President Bola Tinubu has approved the implementation of a 15% ad-valorem import duty on premium motor spirit (PMS), popularly known as petrol, and automotive gas oil (AGO), also known as diesel. The move aims to align import costs with prevailing domestic market conditions but is expected to raise fuel pump prices across the country.

Presidential Approval and Implementation

The approval was conveyed in a letter dated October 21, 2025, issued by Damilotun Aderemi, the President’s Private Secretary, to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

According to the letter, the FIRS had requested the President’s authorization to apply a 15% import duty based on the Cost, Insurance, and Freight (CIF) value of imported petroleum products. The measure, according to the agency, is intended to ensure fair pricing, reduce fiscal leakages, and promote competitiveness in the downstream sector.

With this directive, analysts estimate that the new duty could push petrol prices higher by approximately ₦99.72 per litre, depending on global crude prices and exchange rate fluctuations.

NNPCL to Review Refinery Operations

Following the announcement, the Nigerian National Petroleum Company Limited (NNPCL) confirmed that it has initiated a comprehensive review of the country’s three state-owned refineries as part of efforts to reduce reliance on imports.

In a post on X (formerly Twitter), Bayo Ojulari, the Group Chief Executive Officer of NNPCL, said the company is exploring multiple strategies to restore refinery operations. These include partnerships with technical equity investors to either upgrade or repurpose the facilities.

“The NNPCL remains optimistic that the refineries will operate efficiently despite current setbacks,” Ojulari stated in an update titled “Update on Our Refineries.”

Despite over $3 billion spent on turnaround maintenance in recent years, Nigeria’s refineries — in Port Harcourt, Warri, and Kaduna — have largely remained non-operational. The 60,000-barrel-per-day section of the Port Harcourt refinery briefly resumed operations before shutting down again, while the Warri refinery remains mostly idle. The Kaduna refinery has yet to restart production.

Rising Fuel Import Costs

Nigeria’s dependence on imported fuel continues to strain foreign reserves and pressure the naira. According to National Bureau of Statistics (NBS) data, the country spent ₦4 trillion on fuel imports in the first half of 2025 alone.

• Q1 2025: ₦1.76 trillion in fuel imports

• Q2 2025: ₦2.3 trillion in fuel imports

• Total (H1 2025): ₦4 trillion

For comparison, total fuel import expenditure for the entire year of 2024 stood at ₦15.4 trillion, highlighting the scale of Nigeria’s import dependence despite multiple refinery rehabilitation projects.

The NBS report also revealed that Nigeria imported ₦208.76 billion worth of petrol from ECOWAS countries in Q2 2025, underscoring the continued importance of regional supply chains in meeting domestic demand.

Outlook

The introduction of the new 15% import duty marks a significant shift in Nigeria’s fuel pricing policy, likely resulting in higher pump prices for consumers in the short term. However, government officials argue that the measure is necessary to align import economics, boost fiscal revenues, and encourage local refining capacity — particularly as the Dangote Refinery and other modular refineries ramp up production.

As Nigeria works toward achieving self-sufficiency in refined products, the effectiveness of this policy will depend on how quickly domestic refineries can come online and offset the impact of rising import costs on consumers.

Unilever Nigeria Plc has posted impressive financial results for the third quarter (Q3) of 2025, achieving strong double-digit growth across key performance metrics. The company’s unaudited interim financial statement for the nine-month period ending September 30, 2025, showed that revenue rose by 50% year-on-year, while profit after tax doubled compared to the same period in 2024.

Strong Revenue and Profit Growth

The consumer goods giant reported a turnover of ₦155 billion, a sharp increase from ₦104 billion recorded in Q3 2024. This growth was attributed to a stronger product portfolio, effective pricing strategies, and increased consumer demand across key categories.

Unilever’s gross profit also climbed 49% to ₦64 billion, reflecting effective cost discipline and operational efficiency. The company’s net profit surged to ₦22 billion, up from ₦11 billion in the corresponding period last year — effectively doubling its bottom line within a year.

Management Commentary

Commenting on the results, Tobi Adeniyi, Managing Director of Unilever Nigeria, said the company’s strong Q3 performance highlights its strategic focus on profitability and brand growth.

“Our Q3 performance reflects the strength of our focus on our power brands, strategic product mix optimization, and disciplined cost management,” Adeniyi stated. “We remain committed to sustaining brand investments, ensuring supply chain resilience, and driving volume-led growth with our robust portfolio.”

He further emphasized Unilever Nigeria’s long-standing contribution to the country’s industrial landscape:

“As a cornerstone of Nigerian manufacturing for over 100 years, we continue to invest locally, expand operations, and build equitable partnerships across our value chain. Our goal remains to brighten everyday life for Nigerians while creating long-term value for our stakeholders.”

Key Performance Highlights

• Revenue: ₦155 billion, up 50% year-on-year

• Gross Profit: ₦64 billion, up 49%

• Net Profit: ₦22 billion, up 100%

• Period Covered: Nine months ended September 30, 2025

Sustained Growth Amid Economic Pressures

Unilever Nigeria’s strong financial showing comes despite a challenging business environment marked by inflation, currency volatility, and rising input costs. The company credited its performance to strategic cost management, localized sourcing, and innovation within its key product categories — including home care, personal care, and food brands.

The results reaffirm Unilever Nigeria’s resilience and adaptability within Nigeria’s fast-moving consumer goods (FMCG) sector. With a diversified brand portfolio and ongoing investments in sustainability and innovation, the company appears well-positioned for continued growth in the final quarter of 2025 and beyond.

African airlines have emerged as the global leaders in air cargo growth, recording a 14.7% year-on-year increase in demand for September 2025 — the strongest performance across all regions, according to the International Air Transport Association (IATA).

African Airlines Drive Global Cargo Momentum

The IATA report highlighted that capacity for African carriers rose 7.4% in the same period, reflecting the continent’s growing significance in global trade logistics. A major contributor to this growth was the Africa–Asia trade corridor, which expanded by 9.6% year-on-year, marking the third consecutive month of positive performance.

This steady rise demonstrates Africa’s strengthening position in global commerce, particularly through partnerships with Asian economies that have boosted cargo volumes and sustained demand.

Global Air Cargo Trends Show Continued Recovery

Globally, air cargo demand increased by 2.9% in September 2025 compared to the same month last year — the seventh straight month of growth. IATA noted that total capacity (measured in available cargo tonne-kilometers, ACTK) also climbed 3.0% year-on-year, signaling steady recovery in global logistics despite economic uncertainties.

According to the IATA data:

• Total demand (CTK) grew 2.9% globally (+3.2% for international operations).

• Total capacity (ACTK) increased by 3.0% (+4.4% for international operations).

“African airlines saw the strongest rise of all regions, with a 14.7% increase in demand and a 7.4% rise in capacity,” IATA said.

Factors Influencing Cargo Performance

The report pointed out that global trade conditions are improving, with goods trade rising 7% year-on-year in August 2025. Meanwhile, jet fuel prices rose 5.4% in September due to a tighter diesel market, even though crude oil prices were lower.

Additionally, the global manufacturing PMI improved to 51.3, its second consecutive month above the expansion threshold, while new export orders edged up to 49.6 — still below 50 but showing progress toward recovery.

Regional Performance Overview

While Africa led globally, other regions also saw varying performance levels:

• Asia-Pacific airlines: +6.8% demand, +4.8% capacity.

• European airlines: +2.5% demand, +4.4% capacity.

• Middle Eastern carriers: +0.6% demand, +5.5% capacity.

• North American carriers: -1.2% demand, -1.5% capacity.

• Latin American airlines: -2.2% demand, +3.1% capacity.

These figures reveal a shift in global trade dynamics, as traditional markets like North America and Europe face stagnation, while Africa and Asia continue to drive expansion.

IATA’s View on Global Trade Shifts

Willie Walsh, IATA’s Director General, attributed the strong performance to structural changes in global trade patterns. He explained that recent U.S. tariff policies and the end of de minimis exemptions have reshaped trade flows, prompting growth along intra-Asian, Asian-African, and Asian-European routes.

“Instead of witnessing a contraction in global trade, the air cargo sector is showing its ability to adapt to evolving market conditions and shifting demand flows,” Walsh stated.

Trade Lane Highlights – September 2025

Air freight performance varied across key global corridors:

• Europe–Asia: +12.4% (31st consecutive month of growth)

• Within Asia: +10% (23rd consecutive month of growth)

• Middle East–Asia: +4.6%

• North America–Europe: +2.6%

• Africa–Asia: +9.6% (third consecutive month of growth)

However, not all trade lanes expanded:

• Asia–North America fell 3.5% (fifth straight month of decline)

• Middle East–Europe dropped 4.6%

• Within Europe declined 1.1%

Outlook

The September figures reaffirm Africa’s growing role in global logistics. As intra-African trade and Asia-linked routes continue to flourish, the continent’s carriers are expected to remain central to air cargo growth through 2026 — signaling both resilience and opportunity in the evolving global trade landscape.

Investor demand for Nigeria’s Federal Government bonds remained exceptionally strong in October 2025, with total subscriptions surpassing ₦1 trillion for the second consecutive month, despite a continued decline in yields.

According to data from the Debt Management Office (DMO), the October auction demonstrated the resilience of investor appetite for government securities even in a lower-rate environment, reflecting strong system liquidity and investor preference for safety.

Yields Decline, but Demand Stays Robust

The five-year FGN AUG 2030 bond cleared at 15.83%, down from 16.00% in September, while the seven-year FGN JUN 2032 bond settled at 15.85%, compared to 16.20% a month earlier.

Ordinarily, falling yields tend to reduce investor interest, but in this case, participation remained exceptionally high. The seven-year instrument recorded ₦1.06 trillion in subscriptions, slightly above the ₦1.03 trillion received in September.

Similarly, the five-year note attracted ₦212.66 billion in bids, only a modest dip from ₦231.79 billion in the previous auction. The continued strength of demand underscores investors’ view of government debt as a low-risk, highly liquid investment option.

Allotments Cut Despite Strong Participation

Despite the trillion-naira subscription levels, the DMO reduced the total amount allotted across both tenors. In October, ₦313.77 billion was allotted, representing a 45.6% drop from the ₦576.62 billion issued in September.

The seven-year bond saw the steepest cut. Out of the ₦1.06 trillion subscribed, only ₦225.97 billion was allotted—less than half of the ₦488.83 billion accepted a month earlier. An additional ₦3 billion was sold through the non-competitive window.

Meanwhile, allotments for the five-year note remained stable at ₦87.80 billion, despite slightly weaker demand.

Analysts say this selective reduction highlights the government’s cautious approach to debt management. By trimming allotments during periods of strong demand, the DMO keeps borrowing costs in check while maintaining investor engagement. It also reflects a broader effort to manage Nigeria’s rising debt burden more prudently.

Demand Outstrips Supply Amid Market Optimism

Total bids for both maturities climbed slightly to ₦1.27 trillion in October from ₦1.26 trillion in September. The DMO had increased its offer size from ₦200 billion to ₦260 billion, but even this larger issuance could not satisfy investor demand.

This sustained oversubscription points to strong liquidity in the financial system, with institutional and retail investors seeking stable returns amid limited alternative assets. The results also suggest that, even with lower yields, FGN bonds continue to serve as a safe haven for investors navigating an uncertain economic environment.

Policy Shift and Economic Backdrop

In September 2025, the Central Bank of Nigeria (CBN) cut the Monetary Policy Rate (MPR) from 27.5% to 27%, marking its first rate reduction in five years. The move followed six consecutive months of declining inflation, with headline inflation dropping to 18.02% in September.

While the rate cut was modest, it signaled a potential shift in the CBN’s monetary stance—from aggressive tightening toward cautious easing. This policy change, combined with declining inflation, likely reinforced investor confidence in the fixed-income market.

The lower yields seen at the October auction reflect these dynamics, as investors adjust to a gradually easing rate environment while maintaining strong demand for risk-free government securities.

Outlook: Further Yield Compression Possible

Analysts expect demand for FGN bonds to remain strong in the months ahead, particularly as liquidity levels stay high and the government maintains a disciplined borrowing strategy.

With the DMO keeping supply below market appetite, yields are likely to face further downward pressure. Unless economic conditions shift dramatically or inflation resurges, investors may continue to accept thinner margins in exchange for the safety and predictability of sovereign debt.

Bottom Line

The October 2025 FGN bond auction confirms that investor confidence in Nigeria’s government debt remains robust despite falling returns.
High demand, even at lower yields, suggests that sovereign instruments remain the preferred choice for investors seeking stability in a still-uncertain macroeconomic climate.

In a groundbreaking move that signals the fusion of artificial intelligence and financial technology, PayPal has entered into a strategic partnership with OpenAI to integrate its digital wallet into ChatGPT, allowing users to seamlessly purchase products and services directly through the AI platform. The collaboration, confirmed exclusively to CNBC, is set to redefine online shopping and position PayPal at the forefront of AI-powered commerce.

The partnership—finalized over the weekend—will officially launch next year and enable millions of PayPal users and merchants to connect directly with ChatGPT’s expanding ecosystem. Through this integration, consumers will be able to search for items, compare options, and complete transactions without ever leaving the ChatGPT interface, while merchants will gain access to a global audience of AI-driven shoppers.

“We’ve got hundreds of millions of loyal PayPal wallet holders who will now be able to click the ‘Buy with PayPal’ button on ChatGPT and enjoy a fast, safe, and secure checkout experience,” PayPal CEO Alex Chriss told CNBC. He added that the move represents the next evolution in digital commerce—where conversational AI meets trusted financial infrastructure.

A New Era of AI-Powered Shopping

This announcement builds upon OpenAI’s Instant Checkout feature, launched last month in the United States. The feature allows ChatGPT users to discover, select, and purchase products directly within the chat interface. Initially, Instant Checkout featured listings from Etsy, with plans to expand to Shopify merchants in the coming months.

At the heart of this innovation is the Agentic Commerce Protocol (ACP)—an open-source standard developed in collaboration with Stripe. The ACP enables end-to-end e-commerce transactions within ChatGPT, covering product discovery, payment authorization, and shipping confirmation. Importantly, the protocol ensures that merchants retain full control over order fulfillment and customer support, while product rankings remain strictly relevance-based—ensuring fair and transparent listings for all sellers.

By integrating PayPal’s payment infrastructure, OpenAI enhances the reliability, speed, and global reach of the Instant Checkout system. With over 700 million weekly users, ChatGPT is rapidly transforming into a powerful digital shopping assistant capable of curating personalized product recommendations, managing transactions, and ensuring secure payments—all in one conversational interface.

Merchant Integration and Payment Security

Under the new arrangement, PayPal will handle the backend financial processes for all ChatGPT-enabled transactions. This includes merchant routing, payment validation, and fraud prevention. Merchants participating in the program will not need to register individually with OpenAI, as PayPal’s existing merchant network—one of the largest in the world—will provide immediate coverage.

“It’s not just about enabling payments,” Chriss emphasized. “It’s about ensuring that every transaction happens within a trusted ecosystem—verified merchants connected to verified consumers through the world’s most secure digital wallet.”

Users will be able to pay using linked bank accounts, credit cards, or stored PayPal balances, while benefiting from PayPal’s established features such as purchase protection, refund management, and package tracking. The integration aims to simplify the online shopping experience while reinforcing consumer trust in digital transactions.

Expanding the Frontiers of Fintech and AI

For PayPal, the partnership marks a pivotal moment in its evolution from a payment processor to a global leader in AI-driven financial innovation. By embedding its services directly into ChatGPT, the company gains access to one of the most widely used AI platforms in the world—unlocking new pathways for user engagement and commerce.

At the same time, OpenAI continues to broaden ChatGPT’s utility beyond information retrieval and productivity tools, transforming it into a transactional hub capable of powering the next generation of AI-commerce. Analysts believe this move could redefine how consumers interact with online marketplaces, eliminating the need for traditional web or app-based shopping interfaces.

Internally, PayPal has also begun integrating OpenAI’s enterprise tools to streamline its operations, accelerate product development, and enhance customer service efficiency—demonstrating the mutual benefits of the partnership.

The Future of Conversational Commerce

With this collaboration, PayPal and OpenAI are laying the groundwork for a new digital economy where conversation becomes the point of sale. Users will be able to chat with an AI assistant, receive product suggestions, ask for reviews, and complete purchases—all within a single, natural dialogue.

As AI continues to blur the lines between information, interaction, and transaction, PayPal’s integration with ChatGPT positions it as the backbone of AI-enabled commerce—bridging the gap between trust, convenience, and intelligent automation.

In essence, the partnership symbolizes the next phase in the evolution of global payments: one where AI not only helps consumers think but also helps them buy.

The Federal Government of Nigeria has taken a major step toward closing the country’s persistent electricity metering gap, securing approximately ₦700 billion from the Federation Account Allocation Committee (FAAC) to fund the deployment of 1.1 million prepaid meters nationwide by December 2025. The initiative, announced by the Minister of Power, Adebayo Adelabu, at the 2025 Nigerian Energy Forum (NEF) held in Lagos, underscores the administration’s renewed commitment to improving transparency, revenue assurance, and service delivery within the electricity sector.

Speaking at the forum themed “Powering Nigeria through Investment, Innovation, and Partnership,” Adelabu explained that the ₦700 billion fund forms part of the Presidential Metering Initiative (PMI) — a comprehensive national program designed to eliminate estimated billing and ensure accurate energy accounting across all electricity distribution companies (DisCos). According to him, this latest funding complements the ongoing World Bank-supported Distribution Sector Recovery Programme (DISREP), which targets the procurement and installation of 3.2 million meters. Combined, both programs are expected to significantly reduce Nigeria’s metering gap within the next five years.

Leveraging Global Partnerships and Development Financing

Minister Adelabu emphasized that the Federal Government is adopting a blended financing model that leverages both domestic and international resources. Beyond the FAAC allocation, the government has attracted more than $2 billion in development finance over the past two years from strategic initiatives such as the World Bank’s DARES project, the Nigeria Sovereign Investment Authority’s (NSIA) RIPLE program, and support from the Japan International Cooperation Agency (JICA). These partnerships are accelerating the expansion of electricity access — particularly in underserved communities, schools, hospitals, and public institutions — while also promoting renewable energy adoption.

He further disclosed that agreements finalized at the 2025 Nigerian Renewable Energy Innovation Forum are set to add nearly 4 gigawatts of solar manufacturing capacity annually, representing about 80% of Nigeria’s current grid generation capacity. “With this level of renewable production, Nigeria is firmly on track to meet its domestic energy transition targets and strengthen its role in regional power markets,” Adelabu noted.

Strengthening Policy and Market Reforms

Adelabu highlighted that the Electricity Act 2023 has revolutionized the Nigerian power landscape by enabling states to establish subnational electricity markets. So far, fifteen states have obtained regulatory autonomy, with one already fully operational. “We are ensuring better coordination between wholesale and retail electricity markets to drive efficiency and fairness,” the minister explained.

The minister also noted that tariff reforms implemented over the past two years have yielded positive outcomes — improving supply reliability, reducing industrial power costs, and boosting sectoral revenues from ₦1 trillion in 2023 to ₦1.7 trillion in 2024, with projections to exceed ₦2 trillion in 2025. To further stabilize the sector, President Bola Tinubu has approved a ₦4 trillion bond issuance to offset verified debts owed to generation companies (GenCos) and gas suppliers. The bond is complemented by a targeted subsidy mechanism aimed at protecting vulnerable consumers while ensuring that utilities remain financially viable.

Accelerating Meter Deployment and Reducing Billing Inefficiencies

In a related development, the Nigerian Electricity Regulatory Commission (NERC) recently approved the disbursement of ₦28 billion to DisCos under the Meter Acquisition Fund (MAF) Tranche B scheme. This initiative aims to accelerate the rollout of prepaid meters to unmetered customers at no upfront cost while providing DisCos with a sustainable revenue recovery framework.

According to NERC’s 2025 Second Quarter Report, DisCos installed 225,631 meters during Q2 2025 — a 20.55% increase compared to the 187,161 meters installed in Q1. Of these, 147,823 units were deployed under the Meter Asset Provider (MAP) scheme, 65,315 under the MAF, 12,259 through the Vendor Financed model, and 234 under the DisCo Financed framework. Despite this progress, only 6.42 million of the 11.82 million active customers within the Nigerian Electricity Supply Industry (NESI) have been metered, translating to a 54.33% metering rate.

The Road Ahead

Adelabu reaffirmed the government’s commitment to fostering a robust partnership with the private sector to unlock stranded generation capacity, modernize infrastructure, and deliver sustainable power solutions. “Through sustained investment, innovation, and collaboration, Nigeria can build a more resilient, transparent, and inclusive electricity sector,” he said.

If executed as planned, the ₦700 billion meter deployment initiative could mark a turning point in Nigeria’s electricity reform journey — reducing losses, improving customer trust, and laying the groundwork for a smarter, more efficient power ecosystem by the end of 2025.

Nestlé Nigeria Plc has staged a remarkable turnaround in its financial performance for the third quarter (Q3) of 2025, reporting a pre-tax profit of N39.6 billion, a major recovery from the N2.9 billion loss recorded in the same period of 2024. The impressive result marks a significant milestone in the company’s efforts to regain profitability following a challenging prior year marked by foreign exchange losses and high input costs.

For the nine months ended September 2025, the multinational food and beverage company recorded a pre-tax profit of N127.96 billion, in contrast to a loss of N255.38 billion during the same period in 2024, according to its unaudited financial statements. This performance was driven by a combination of strong revenue growth, improved cost efficiency, and reduced finance costs, signaling a robust recovery across its operations.

Revenue Growth and Segment Performance

Nestlé Nigeria reported Q3 2025 revenue of N303.4 billion, up 17.5% year-on-year from N258.3 billion in Q3 2024. The company’s growth was underpinned by consistent demand in both its Food and Beverage segments. Flagship products such as Maggi, Golden Morn, Cerelac, Milo, Nescafé, and Nestlé Pure Life continued to drive sales, supported by strong brand loyalty and effective marketing strategies.

For the nine-month period (January to September 2025), revenue rose 32.9% to N884.5 billion, compared to N665.3 billion in the corresponding period of 2024. This strong top-line performance highlights Nestlé’s ability to sustain consumer engagement and adapt to evolving market conditions, even amid economic headwinds such as inflation and currency volatility.

Key Financial Highlights (Q3 2025 vs Q3 2024)

• Revenue: N303.42 billion (+17.5%)

• Gross Profit: N101.92 billion (+29%)

• Operating Profit: N50.90 billion (+6.6%)

• Net Finance Cost: N11.34 billion (-77.6%)

• Pre-Tax Profit: N39.56 billion (vs N2.86 billion loss)

• Post-Tax Profit: N21.91 billion (vs N7.36 billion loss)

• Earnings Per Share (EPS): N27.64 (vs -N9.28)

• Total Assets: N847.30 billion (-1.3%)

• Total Equity: -N19.70 billion (vs -N92.29 billion)

Operational Efficiency and Margin Expansion

Nestlé’s profitability was bolstered by effective pricing strategies, resilient consumer demand, and improved cost absorption. The company’s gross profit rose 29% year-on-year to N101.92 billion, outpacing revenue growth. This resulted in an expansion of gross margin to 33.6%, up from 30.6% a year earlier, reflecting disciplined cost management, operational efficiency, and a favorable product mix.

However, increased operating costs, especially in marketing, distribution, and administrative functions, placed some pressure on overall profitability. The company noted higher logistics costs and elevated promotional spending, partly due to inflation and exchange rate fluctuations. Consequently, operating profit grew 6.6% to N50.90 billion, while the operating margin slipped to 16.8%, compared to 18.5% in Q3 2024.

Despite these cost pressures, Nestlé’s ability to maintain volume growth while implementing price adjustments demonstrates the underlying strength of its brand portfolio and distribution network.

Reduced Finance Costs and Improved Bottom Line

One of the most significant contributors to the company’s turnaround was the sharp reduction in finance costs, which fell 77.6% year-on-year to N11.34 billion, from N50.62 billion in Q3 2024. This decline was driven by:

• Lower exposure to foreign exchange-denominated loans,

• Reduced exchange rate losses on foreign payables, and

• Strategic repayment of high-interest borrowings.

These improvements in financial management significantly bolstered Nestlé’s bottom line, allowing it to convert higher operating earnings into strong net profitability.

Balance Sheet Strengthening and Equity Recovery

Nestlé Nigeria’s balance sheet showed signs of stabilization and gradual recovery. Total assets stood at N847.30 billion, marginally lower than N858.70 billion as of December 2024, reflecting prudent working capital management and advance payments to suppliers.

Total liabilities declined by 8.8% to N867.00 billion, mainly due to a 20.3% (N132.7 billion) reduction in interest-bearing loans and borrowings. This demonstrates management’s ongoing commitment to debt reduction and balance sheet restructuring.

Although the company’s equity position remains negative, it improved substantially to -N19.70 billion, from -N92.29 billion at the beginning of the year. This significant improvement underscores the impact of restored profitability and positive retained earnings on shareholder value.

Outlook and Conclusion

Nestlé Nigeria’s Q3 2025 performance reflects a strong operational and financial recovery following a challenging 2024. The company’s ability to grow revenue, expand gross margins, and significantly reduce finance costs positions it for continued profitability in the coming quarters.

However, management remains cautious about margin pressures stemming from inflation, logistics costs, and foreign exchange instability. The focus will remain on cost optimization, brand investment, and strengthening supply chain resilience to sustain momentum.

Nestlé Nigeria’s Q3 2025 results demonstrate a company in recovery mode — rebuilding profitability, enhancing liquidity, and improving balance sheet health. With a clear strategic direction and a resilient product portfolio, the company is well-positioned to deliver stronger full-year performance and reinforce its leadership in Nigeria’s fast-moving consumer goods (FMCG) sector.

The Federal Inland Revenue Service (FIRS) has announced a new directive requiring banks, stockbrokers, and other financial institutions in Nigeria to begin deducting a 10% withholding tax (WHT) on interest earned from short-term investment instruments. This policy marks a notable departure from previous exemptions that had encouraged investors to participate in Nigeria’s short-term securities market.

According to the circular issued by the FIRS, the new rule applies to all interest payments made on treasury bills, corporate bonds, promissory notes, and bills of exchange. The tax will be deducted at the point of payment, meaning investors will receive their returns net of the withholding tax.

This change signals a broader effort by the Nigerian government to expand its tax base and strengthen non-oil revenue streams amid ongoing fiscal challenges. For years, short-term securities had been exempted from such taxes to attract both local and foreign investors. However, the new directive aims to increase government revenue while standardizing tax treatment across financial instruments.

Scope of Application and Exemptions

While the circular applies to a broad range of short-term investment instruments, the FIRS clarified that interest earned on Federal Government bonds remains exempt from the new levy. This means that investors holding federal government bonds will not face any deductions, maintaining their tax-free status in accordance with existing fiscal policy.

The directive also notes that investors will receive tax credits for amounts withheld at the source. These credits can be applied to offset future tax liabilities, except in cases where the withholding is considered a final tax. This provision ensures that investors are not taxed twice on the same income.

Market analysts have noted that this development could influence investment patterns in the fixed-income market. Historically, short-term securities have been favored by investors seeking quick returns and lower risk exposure. The introduction of a 10% withholding tax may alter that dynamic by slightly reducing net yields, potentially shifting investor appetite toward tax-exempt or longer-term instruments.

Compliance and Enforcement Measures

FIRS Executive Chairman Zacch Adedeji emphasized the importance of strict compliance with the directive. In his statement, he said:

“All relevant interest-payers are required to comply with this circular to avoid penalties and interest as stipulated in the tax law.”

Adedeji further reiterated that any failure to deduct or remit the withholding tax as required would attract penalties under existing tax legislation. Though the agency did not provide specific projections on expected revenue gains from the new measure, tax experts suggest that it could significantly boost government collections, especially given the popularity of short-term securities among institutional and retail investors.

The circular is addressed to banks, discount houses, stockbrokers, corporate bond issuers, primary dealer market makers (PDMMs), financial institutions, government agencies, and tax practitioners, as well as the general public.

Understanding Withholding Tax

Withholding tax is a prepayment of income tax, deducted at source from specific payments made to individuals or corporations. According to FIRS guidelines, the payer of the income—such as a bank or investment house—is responsible for remitting the deducted amount directly to the tax authority.

The standard withholding tax rates currently applicable in Nigeria include:

• Rents on properties: 10%

• Dividends or profits from companies: 10%

• Interest on bank deposits or securities: 10%

• Royalties: 5%

By extending this tax to short-term investment interest, FIRS aims to ensure a more uniform tax regime across all categories of income.

Legal Basis for the Directive

The circular draws its authority from Sections 78(1) and 81(1) of the Companies Income Tax Act (CITA), as amended, as well as the 2024 Withholding Tax Regulations. These laws empower the FIRS to require deduction of tax at source for payments such as interest, dividends, and royalties.

The agency emphasized that the tax must be deducted at the time of payment, not afterward, ensuring immediate remittance to government coffers. This measure enhances transparency and compliance while reducing tax evasion risks.

Furthermore, the FIRS reaffirmed that individuals and entities from whom taxes are withheld are entitled to tax credits equivalent to the amounts remitted. These credits can be used to offset subsequent tax obligations, except where the tax is treated as final. This ensures fairness, accountability, and consistency in the taxation process.

Market and Economic Implications

Financial experts believe the policy could slightly dampen short-term market activity as investors reassess their yield expectations. However, it also underscores the government’s determination to broaden its tax net and reduce reliance on volatile oil revenues.

While some investors may view the move as a disincentive, others see it as part of Nigeria’s gradual shift toward a more structured and transparent tax environment. The long-term impact will likely depend on how efficiently the policy is implemented and how the FIRS manages compliance across financial institutions.

In summary, the introduction of a 10% withholding tax on short-term investment interest marks a new chapter in Nigeria’s tax administration. It reflects the government’s commitment to fiscal sustainability while promoting accountability in the financial system.

Chemical and Allied Products Plc (CAP Plc), one of Nigeria’s leading paint manufacturers, has reported a strong financial performance for the third quarter (Q3) of 2025, highlighting steady growth across key performance indicators. The company posted a profit before tax (PBT) of N1.71 billion, representing a 36% increase compared to N1.26 billion recorded in the same period of 2024.

The improved earnings performance was largely driven by robust paint sales, enhanced cost management, and efficient operational strategies. CAP Plc’s consistent focus on product innovation and expanding market reach helped strengthen its revenue base despite persistent inflationary pressures and foreign exchange volatility in the business environment.

For the nine months ending September 2025, CAP Plc recorded a cumulative pre-tax profit of N5.4 billion, up 39% year-on-year from N3.9 billion in the corresponding period of 2024.

Key Financial Highlights (Q3 2025 vs Q3 2024)

Revenue: N10.18 billion (+26.7%)

Gross Profit: N4.34 billion (+25.5%)

Operating Profit: N1.60 billion (+32.2%)

Finance Income: N107 million (+51.7%)

Profit Before Tax: N1.71 billion (+35.5%)

Profit After Tax: N1.14 billion (+35.6%)

Earnings Per Share (EPS): 141 kobo (up from 104 kobo)

Total Assets: N20.7 billion (+5.3%)

Retained Earnings: N10.4 billion (+19.7%)

Revenue Growth Anchored by Strong Paint Sales

Revenue for the quarter grew by 26.7% year-on-year to N10.18 billion, buoyed by sustained demand across CAP Plc’s premium and mid-range paint categories. For the first nine months of 2025, total revenue reached N30.27 billion, compared to N23.65 billion in the same period of the previous year — a testament to the company’s dominant position in Nigeria’s decorative paints market.

Paint sales alone contributed a significant portion of revenue, accounting for N30.2 billion, while an additional N46.2 million came from related services. The company’s gross profit climbed 25.5% to N4.34 billion, supported by effective cost management, improved supply chain efficiency, and better raw material sourcing strategies that mitigated input cost pressures.

Resilient Profitability Despite Rising Costs

Despite ongoing cost challenges, including rising inflation and increased production expenses, CAP Plc demonstrated strong operational efficiency. The cost of sales rose 27.5% to N5.8 billion, up from N4.5 billion in Q3 2024, primarily due to higher raw material prices and logistics costs.

Administrative expenses also climbed 16.3% to N1.75 billion, reflecting increases in personnel costs and overhead expenses. Meanwhile, selling and marketing expenses surged 31.8% to N1.07 billion, underscoring the company’s continued investment in brand visibility, promotional activities, and customer engagement.

Despite these headwinds, CAP Plc achieved an operating profit of N1.60 billion, representing a 32.2% year-on-year increase. The company successfully translated top-line growth into improved bottom-line performance, highlighting management’s effectiveness in balancing expansion with cost control.

Profit before tax rose 35.5% to N1.71 billion, while profit after tax increased 35.6% to N1.14 billion, driven by higher operating income and reduced finance costs. Earnings per share advanced to 141 kobo, up from 104 kobo a year earlier, reflecting enhanced shareholder value creation.

Strengthened Balance Sheet and Liquidity Position

CAP Plc’s balance sheet remained solid through the third quarter, with strong liquidity and reduced liabilities. Cash and cash equivalents improved by 9.8% to N7.70 billion, demonstrating the company’s healthy cash flow generation.

Total assets grew 5.3% year-to-date to N20.73 billion, while total liabilities declined from N9.04 billion to N8.37 billion, reflecting prudent debt management and efficient capital allocation. Shareholders’ equity increased to N12.36 billion, compared to N10.64 billion in the previous year, signifying improved retained earnings and reinvestment in core operations.

Outlook

CAP Plc remains optimistic about sustaining growth momentum through the remainder of 2025. The company plans to continue leveraging its brand strength, nationwide distribution network, and innovation-driven product portfolio to deepen market penetration and enhance customer loyalty.

While macroeconomic challenges — such as inflation, exchange rate volatility, and high input costs — remain, CAP Plc’s disciplined operational execution, strategic cost optimization, and commitment to product excellence position it well for continued profitability in the Nigerian paints and coatings industry.

With a clear focus on efficiency and growth, the company’s third-quarter results reaffirm CAP Plc’s status as a resilient player in Nigeria’s manufacturing sector and a consistent value creator for its shareholders.