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Euro sags after inflation data, EM steady after rout

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LONDON – The euro fell and the bloc’s government bonds rallied on Friday as weaker-than-expected inflation data increased pressure on the European Central Bank to either cut rates or employ other easing tools at its meeting next week.

Eurostat’s first reading of January inflation showed it slowed back down to 0.7 percent, the level that saw the ECB catch markets off guard with a rate cut in November.

The banks sees 2 percent inflation as optimal for the region’s economy and with little chance of being anywhere near that level anytime soon, calls have been intensifying on it to take more aggressive action.

“It’s now more likely than ever that Draghi is going to have to step in with some extraordinary measure to stave off deflation,” said Aberdeen Asset Management fixed income investment analyst Luke Bartholomew.

Euro sags after inflation data, EM steady after rout“The big challenge is exactly what to do. With the store cupboard of conventional measures largely bare, any policy action is likely to be unprecedented.”

While more forward-looking data has painted a brighter picture for the euro zone and its debt strained periphery members, unemployment figures, which came alongside the inflation reading, remained at a record high.

Whatever form it takes, the prospect of more ECB easing sent the euro lower against its major currency peers and pushed down the all-import money market rates which are the benchmark for borrowing costs in the bloc.

The euro was last at $1.3541 against the dollar having started the week at $1.37, while euro zone government bonds which become more attractive the lower borrowing costs go, rallied. <GVD/EUR>

Although it is more likely to wait until March when it has new in-house forecasts available, the most obvious option available to Draghi and his fellow policymakers is to take rates even closer to zero, and in the case of the deposit rate that acts as floor for money rates, into negative territory.

But they could just as easily increase the amount of cash sloshing around the system by no longer “sterlising” the 170 billion euros of Italian, Spanish and other bonds bought at the peak of the euro crisis.

“It should keep speculation on the table that the ECB may have to take further action to help fight disinflation in the months ahead and as such could prove negative for the euro,” said Josh O’Byrne, FX Strategist at Citi.

SHARED PAIN

European shares .FTEU3 saw no gain from the data as they struggled to shake off the difficulties that have spread from emerging markets this week.

Britain’s FTSE 100 .FTSE and France’s CAC 40 .FCHI extended early losses to 0.7 and 0.9 percent respectively, while Germany’s DAX .GDAXI was nursing the biggest falls, dropping 1.3 percent as weaker than expected retail sales and pressure on Deutsche Bank added extra gloom.

European banking authorities sketched out some of the details of their upcoming stress tests, saying big banks would have to ensure they still had 5.5 percent in spare capital if another financial meltdown took place.

Lunar new year celebrations meant a number of bourses in Asia had been shut, but those that were still open remained weak as fears about the impact of the Federal Reserve’s stimulus withdrawal on emerging markets offset the reassurance of Thursday’s upbeat U.S. growth data.

Japan’s Nikkei stock average .N225 reversed sharply and ended down 0.6 percent as a resurgent yen, combined with data dousing hopes of more stimulus from the BOJ, left the index with its third worst January in 50 years.

For world stocks on MSCI’s 45-country, all-world index .MIWD00000PUS not only was it the end of their first down month in five, it was also their biggest monthly drop in almost two years.

“I think the BOJ is unlikely to adopt additional easing because there is no reason to justify it, given the positive macro-economic environment,” said Junko Nishioka, chief economist at RBS Securities.

EMERGING TENSIONS

In the currency market, the dollar .DXY gained the upper hand after the soft euro zone inflation reading while the yen hit a two-month high on the euro. The Turkish lira was also steadier after its torrid week at 2.2570 to the dollar.

Political issues in countries such as Turkey, South Africa and Argentina have amplified worries about economic imbalances, hammering their currencies and wiping over a trillion dollars off the value of world stocks this week.

Central banks in Turkey, South Africa and India have all reacted by hiking interest rates while Russia’s central bank has pledged unlimited foreign exchange interventions to keep the rouble in check.

On the commodities front, spot gold was nearly flat at $1,245.00 an ounce, but a 2-percent overnight fall following the strong U.S. GDP data was set to end a five-week rally.

Brent oil and U.S. crude hovered at $107.90 and $97.80 a barrel respectively while growth-attuned metal copper drifted toward a 4 percent monthly fall.

“The absence of the Chinese market for the next week means that we may see some further downside on commodities, especially if we do see the dollar gaining ground,” said Tim Radford, of Sydney-based metals adviser Rivkin.

– REUTERS

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Gas Infrastructure Fund Sets Terms for Indigenous Access to Funding

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Gas development, a major carbon reduction move - Seplat Energy

Midstream and Downstream Gas Infrastructure Fund (MDGIF) has said that indigenous companies seeking to partner with it and access its equity must show secured gas supply and a confirmed buyer, because no gas project is bankable without both.

The Fund was established under the Petroleum Industry Act (PIA), and designed as the “master key” for unlocking gas processing, infrastructure and bankability.

Deputy Director at MDGIF in the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), Engr Elvis Duruji made this known at the OTL Africa Downstream Energy Week in Lagos. He spoke at a session on: “Scaling Energy Options: Unlocking Gas and Renewables through Processing and Infrastructure.”

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Expatiating further, Duruji said the two conditions decide whether the fund takes an equity stake in a project, since they determine its returns and viability, insisting that the security of the gas feedstock is very important. He further noted that project operators must locate their sites at a gas processing plant or close to a CNG mother station.

The Fund, he added, has used N671 billion to catalyse N1.6 trillion from private Nigerians.

“The Fund has partnered on 31 projects covering 205 infrastructure assets at different stages of execution. Of these, 127 are at different levels of project management, and 10 have been commissioned.

Duruji cited Topline Limited’s mini-LNG plant in Delta State as a success story. “For three years, a Nigerian company, Topline, was looking for a credit facility from InfraCredit, and no one was able to loan them money because they are Nigerian,” he said. “They came to the fund and we partnered with them.”

He said Topline is now the first indigenous mini-LNG operator in Nigeria, with commissioning due before December.

He also cited a programme to convert 20 university campuses to CNG through daughter stations.

“Three CNG stations are operational and 14 more are to be commissioned before December. Duruji added that the fund is working with fuel-station partners, including Ibile Oil and Gas Corporation, which is delivering 15 CNG stations across Lagos.

“These are our success stories,” he said.

He said, for CNG projects, proximity to the gas processing plant “is very important. You must have security of gas supply. We also ensure that you have a gas supply agreement with producers. What is the volume and price that the producer is willing to give to our would-be equity partner? This always affects their credit returns and internal rate of return. This is what will determine the project viability, and this is key,” he said.

Duruji also noted that offtake is equally critical adding that. “We need to know the offtakers and the regasification facility. The same thing for CNG, you need to get a compressor,” he said.

According to him, the MDGIF intervenes in gas projects where commercial lenders will not, because “most Nigerian companies are in trading and operating marginally at the downstream level because the sector is highly capital intensive,” adding that no Nigerian bank would give single-digit loans for exploration and production.

“Nigerian Banks lends at as much as 30 per cent interest, whereas, foreign firms coming into Nigeria to explore, by contrast, have access to cheap loans in single digits from their home country financial institutions,” he said.

The MDGIF, he further explained, intervenes “by pricing the risk, coming up with mitigation and catalytic equity, which we now use to bring that barrier to a level to allow Nigerians who are interested to come into the midstream to partner through the equity finance that we will provide without interest.”

“We bring in the catalytic equity, which is about 49 percent, because we want to allow you to be the operator. We will stay with the private investor and walk them through all that,” he added.

He said MDGIF brings “minority equity, due diligence and risk governance” and uses these as catalytic capital “to make the projects bankable, to make them balanced capital structure that will attract private confidence.”

He identified processing plants, transport, storage and last-mile distribution as the main gaps. Non-associated gas, he said, is “very expertise and capital intensive,” and pipeline networks are needed to move gas from the reserve to the last mile.

“The more gas infrastructure we roll out, the more we are helping the energy system where renewables cannot,” he said.

Duruji identified three mandates of the MDGIF: to increase domestic gas consumption, to aggregate flared gas and bring it into the domestic market, and to mobilise private investors who lack the funds to play in the midstream.

“The MDGIF has three mandates: increase domestic gas consumption, aggregate flared gas and bring it into the domestic market, that is key,” he said. “The other mandate is to mobilise private investors that do not have the funds to be able to play in the midstream, bring their funds.”

He added: “We also have the mandate to reduce gas flare in Nigeria exploration and production sites.”

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UN Engages NCDMB to Deepen Female Access to $40m Oil, Gas Fund

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NCDMB Emerges Best MDA In Ease Of Doing Business Ranking

Easing access to the dedicated $40 million Women in Oil and Gas Fund is the focus of ongoing strategic conversation between the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), and the Nigerian Content Development and Monitoring Board (NCDMB).

Biztellers reports that the two bodies are keen to collaborate to ensure that more women-owned businesses and professionals benefit from industry’s opportunities and consequently play a stronger role across the sector’s value chain.

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Recall that in April 2021, the NCDMB established a $20 million fund dedicated to supporting women-owned and women-led businesses in the oil and gas sector, which the Nigerian Export-Import Bank (NEXIM) complemented by matching the fund with an additional $20 million.

However, despite this significant commitment and favorable loan terms, the uptake of the scheme has remained below expectations to date.

The discussions were advanced last week when the UN Women’s Country Representative to Nigeria and the Economic Community of West African States (ECOWAS), Ms. Beatrice Eyong, led a delegation to the NCDMB’s Abuja liaison office.

The team was received by the Board’s General Manager of Corporate Communications, Dr. Obinna Ezeobi, on behalf of the Executive Secretary, Engr. Felix Omatsola Ogbe.

The meeting explored proposed capacity-building initiatives for NCDMB personnel, aimed at mainstreaming gender perspectives into the Board’s project planning, budgeting, and execution frameworks.

Other key areas of discussion included vendor development schemes to better position women-led oil and gas businesses for industry opportunities, strategies to raise awareness of available financing options, and potential affirmative procurement measures designed to expand the participation of women-owned companies across the oil and gas value chain.

The UN official commended NCDMB for its ongoing gender inclusion efforts, noting that the Board is already implementing several measures consistent with its mandate.

She proposed conducting a study to identify the reasons women face challenges in accessing the financing facility, including potential barriers related to documentation, business registration, tax compliance, and limited awareness.

She further highlighted key initiatives currently being undertaken by the UN Office, such as programmes on women’s economic empowerment, leadership development, and the elimination of gender-based violence, among others.

Ezeobi welcomed the proposals and affirmed the Board’s readiness to partner with UN Women. He highlighted several innovative initiatives already implemented by the Board to create opportunities for women to participate, grow, and lead in Nigeria’s oil and gas industry.

These include the establishment of a dedicated funding scheme with NEXIM Bank that enables women-owned or women-led firms to access financing at a highly competitive 5 per cent interest rate, as well as the creation of a Diversity Sectoral Working Group within the Nigerian Content Consultative Forum (NCCF), designed to mainstream women’s issues into local content policy and decision-making processes.

The Board also supports associations of women who work across the Energy Industry value chain, where they network, build confidence and links to progress their careers or businesses.

Ezeobi noted that NCDMB has also invested significantly in capacity-building programs for women entrepreneurs and business leaders, covering critical areas such as business sustainability, corporate governance, and strategic management.

The Board has further supported women’s participation in technical occupations while encouraging young girls to pursue careers in science, technology, engineering, and mathematics (STEM).

He acknowledged that women remain underrepresented in the oil and gas industry, citing limited access to technical education, finance, and commercial opportunities, as well as entrenched perceptions of the sector as predominantly male.

Ezeobi reiterated NCDMB’s willingness to collaborate with UN Women to address these challenges and recommended strategies to accelerate the Board’s support for UN Women’s programmes, thereby advancing gender inclusion across the industry.

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Afreximbank Charts Côte d’Ivoire’s Rise as a Regional Growth Leader in WA

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The African Export-Import Bank (Afreximbank) has released its Côte d’Ivoire Country Brief, providing an in-depth examination of the West African nation’s macroeconomic outlook, regional and international trade dynamics, financial sector development and debt sustainability profile.

The brief highlights Côte d’Ivoire as one of Africa’s fastest-growing economies. Home to 33.5 million people and with a nominal GDP forecast at USD116.9 billion in 2027, the country has sustained average real GDP growth of around 6.5% per year between 2021 and 2024, accelerating to an estimated 6.6% in 2025. Growth is forecast to moderate to 5.8% in 2026 before rebounding to 6.2% in 2027, supported by rising crude production, continued infrastructure investment and resilient domestic demand.

The brief also points to a notably improved near-term macroeconomic environment. Inflation fell sharply to just 0.1% in 2025, supported by easing commodity price pressures and government measures to stabilise fuel and food prices, with the CFA franc’s euro peg providing a durable exchange rate anchor. The fiscal deficit narrowed to 3% of GDP in 2025, meeting the West African Economic and Monetary Union (UEMOA) ceiling, backed by stronger revenue collection and ongoing reforms to tax administration and VAT digitalisation.

On trade, this edition charts a significant expansion. Total trade surged from USD26 billion in 2018 to USD57 billion in 2025, anchored by Côte d’Ivoire’s status as the world’s largest cocoa producer, commanding around 40% of global supply, alongside growing exports of cashew nuts, rubber, gold and hydrocarbons.

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The February 2026 Calao South gas condensate discovery and rising output from the Baleine field signaled a broadening export base over the medium term. Strategically positioned on the Gulf of Guinea, with the ports of Abidjan and San Pedro acting as principal gateways into Francophone West Africa, Côte d’Ivoire is deeply embedded in regional trade networks, with African markets accounting for around 22% of its goods trade in 2025.

The brief further notes Côte d’Ivoire’s financial sector strength. The country holds the largest banking sector in UEMOA, accounting for more than a third of regional banking assets. Regulatory reforms, including the adoption of Basel II and Basel III standards, have strengthened supervision and resilience, while the launch of the Central Bank of West African States’ (BCEAO) interoperable instant payment platform in September 2025 is broadening access to digital financial services across the economy.

As this edition notes, Côte d’Ivoire “has moved from a period of rapid debt accumulation and elevated debt service pressure towards a more stable debt profile, supported by fiscal consolidation, active debt management and continued multilateral engagement.” This is a trajectory that positions the country to fully capitalise on the ambitious targets of its 2026-2030 National Development Plan.

Afreximbank’s Group Chief Economist & Managing Director Research commented: “Côte d’Ivoire is consolidating its position as a leading West African growth and trade hub. Its expanding energy sector, world-class agricultural base, regional port infrastructure and increasingly sophisticated financial system offer a strong foundation to attract investment, scale value addition and deepen trade links across Africa.”

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