By Abigail David

The Central Bank of Nigeria (CBN) has launched the Nigerian Overnight Financing Rate (NOFR), a new transaction-based benchmark interest rate aimed at improving transparency, strengthening monetary policy transmission and deepening the country’s financial markets.

Speaking at the launch in Abuja on Monday, CBN Governor Olayemi Cardoso described the initiative as a major reform designed to align Nigeria’s financial system with global best practices and enhance confidence among investors and market participants.

According to Cardoso, NOFR is a transaction-based overnight secured interbank financing rate that reflects the actual cost of overnight funding in the Nigerian money market.

“The introduction of NOFR represents a significant reform that reinforces the Central Bank of Nigeria’s commitment to building a more resilient, efficient and credible financial services sector,” he said.

He explained that the benchmark was developed in collaboration with the Financial Markets Dealers Association, with technical support from the European Bank for Reconstruction and Development, to provide a more transparent and reliable reference rate for pricing financial instruments and managing liquidity.

Cardoso noted that transaction-based benchmarks reduce the risk of manipulation, improve price discovery and enhance market integrity, ultimately supporting the growth and credibility of Nigeria’s financial markets.

He added that the new benchmark would strengthen monetary policy transmission, improve the pricing of loans and wholesale deposits, support the development of financial products and boost domestic and international investor confidence.

Also speaking at the event, Deputy Governor for Economic Policy, Philip Ikeazor, described the launch as a major milestone in the evolution of Nigeria’s financial markets, saying it reflects the country’s commitment to building stronger financial infrastructure.

Representing Access Bank Managing Director Roosevelt Ogbonna, the bank’s Group Head of Treasury, David Enilolobo, said the initiative was a structural reform that would improve market credibility and attract greater investment into the financial sector.

The CBN had earlier announced the introduction of the Nigerian Overnight Financing Rate in April 2026 as part of ongoing efforts to enhance transparency and efficiency in Nigeria’s money market.

By Abigail David

Nigeria is pursuing an ambitious expansion of its electricity sector, targeting 209,000 megawatts of installed solar power capacity by 2050, with 53 large-scale renewable energy projects valued at about $11 billion currently underway.

According to a report by IIR, the projects reflect growing investment in Nigeria’s renewable energy sector and are expected to play a key role in the country’s long-term energy transition and efforts to improve electricity access.

Alongside utility-scale projects, the Federal Government is expanding rural electrification through a nationwide solar mini-grid programme led by the Rural Electrification Agency (REA). The initiative involves the deployment of more than 1,300 mini-grids and off-grid systems, including 250 interconnected mini-grids linked to the national grid.

The programme is backed by $750 million in public funding and is projected to attract an additional $1.1 billion in private investment.

REA Managing Director Abba Aliyu described the project as one of the world’s largest publicly funded renewable energy initiatives, adding that it aims to provide electricity to 17.5 million Nigerians within three years while positioning the country as a renewable energy hub in Africa.

Nigeria has already installed more than 1,000 mini-grids, while the World Bank-backed Distributed Access through Renewable Energy Scale-up programme continues to support rural electrification and reduce dependence on diesel generators.

The Federal Government aims to increase renewable energy’s share of the electricity mix to 30 per cent by 2030 and 82 per cent by 2050 as part of its net-zero emissions target for 2060

By Abigail David

The Federal Government spent N12.63tn on debt-related obligations between January and September 2025, exceeding the prorated budget allocation of N10.74tn by N1.90tn, according to the third-quarter Budget Implementation Report released by the Budget Office of the Federation.

The report showed that debt servicing accounted for the bulk of the expenditure, rising to N12.52tn against a budget provision of N10.45tn, resulting in an overrun of N2.07tn or 19.8 per cent.

A breakdown of the figures revealed that domestic debt servicing consumed N6.23tn, surpassing its allocation by N832.42bn, while foreign debt servicing reached N6.30tn, exceeding the budget by N1.24tn.

The data further indicated that debt servicing alone absorbed 67.2 per cent of the Federal Government’s retained revenue of N18.63tn during the period. When sinking fund payments are included, debt-related obligations accounted for about 67.8 per cent of total revenue.

This means that for every N100 earned by the Federal Government, about N67 was used to service debts, leaving only N33 for salaries, capital projects, overheads and other government obligations.

The report also highlighted a significant revenue shortfall, with actual revenue of N18.63tn falling N12.03tn below the projected N30.67tn for the first three quarters of the year.

In the third quarter alone, government revenue stood at N7.70tn, representing a shortfall of N2.52tn from the quarterly target of N10.22tn. The Budget Office attributed the underperformance largely to weaker-than-expected oil revenues despite improvements in non-oil collections.

Rising debt obligations continued to constrain capital spending, with only N3.10tn released for capital projects during the period, compared to a budgeted N17.58tn. Debt-related payments were therefore more than four times the amount spent on infrastructure and other capital investments.

The report warned that the high debt service-to-revenue ratio was limiting fiscal space and underscored the need for stronger revenue mobilisation and expenditure reforms.

Meanwhile, Finance Minister, Taiwo Oyedele, said the government is exploring options to refinance expensive debt and secure additional funding to address the country’s budget deficit.

Speaking in an interview with Bloomberg TV, Oyedele said favourable market conditions and higher crude oil prices present an opportunity for Nigeria to access financing at better terms.

He added that discussions were ongoing with the World Bank and other multilateral institutions, while investor confidence had improved following recent economic reforms.

Economists have urged the government to reduce dependence on borrowing by expanding revenue sources, implementing tax reforms, selling non-strategic public assets and increasing private-sector participation in infrastructure financing.