Managing Director and Head of West Africa at JP Morgan, Dapo Olagunju, says Nigeria’s inflation is still one of the highest in the world despite recent drops.
Speaking at the ‘Fitch on Nigeria 2025’ held in Lagos, Olagunju acknowledged Nigeria’s recent economic strides but warned that significant challenges remain. Chief among them is inflation, which, despite falling from 32% last year to the current 16%, still ranks among the highest globally.
“Challenges still persist. We’ve got inflation running at 16%. It’s nice, we’ve come down from about 32% last year, but it’s still one of the highest in the world.”
Olagunju defended the relevance of Nigeria’s recent credit rating upgrade by S&P, describing it as a “transition of confidence.”
“It transforms complex realities into accessible signals that investors, whether they are in London, New York, Singapore, or anywhere, can interpret within seconds.”
He outlined three key benefits of credit ratings: enabling price discovery, expanding market participation, and enforcing governance discipline. “For a country like Nigeria, credible ratings are not just cosmetic—they are the connective tissue between our ambitions and the world’s balance sheet,” he added.
Olagunju also praised Nigeria’s banking sector for its resilience. He said capital adequacy remains strong, profitability is robust, and risk management frameworks continue to evolve despite the FX volatility. He highlighted the sector’s 50% cash-to-debt ratio as a standout metric.
Reacting to Nigeria’s recent Eurobond issuance which was oversubscribed, Olagunju described it as a milestone in investor confidence.
“The government wanted to raise only about $2.3 billion. The book was $13 billion—on the back of zero investor calls,” he revealed. “That didn’t happen by mistake. Authorities had spent the year engaging investors, building trust.”
Group Chief Conduct and Compliance Officer at Access Bank, Femi Jaiyeola, defended the Central Bank of Nigeria’s recapitalisation exercise, saying that the apex bank was trying to build on the quality of capital.
He said Access Bank was the first to meet the new capital threshold, doing so by December 2024 through a rights issue. “It just demonstrates not only the plans we had, but also the depth of the capital market,” Jaiyeola said.
Beyond meeting the CBN threshold, he emphasized the importance of capital efficiency. “How do you deploy the capital to generate returns for your stakeholders and investors? That’s where the challenge is,” he added.
Group Financial Controller for West Africa at UBA, Chukwudubia Okoye, discussed the strategic deployment of capital in line with Basel III requirements.
“One key thing that this capital would also do is to accelerate the actual transition because there are buffers that are required on the Basel III that will be required to keep for the systemic banks. You also have to keep the systemic buffers.”
Okoye also predicted that banks will use capital for regional expansion, technology investment, and SME lending.
“I see banks deploying this capital to regional and market expansion. I see banks deploying capital also in the technology space, both from actual business enablers, in addition to the classical or typical brick-and-mortar expansion drive. Technology will then be used to reach the underserved markets, drive the overall corporate strategies of those banks, and also make investments in the areas of security, data security, and the rest of it. I also see capital being deployed, especially with respect to the core business of banking.”
“I see banks deploying this capital to regional and market expansion. I see banks deploying capital also in the technology space, both from actual business enablers, in addition to the classical or typical brick-and-mortar expansion drive. Technology will then be used to reach the underserved markets, drive the overall corporate strategies of those banks, and also make investments in the areas of security, data security, and the rest of it. I also see capital being deployed, especially with respect to the core business of banking.”