🍞 We got a "B" ツ

Hello!!

Hope you had a good weekend! It’s Demilade here. I’m prepping to go to Warsaw for the first time this week; cue the pierogis 🥟!! Poland is one of the fastest-growing economies in Europe. Growing from $477.5 billion in GDP in 2015 to over $1 trillion today. At the same time, Nigeria has gone from $492 billion in GDP to $377 billion today in nominal terms. Are we backsliding 🙆

In reality, GDP comparisons aren’t apples to apples on a PPP basis, i.e. taking account for prices in each country; Nigeria’s GDP is $2.4 trillion compared to $2.1 trillion for Poland. However, when you take into account our population, we are still one of the poorest countries in the world. But that’s a story for another day.

Poland has grown primarily by investing heavily in their manufacturing and technology sector and labour cost arbitrage for most of the last 10 years. These are things Nigeria can learn from as we transform our economy to a modern one.

What actually changes

The agency cited the usual reform inventory: FX market liberalisation, fuel subsidy removal, higher oil production, and increased domestic refining capacity. Executive Order 9, signed in February 2026, was also named, with S&P pointing to its role in forcing NNPC to remit a larger share of petroleum revenues directly into the Federation Account. Dangote Refinery, now running at around 650,000 barrels per day, is doing the heavy lifting on the external side.

Here are some numbers behind their decision. Federal government revenue projected to rise to 12.4% of GDP in 2026 from 7.3% in 2023, current account surplus (AKA exports - imports) forecast at 5.8% of GDP, up from 4.8% in 2025, reserves at roughly $50 billion against $33 billion in 2023, and inflation reducing form 23% in 2025 to about 15.9% as of April in 2026 with sub-10% targeted by 2028.

All this is great news for the country as a whole. It means the currency should remain stable, and the government can afford to pay down more debt. But inflation is still a major problem for the economy.

Speaking of more borrowing…Nigerians are way too funny. 😅

The caveats

Nigeria remains five notches below “investment grade”. S&P flagged inflation, poverty, unemployment, security concerns, and rising fuel prices linked to the Middle East conflict as persistent risks heading into the 2027 elections. And in a small irony, Tinubu has repeatedly called for the establishment of an African rating agency, bemoaning how countries on the continent are rated by foreign firms. The foreign firms then promptly upgraded him.

Investment Portfolio angle: This is the third independent endorsement of the reform package in twelve months, from agencies famously unsentimental about emerging market sovereigns. For investors watching Nigerian Eurobonds, the risk premium has been narrowing all year.

⚖️ Dangote is back in court: In a rare break from his world tour, Reuters reported that the refinery filed a fresh suit at the Federal High Court in Lagos on May 15, asking the court to nullify the round of fuel import licences issued on or about 6 May 2026 by the NMDPRA. The licences went to six major marketers, including NIPCO, AA Rano, Matrix Energy, Shafa Energy, Pinnacle Oil and Gas, and Bono Energy. The argument: under the Petroleum Industry Act, fuel imports are only legal when domestic supply is insufficient, and Dangote argues it clearly is not. This is the same fight he quietly walked away from in July 2025, when he dropped an earlier suit seeking N100 billion in damages without giving a reason. It also lands the same week he publicly called the importers a "mafia" on the Tangen podcast. The IPO roadshow now has a courtroom subplot. ghen ghen 🍿📺

🔎 Where the banks are actually lending: A BusinessDay analysis of CBN private sector credit data shows total bank lending rose to N730.2 trillion (over $500 billion)in 2025 from N267.1 trillion in 2021, a 173% increase, but the concentration tells the more interesting story. The biggest exposures remain oil and gas, financial institutions, manufacturing, trade, and government, while real estate, mining, and education barely register. Real estate credit was around 1.4% of total lending in 2025. Fitch is projecting sector loan growth above 20% in 2026 after slowing to about 5% in 2025, supported by the N4.65 trillion banks raised over 24 months to clear the new capital requirements. The capacity is there. The real test is whether the deployment finally gets braver, or whether the new firepower just keeps flowing to the same five sectors.

🌍 Africa goes shopping for capital outside dollar: The era of cheap dollar borrowing is over and African sovereigns are getting creative. Citigroup notes that countries across the continent are exploring alternative funding routes, including yuan financing🧧 in Egypt, Samurai bonds ⚔ in Kenya, and UAE-tied fundraising arrangements in Nigeria. France is also leaning back in. At the France-Africa Summit in Nairobi, in addition to disrespecting the crowd, Macron extracted €23 billion in pledges, €14 billion from French firms and €9 billion from African investors and entrepreneurs. Zimbabwe's Mutapa Investment Fund is meanwhile hunting $250 million from local lenders to expand its gold mining operations. The common thread is that dollar funding costs are too punishing, so capital strategy is fragmenting across yen, yuan, dirham, euro, and domestic balance sheets. This is structural, not cyclical.

The FT's 2026 ranking of Africa's fastest-growing companies dropped last week, and Nigeria's headline number isn’t encouraging. 16 companies, down from 28 last year, overtaken by Kenya (17) for the first time and dwarfed by South Africa (51)... but this is not a competition! Right? The methodology converts revenues to dollars at year-end FX, which crushed naira-only operators. But the Nigerian names that survived tell an interesting story.

Sabi (#2): Sabi's revenue went from $1.52 million in 2021 to $46.5 million in 2024, a CAGR of 212.56%, making it Nigeria's top-ranked company and second-fastest-growing in Africa behind Egypt's Thndr. Sabi was founded in 2020 as a B2B platform for informal merchants. By mid-2023, it had over 300,000 merchants and $1 billion in annualised GMV, but margins were thin. In June 2025 it laid off roughly 20% of its workforce and refocused on TRACE, a mineral traceability platform now operating across Nigeria, DRC, Tanzania, and Zambia. It processes more than 20,000 tons of minerals monthly and is targeting 5% of US imports in select mineral categories. The corner-shops-to-critical-minerals pivot is the most strategically interesting Nigerian startup move of the cycle.

McNichols (#18 ): McNichols Consolidated is an NGX-listed FMCG producer of custard, pancake mix, and chocolate-flavoured milk products, founded in 2005. Per the FT rankings, revenue rose from $1.91 million in 2021 to $3.77 million in 2024, a CAGR of 95.75%. The most interesting detail in the data: it shrank its workforce from 72 employees in 2021 to 42 in 2024 while almost doubling revenue. That is operating leverage in its purest form. It also explains why the stock posted a 147.09% year-to-date gain on the NGX by late March 2026.

i-Fitness (#30): Founded in 2015 by Foluso Ogunwale, i-Fitness opened its 30th branch in Abuja's Games Village this month, with over 400,000 cumulative members and annual membership growth averaging 25%. It is backed by one of Nigeria’s leading private equity firms Verod Capital. Nigeria's formal fitness participation rate sits in the low single digits versus 15 to 25% in mature markets like the US and parts of Europe, which is the size of the runway. Expansion throughout West Africa is the next phase

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