so many neighboring oil producers?). And let’s not forget the whole saga about “buy crude in naira to ease forex problems,” which NNPC refused. Then suddenly NNPC came up with sham claims that the Port Harcourt refinery had started producing. What’s happening there now?

Wow — the level of delusion here is off the charts.

pafra:
The petroleum tax if implemented will in no way be enough money to boost the economy to one trillion dollar economy. With that in mind internal borrowing will continue.

Note, TB is local borrowing don't allow any body confuse you. Its an economic tool that is very important for many economic reasons.

FPI will pull out their money if TB is no longer lucrative when demand for TB is low CBN have no option, they will increase the interest rate to attract FPI.

Diversifying the economy will improve the country earnings then, reduce any form of borrowing and a better stimulus to the economy.

They have done their best, but can never go further from here with taxes. A lot have to be done

This is what I wanted him to figure out: taxation will not solve inflation or our many economic issues. The government has to do more — insecurity, which is very high now; diversification, as you pointed out; corruption; and other challenges need to be tackled.

You can collect as much tax as you want, but if it is diverted, it will contribute next to nothing. We know very well how funds have been diverted throughout Nigeria’s history. Did we suddenly become different this time around? Are funds not still being diverted as we speak?

nosa2:
Put this response in the context of the initial post and my subsequent comment and re-evaluate your position

handsomebolanle:
I wanted to get into Ellah at 10 but wasn’t able to.
I understand fundamentals but whatever the investor that spent over a billion naira @ 12.5 saw, one need not to climb the mountain to see it. The information is common sense to say something major is coming. Those privy to the information have and are still taking position. Time will reveal and the game is the game.

nosa2:
There is a lot of dumb stolen money in Nigeria oh. Don't assume just because you see a big trade that the trader has sense

Maybe you learned something, maybe not — I’ll keep doing the Lord’s work.

nosa2:
https://www.investopedia.com/investing/surprising-benefits-when-brokers-grade-their-customers/

Average individual investors who trade money are often shoved under the “dumb money” umbrella. If you fall into this category, try not to take offense. The terms “dumb money” and “smart money” were coined by the financial media, not to insult anyone’s intelligence, but to describe different groups of investors.

Big institutional investors and mutual fund companies are labeled “smart money.” These investors have somewhat of an unfair advantage over your run-of-the-mill individual investor. Armed with teams of experienced investment analysts, “smart money” investors can evaluate exactly what’s going on in the market, allowing them to make more informed investment decisions. This does not necessarily mean they always make smart decisions—in fact, plenty of them make bad trades from time to time. They simply have access to valuable information that allows them to make a more educated choice.

On the other hand, the average investor generally does not have the time, experience, or patience to methodically analyze corporate reports or the global economy. Because these investors don’t have access to teams of analysts or carefully compiled data, they often make trades based on instinct or a gut feeling. Consequently, the “dumb money” group tends to buy and sell investments at the worst possible time.

Basically If you invest in the market based on price rather than value then you are dumb money.

You’re going in circles here. How do you know it was price and emotions driving their decision? How do you know it wasn’t an institution placing its money there? What’s your angle in labeling a trade as “dumb money” or “smart money”?

You’re not even a technical analyst. As far as I know, if you don’t have direct knowledge of whether the investor is an institution, the closest way to spot smart money is through charts. Let’s be humble — just because your analysis says a stock is not correctly valued doesn’t mean there aren’t other ways of extracting an edge from the market.

Redoil:
i remember somebody buying 7 million units oando at N65

nosa2:
There is a lot of dumb stolen money in Nigeria oh. Don't assume just because you see a big trade that the trader has sense

I’m really amused when I read posts like this — the assumption that you know all the available information and can therefore judge who is dumb or not. Then the market moves, and you won’t see people like you coming out to apologize when that same stock doubles. Respect everybody’s choices. You don’t necessarily know more than the person who put their money on the line. You don’t know their time horizon, and you don’t know the game he or she is playing.

Also, you don’t judge a decision solely by its outcome. The world is probabilistic — something may work for the wrong reasons, or fail even when the reasoning is sound. Unless you know the reasoning behind a move, don’t judge.

thebargainhunte:
Normalcy will either return today or tomorrow in our market, this is purely speculative. The land is getting greener again after yesterday's selloff.

I hail, Boss. Look at how he used correlation with international markets to rubbish Agba’s Ichimoku mass-bears campaign.

A305:
Keep in mind, Interest rate is high and untouched for at least 2 reasons.

1- To reel in Inflation.
2- To keep FPI in the economy to stabilize Naira/dollar FX.


The goal of CBN is to achieve 15% inflation and build a 1 trillion Naira economy. That was the task Tinubu set for Cardoso.

Efficient Taxation will account for revenue that is now generated from part of the money we give FG via T.bill. so, imagine, if they have enough money from Tax, will they need so much of our money anymore? They will need our Tbills money but not as much, so they will be prompted to cut interest rate to only stimulate outflow and inflow of money supply in the economy.

When that happens, Yield for Tbills will be back to single digit numbers.

But and a BIG BUT!

1- Do we trust the Nigeria system to implement the Tax policy flawlessly?

2- Even if the Tax money are being remitted, Will it truly be enough?

3 - What about the status of hot money like FPI that keep fx stable in the absence of FDI?

4 - How does government intend to pay back previous loans without having a deficit?


These questions and more are the reasons why it isn't easy to fix Nigeria hence, the loan circle continues inflation or not. NO FEAR. Even well Taxed economies like Britian have these challenges.

You did not answer my question. You already pointed out why interest rates was raised but did not include low revenue as one of the reasons. Again, the question is: can taxation reduce or improve the two points you mentioned?

A305:
CBN is in a dilemma at this point. They want stable FX rate, they want reduced inflation yet they want to reduce borrowing within and plan borrowing externally.

Let me break it down:

Nigeria inflation is sticky and VERY STUBBORN so much so that, eventhough the numbers Quarterly reveals inflation is easing, however Month on Month inflation fluctuates, it keeps rising and in some month falls, then rise again. Very stubborn.

If inflation was only reducing and no fluctuation seen; CBN would have cut rates hence T.bills yield will fallen even lower but CBN is freaking scared.

Here is another problem.

Nigeria is debt free from IMF but owing massive debt internally, Internal debts are easy to repay but it's hardly enough to stimulate the economy because think of it like a ponzi scheme that can NEVER crash.
Now, FG is looking to borrow externally because we can and technically, our debt to GDP ratio is good enough to allow us borrow externally. So FG will prefer foreign debt over internal debt, that was why you heard of the new foreign loan news 2 days ago. They want more of those debt if they need to boost spending. Nigeria spending is too low for our kind of economy.

So, if FG gets more of this foreign loans, they won't rely on internal debt as much to kept running the economy, hence CBN will cut rate, Tbills rate will plummet.

But here is where it gets interesting:

CBN needs FPI which has stabilized Naira/Dollar FX rate to 1500 since last year, and they can only get that when they raise interest rate for internal debt. If they aggressively cut rate, FPI will run away, some will pull their money and begin to buy stocks and Equities, that's why CBN hasn't cut rate since the last 3 or 4 quarters.


CBN’s stance so to keep squeezing inflation, even if the economy growth suffers short-term.

One more last reason to note is:

Global conditions (Trump’s tariffs, Fed cuts) could help Nigeria attract more FDI, which will further strengthen the Naira. That is why CBN is hesitant to cut rate.


How does this affect you, thinking rates are going back up?

Prepare for the wild ride because, you will keep experiencing rates like unstable NEPA light and prepare for the fall of rates once Tax laws are fully implemented next year.

Tinubu and Cardoso are really getting things right on this one.

You see the highlighted points — you said inflation is keeping rates high, and then at the end you said effective tax implementation will drop rates. That begs the question: are you saying taxes will reduce inflation?

awesomeJ:
How do you score these goals without shifting goal post??

Cos you wait at 20.5, it builds support at 24, then 6 months later, it's doing full bid at 36, isn't that a tiring wait if you never shift?

It depends on how the support was built. If it was formed from below by being an old resistance that was broken and turned into support, then the price may still return there, even if only briefly. All it would take is some discouraging news or a whale offloading. That 20 is possible.

Agbalowomeri:
In 20 years, the same 10k dollars will still sustain you even if exchange rate don enter 20000

Zenith will be above 350 by then, and dividends will also increase. Investing in good stocks will still outperform devaluation. For example, if a solid portfolio is generating 15 million in profits now, when the dollar reaches 20,000, it will generate over 60 million.

rmx:
For a year ?
That’s just 1.2m a month . Wow

Or its monthly

MrSamsung:
Sorry the bolded, is it annually, monthly, weekly or daily?

There is a big difference between an investment that makes money while you sleep and a salary or hustle. How many people can boast of earning 15 million a year without doing anything at all?

KarlTom:
ELLAH trying so hard to prevent the fall in SP.
They've even changed the title again

At this point, they need to pay for more PR

The problem with Ellahlakes is overambitiousness. You are yet to generate commensurate returns, but you want to expand aggressively. Even Dangote Cement first consolidated in nija with decent profit generation before expanding to other countries.

Streetinvestor2:
This cannot be acceptable for individuals. Does it mean loan for business will not be recognised even when u have evidence via the bank.

Based on my understanding, if you have a registered business, then you can deduct it from the tax due on the business. But, as an individual, interest on loans that are not used for personal housing cannot be deducted from personal income.

Loan Interest Deductibility under the Nigeria Tax Act (2025)

1. Companies (General Business Tax)
Deductible:
• Interest on debt used to generate income (e.g., bank loans, finance leases, bonds, etc.).

Limitations (for loans from related/connected parties):
• Deduction is capped at 30% of EBITDA.
• Any excess interest above 30% is not deductible in that year.

Carry-forward:
• Unused interest (due to the 30% cap) can be carried forward for up to 5 years.

Exemptions:
• This 30% limit does not apply to Nigerian subsidiaries of foreign banks or insurance companies.

2. Individuals
Deductible:
• Only interest on loans for building an owner-occupied residential house.

Condition:
• Must provide documentary proof (e.g., loan agreement, receipts).
• Tax authority can reject the claim if evidence is inadequate.

3. Petroleum Companies
Hydrocarbon Tax (HCT):
• No deduction allowed for loan interest when calculating hydrocarbon tax on crude oil operations.

Petroleum Income Tax (PIT):
• Interest on borrowed money can be deducted if it was genuinely used in petroleum operations.

• Subject to:
o Excess interest rules (30% of EBITDA for connected-party loans),
o Transfer pricing rules, and
o The Third Schedule provisions.

emmaodet:
Agba-baller, please can you explain better how to do this?
Will the broker just sell your shares automatically to pay back themselves?
And if so, won't the tax be taken when they are withdrawing from my account?

I would rather focus on what is clearly stated in the Nigerian Tax Act 2025, not on vague claims without clear direction. Let me explain why this may not be a good idea in this context.

Assume you are a trader with ₦20 million. You spot a good trade and make 100%. Will you then take a loan equivalent to both your gains and principal? I don’t think so—except if the stock pays a solid dividend that can offset the interest, which most trading stocks don’t. The next logical move would be to pull out both your profit and principal from the speculative stock and move them into stable, dividend-paying stocks. At this point, you’ve become an investor by default. Now, you can take a loan and use steady dividends to service it.

But here’s the problem—we are only looking at one side of the coin. If the stable stock keeps appreciating and paying higher dividends, no issue. But what if the reverse happens? You’ll be in a mess. Then you’ll need to keep trading again and again, piling up loans on top of loans, tracking each one. That looks like a pyramid scheme that will eventually collapse.

Why do I say this? Currently, the best dividends hover around 8–10%, while interest rates are much higher. To overcome this gap, you must be both a very skilled investor and trader, capable of spotting stocks with truly solid fundamentals.

There’s also the question of loan interest deductibles, which is actually a feature in the new tax law. But to be eligible, you must be a certified company.

So, my point is—it all depends on context. Just because something works in America doesn’t mean it’s viable here. To me, it looks more like a headache than a solution. To be clear, this is totally different from what Pa Ema does with his loans.

mikeapollo:
@Ositadima and everybody in the house: please confirm this for me before I go crazy:
If one should sell shares and make a profit (chargeable gain) of N200m, you pay tax of N47.9m to govt. going by the new tax law?

Yes, don’t go and dump your Oando, ooo. I think a possible loophole may be to reinvest the amount in the same year and then sell at a small loss — maybe around 4% (Or less).