A renewed wave of global economic uncertainty is dimming the lights on Nigeria’s reform-driven optimism, as U.S. investment bank J.P. Morgan pulls the brakes on its bullish stance over the country’s debt instruments.

In a sharp departure from its earlier position, the bank has told investors to exit long positions in Nigerian Open Market Operation (OMO) bills, citing deepening macroeconomic vulnerabilities linked to declining oil prices and an increasingly unstable global economy.

The April 9 research note, titled “Frontier Local Markets Strategy: Reducing risk further,” is the strongest signal yet that foreign appetite for Nigerian debt may be drying up. J.P. Morgan had previously recommended Nigerian treasury bills as a high-yield opportunity, particularly after the Central Bank of Nigeria (CBN) initiated market reforms last year to unify exchange rates and end costly fuel subsidies. But now, with Brent crude heading below $60 per barrel, dangerously close to Nigeria’s budgetary break-even point, the bank is sounding the alarm.

“We’re advising clients to close their positions in Nigerian T-bills,” the report stated, warning that oil below $60 could sink Nigeria’s current account back into deficit and pile pressure on the naira.

The shift in tone comes amid a swirl of global uncertainties. J.P. Morgan pointed to the global tariffs by the U.S. President Donald Trump. The bank says Trump’s stance on sweeping global tariffs could reignite trade wars that hurt emerging markets like Nigeria, where export earnings remain precariously tied to crude oil.

This geopolitical backdrop, coupled with the reality of falling oil prices, now threatens to upend Nigeria’s fragile economic recovery.

CBN’s optimism meets investor caution

Just days before J.P. Morgan’s note, Nigeria’s central bank had offered a more hopeful picture. It reported a $6.83 billion balance of payment surplus in 2024 and said external reserves, which hovered around $23 billion, were expected to climb due to improved oil output and export diversification.

“We anticipate a steady uptick in reserves, underpinned by improved oil production levels, and a more supporting export growth environment that is expected to boost non-oil FX earnings,” the CBN said.

But that optimism may now be colliding with crude realities. As oil prices tumble, so too do the prospects of a genuine FX buffer. J.P. Morgan warned that if oil remains under $60—a level seen as Nigeria’s fiscal red line—it could trigger renewed dollar demand, spark portfolio outflows, and lead to a current account deficit.

The bank even floated a worst-case scenario: if the tide of oil-linked FX dries up, the naira could weaken past the 1,700/$1 mark. It currently trades over 1,500, but analysts say that’s largely propped up by central bank intervention.

To defend the naira, the CBN has stepped up its interventions. According to J.P. Morgan, the apex bank sold around $550 million into the market in March alone. That figure has since surged past $1 billion this month, based on estimates from financial analysts.

The bank says this increasing reliance on CBN support highlights a deeper vulnerability: Nigeria’s FX market remains too dependent on a single revenue stream—oil.

“Any disruption to CBN dollar inflows—primarily from oil—could create panic in both currency and bond markets,” the note warned.

J.P. Morgan estimates that potential portfolio outflows from Nigeria could hit $10 billion, although it acknowledged that a portion of this is likely locked in illiquid assets or long-term placements. Still, even a fraction of that leaving the system could rattle already-shaky investor confidence.

OMO bills under pressure, yields spike

Beyond the currency market, cracks are now showing in the domestic fixed-income space. The report notes that liquidity in Nigerian T-bills and OMO instruments has thinned significantly, as rising inflation, foreign outflows, and geopolitical shocks spook investors.

Yields on short-dated securities have surged by as much as 300 basis points in recent weeks, a signal that risk appetite is waning. With fewer buyers in the market, the CBN has had to step in—either injecting liquidity or directly participating in auctions to avoid failed bids.

The shift may seem technical, but the implications are broad. When investor demand weakens for government debt, borrowing costs rise. And when a country like Nigeria is already struggling to plug fiscal holes, this compounds the burden.

At the heart of Nigeria’s dilemma is its dependence on oil, which still accounts for more than 90 percent of FX earnings. The government had pinned its hopes on higher crude exports and economic diversification, especially with the Nigerian National Petroleum Company (NNPC) now fully commercialized. But oil’s global downturn is threatening that push.

The country’s fiscal plans are also built on the assumption of improved tax collection and revenue reforms—yet neither has materialized at the pace needed to offset oil volatility.

“The government had hoped for increased FX inflows through oil exports and multilateral support. However, with oil prices falling and no clear path to alternative revenue streams, the pressure on fiscal and external balances is likely to grow,” J.P. Morgan warned.

However, It’s Not All That Bad

Despite the caution, J.P. Morgan hasn’t written Nigeria off entirely. The bank maintains a medium-term positive outlook, suggesting that reforms like the FX unification and subsidy removal will eventually pay off. It also expects the country to continue its shift towards market-determined exchange rates and local revenue mobilization.

But it hinges all that hope on one condition: Nigeria must withstand the current wave of global headwinds without losing control of its currency or fiscal position.

In essence, Nigeria’s economic recovery remains a balancing act—one that is now swaying under the combined weight of geopolitics, oil market dynamics, and investor nerves. And with oil slipping below the red line and Trump’s sweeping tariffs echoing across markets, the outlook seems gloomy.

We continue to wish that the US and China will find how both will operate in this 21st century since they are the REAL countries while others are just voting Present. But besides the mercantilist framework of physical goods, positing that trade must deliver profitable balances, even at the flavour of protectionism, let me add the other “goods”.

Yes, when you add services and software, America wins the world and runs a huge “trade” surplus with every country on earth. Of course, those other “goods” are not cleared at the typical ports, and may not enter some dossiers of nations since they pass via IP addresses of computers, and banks’ digital wallets. In other words, from banking services to digital products which include Google ads, Apple Store, ChatGPT subscriptions, etc does any country come close to the modern “tariff” with US?

When this tariff conversation began, I asked the Nigeria’s trade czar to prepare a small table which shows two things: the physical trade goods surplus Nigeria enjoys over US (US imports crude oil and African foods from Nigeria while we rarely import much from the country) and Services/software (Nigeria has a huge trade deficit there, from Netflix to Microsoft to correspondence banking services). When those are taken together,  President Trump will see that Nigeria is running a trade deficit against the US. And can make our tariff “0%” lol.

In other words, America leads on trade when you combine the traditional and modern trades, and President Trump should include everything in his calculation. Using only the physical goods may not capture much, since those Adam Smith postulations were promulgated well before the invention and scaling of the Internet, and they need to be upgraded.

In summary: If Country A imports physical goods worth $10m  from the US,  and US imports physical goods worth $30m from Country A (usually raw materials), Country A has a trade surplus of $20m. But look deeper, on services, banking and software, Country A is importing things valued at $50m from US, when US records zero from Country A. If we include everything, you can even notice that the US is the one with a comprehensive trade surplus when you include all “ports”, beyond air, land and sea, to include “internet ports”.

Take a look at the ranking of mobile apps and their downloads, the US is top in all categories. So, Nigeria’s trade czar must update its playbook when he/she visits Washington DC to negotiate for the nation. I am confident that the US will understand this point and remove the extra 14% for us because Naira needs space to breathe!

Comment on Feed

Comment 1: Ndubuisi Ekekwe which economical and statistical tools can fairly measure total trade balance in an unbiased way for all trade partners to agree on? Maybe it is already done and should be the basis of trade negotiation

My Response: “which economical and statistical tools can fairly measure total trade balance in an unbiased way” – I will not blame the tools; the issue is the data fed into the tools. Lesotho has a GDP of $2.2b but owns banks which have corresponding banks with New York, use Microsoft software, watch Netflix, use apps stores, etc. It has a trade surplus with the US because it exports jeans but imports minimal physical goods. Check its central bank on what it pays for software, etc, you will see that it is on deficit if ALL goods are included.  The challenge is that people are still feeding tariff data using Adam Smith mercantilism and theory of physical comparative advantages which were purely built on atoms, with no bits and bytes.

Comment 2: Adam Smith’s postulations have since been improved by the Keynesians, New Keynesians, and neoclassical economists to incorporate modern-day technological progress. And ways to measure intangible services over the Internet have been designed as well, in terms of taxation and open economies. But since some of the big companies normally register their businesses in some of the countries they operate in, this changes the game. For instance, Meta in Ireland is seen as a European company by virtue of its incorporation in the EU.

My Response: I am not sure about that. All banks in Nigeria have correspondent banks in New York. Also, it is not the problem of Nigeria if Microsoft US wants to collect money via a shell in Ireland when we know that Ireland did not create Microsoft. As a Central Bank making that trade reconciliation payment, I will ask Microsoft to create your US bucket for me to pay; otherwise, we will not pay you. That you’re using Ireland as a wallet does not mean Microsoft is no more American.  If a vessel leaving Nigeria with crude refuels in Belize before arriving US, would that not still be Nigerian crude?

In a major shift that underlines the rising mainstream appeal of artificial intelligence tools, ChatGPT has overtaken Instagram and TikTok to become the most downloaded non-gaming app globally in March, according to new data from Appfigures.

The chatbot app hit 46 million new installs during the month, marking its largest monthly growth since launch and a 28% jump over February figures.

The surge in downloads pushes ChatGPT ahead of usual top contenders Instagram and TikTok, which took the No. 2 and No. 3 spots respectively. It also underscores how AI, and OpenAI in particular, is no longer just a tech buzzword but a consumer mainstay.

While the March spike coincided with upgrades to ChatGPT’s image generation tools and loosened content moderation rules, updates that helped the app go viral thanks to its Ghibli-style meme-making capabilities, Appfigures believes the growth was more about brand dominance than product changes.

“It’s starting to feel like ChatGPT is becoming a verb, a lot like how Google did in the 2000s,” said Appfigures founder and CEO Ariel Michaeli. He pointed out that even conversations around other AI chatbots like Grok or Claude ultimately drive users to ChatGPT because of its name recognition.

That association has helped solidify ChatGPT’s position in popular culture, with many casual users now referring to “ChatGPT” when they mean AI in general — a branding feat that even tech giants struggle to match.

Why This Matters

ChatGPT’s rise to the top of the app charts is about more than numbers. It suggests that OpenAI has successfully bridged the gap between experimental AI and widespread utility. This latest milestone coincides with the growing integration of AI tools across industries, including education, customer service, coding, and content creation.

The app’s massive year-over-year growth, 148% compared to Q1 2021, also puts it in a different league from other AI tools trying to break into the market. While rivals like Anthropic’s Claude have struggled with traction, and DeepSeek or Manus AI remain largely niche, ChatGPT’s dominance shows no signs of slowing.

Even Elon Musk’s Grok, which benefits from his celebrity status and the X platform for distribution, may face an uphill battle. Appfigures noted that the problem for new entrants isn’t necessarily a lack of quality — it’s that users looking for AI just download ChatGPT by default.

Instagram, TikTok Knocked Down — For Now

Instagram, which had held the No. 2 position on the App Store and Google Play in both January and February, fell behind ChatGPT in March. TikTok, usually the top dog, dropped to third place — a shift that reflects changing consumer interest amid regulatory concerns.

TikTok’s earlier download bump this year was driven in part by fears of a U.S. ban. While that threat has eased, with President Trump now reportedly seeking a deal with China to keep the app accessible to American users, uncertainty remains. Instagram, meanwhile, has maintained strong popularity, especially among U.S. teens.

A new survey by Piper Sandler showed Instagram as the most-used social app among American teens, with 87% monthly usage. TikTok followed with 79%, and Snapchat with 72%.

Other social apps continued to hold spots in the global top ten in March, including Facebook, WhatsApp, Telegram, Threads, and CapCut. The top 10 collectively pulled in 339 million downloads, a notable jump from February’s 299 million.

End of the Road for GPT-4 in ChatGPT

As ChatGPT enjoys a record-breaking month, OpenAI is also preparing to retire the GPT-4 model from the app by April 30, replacing it entirely with GPT-4o, the newer model now set as the default.

GPT-4o has been praised by OpenAI for its improved performance in writing, coding, STEM tasks, and conversational flow. The company says it outperforms GPT-4 in head-to-head evaluations and better follows instructions.

Originally launched in March 2023, GPT-4 cost more than $100 million to train and introduced multimodal capabilities for image and text understanding. It was later followed by GPT-4 Turbo, and now GPT-4o. While GPT-4 will no longer be available in the ChatGPT app, developers will still be able to access it via OpenAI’s API.

The company is also preparing to roll out more models, including the GPT-4.1 family (featuring GPT-4.1-mini and GPT-4.1-nano) and a new reasoning series called o4-mini. These efforts suggest OpenAI is pushing to scale its capabilities even further while keeping the user experience fast and accessible.

As the trade war between the United States and China escalates, with U.S. tariffs on Chinese imports soaring to 145% and China retaliating with a 125% levy on American goods, Beijing appears to be opting against a seemingly viable countermeasure – devaluing its yuan.

Economists and market analysts believe that while weakening the currency could theoretically offset the impact of President Donald Trump’s tariffs, China’s policymakers are steering clear of this tactic, prioritizing financial stability over short-term trade relief. The decision, rooted in fears of market chaos and capital flight, underscores China’s careful approach as it navigates one of the fiercest economic showdowns in recent history.

The latest punch in the trade war came on Friday, when China’s finance ministry announced the tariff hike from 84% to 125%, a direct response to the White House’s confirmation that U.S. tariffs on Chinese goods had reached 145%, including a 125% base rate and a 20% levy tied to fentanyl concerns. Trump, announcing the base tariff earlier this week via Truth Social, framed it as a necessary move to curb China’s “lack of respect” for global markets, vowing to end its trade dominance. China’s ministry countered, labeling U.S. actions “unilateral bullying” that violates international trade rules, yet signaled restraint by stating it would not match further tariff increases, hinting at alternative strategies.

Amid this tit-for-tat, the yuan’s role has drawn intense interest. Earlier this week, the offshore yuan slumped to a record low of 7.4287 against the dollar, and the onshore yuan hit 7.3509 on Thursday, its weakest since 2007 after the People’s Bank of China (PBoC) set its midpoint rate at its lowest since 2023. The slide fueled speculation that Beijing might devalue the yuan to make Chinese exports cheaper, offsetting the crushing effect of U.S. tariffs. However, economists overwhelmingly argue that China will not pursue this path, despite its potential as a trade weapon, due to the severe risks it poses to the nation’s already fragile economy.

“RMB devaluation will not be part of China’s retaliation toolkit to U.S. tariffs,” said Joey Chew, HSBC’s head of Asia FX, in an interview with CNBC.

She emphasized that a sharp weakening could erode consumer confidence and trigger capital outflows, a scenario China is desperate to avoid. The memory of 2015 comes flashing when a yuan devaluation led to nearly $700 billion in capital flight, destabilizing markets and shaking global confidence.

“Rapid depreciation is inviting financial crisis on its own,” said Dan Wang, China Director at Eurasia Group, highlighting Beijing’s top concern, which is preventing a repeat of such chaos.

The yuan’s stability is tightly managed by the PBoC, which sets a daily midpoint rate and restricts trading to a 2% band around it, unlike free-floating currencies like the dollar or yen. This control was evident earlier this year when the bank intervened to prop up the yuan against a surging dollar, discouraging speculative bets on its decline.

Among 11 analysts polled by CNBC, most predict only a gradual, orderly depreciation, with Mizuho’s Ken Cheung forecasting a year-end onshore USD/CNY rate of 7.12, the lowest in the group.

“The PBoC is guiding some depreciation via the fixing, but a sharp devaluation is not likely,” Cheung said, suggesting China will allow “two-way FX volatility” to navigate turbulent markets.

Even though devaluation could theoretically cushion the blow of 145% U.S. tariffs by lowering export prices, economists argue it’s a flawed strategy at this scale.

“How can a country depreciate by such a level without triggering financial instability? It will be very difficult,” said Jianwei Xu of Natixis, noting that even a significant drop wouldn’t fully offset tariffs of this magnitude.

Veteran investor David Roche took it further, arguing that a stable yuan forces the U.S. to bear the cost of its tariffs, given China’s role as America’s largest supplier.

“The best way to make the Americans pay is to keep the currency stable,” he told CNBC, suggesting devaluation could inadvertently ease pressure on U.S. consumers.

However, not all analysts dismiss the possibility of a weaker yuan. Jonas Goltermann of Capital Economics warned that prolonged high tariffs could push the USD/CNY rate to 8 by year-end, potentially sooner given recent trade war developments. But he conceded that even this wouldn’t negate the tariffs’ impact, denoting the limited upside of devaluation.

Most agree China’s economy, already stuttering with weak domestic demand and export pressures, can’t afford the risks of a currency slide, especially as it targets 5% growth for 2025.

Instead of devaluation, China is turning to other tools. On Friday, the PBoC reaffirmed a “moderately loose” monetary policy, signaling stimulus measures like infrastructure spending and consumer subsidies to offset trade losses.

“China is more likely to utilize domestic stimulus to project market stability,” said Kamil Dimmich of North of South Capital LLP, who suggested Beijing might repatriate capital from U.S. Treasury holdings to bolster the yuan. Trade diversification is another focus, with China deepening ties with ASEAN, Africa, and Latin America to reduce reliance on the U.S. market.

The trade war’s toll is already staggering. In the U.S., consumers face an estimated $1,900 in added costs per household this year, while exporters like farmers lose access to China’s $143.5 billion market. China risks a 1.5-2% GDP hit, threatening millions of jobs in export hubs.

Globally, markets are in turmoil: the S&P 500 dropped 20% from its peak on Friday, Asian indices faltered, and gold hit near-record highs. The European Union, fearing diverted Chinese goods, is exploring new trade deals, including talks to lift tariffs on Chinese EVs, while Japan and Canada navigate their own U.S. tariff battles.

However, economists agree that while devaluing the yuan remains a viable option on paper, its risks far outweigh its rewards.