Contrary to projections in many quarters, Nigeria’s economic performance will likely improve this year with improved government revenue and major reforms heralding economic stability and growth.
This was the conclusion of leading stockbrokers who yesterday in Lagos x-rayed Nigerian economy, the state of the capital market last year and outlook in the year.
They agreed that despite the headwinds and uncertainties associated with the economy, they said the overall outlook for the Nigerian economy and the capital market remains positive.
They however called on the incoming government to undertake bold reforms and further consolidate fiscal and monetary policies in order to address structural inefficiencies in the economy and free up synergistic growth.
They noted that the Nigerian economy is going through a tough period with headwinds, including imported inflation, huge debt service-to-revenue ratio, high exchanges rates, forex scarcity, devaluation of currency, budget deficit of N12 trillion in 2023, removal of fuel subsidy on petroleum price, insecurity and uncertainty about the outcome of the upcoming presidential election, among others.
They spoke during the conversation organised by Chartered Institute of Stockbrokers (CIS) on “The Nigerian Economic Review of 2022 and Outlook for 2023”.
The experts assured the public that the economy had strong potential to bounce back this year.
President, Association of Capital Market Academics, Prof. Uche Uwaleke, said contrary to projections in several quarters, government’s fiscal position is likely to improve in the year because of improvement in crude oil revenue from increase in crude oil production, assuming crude oil price does not disappoint and incidence of oil theft continues to go down.
“Savings from fuel subsidy removal will increase in government revenue. Implementation of Finance Act 2022 and unification of exchange rates will boost economic growth and development ,” Uwaleke said.
Chairman, Research and Technical of CIS, Mr Ayodeji Ebo said that expected higher crude oil would increase government revenue in the year.
“Goods account balance is expected to recover in 2022 due to higher crude oil prices. In 2023, the goods account is expected to benefit from reduced forex outflow on petroleum motor spirit ( PMS importation, following the coming onstream of Dangote Refinery and promotion of non-oil export.
“Increase spread of working-class Nigerians in the diaspora is expected to continue supporting the strong performance of the transfers account, especially, the remittance component. Political stability post-2022 and more market-oriented policies of the new administration are expected to drive a steady recovery in portfolio inflows over the medium term. An optimal growth rate for Nigeria is between 5.0 per cent and 7.0 per cent per annum,” Ebo said.
President, Chartered Institute of Stockbrokers (CIS) Mr Oluwole Adeosun, explained that the Nigerian economy would experience growth during the year.
He listed many achievements of the Institute in the review period and stated that the institute shall pursue its advocacy roles with renewed vigour
“In 2023, we shall be working to increase the number of Nigerian universities offering Post-Graduate and Bachelor’s degree courses in securities and investment and capital market studies. We shall be pursuing more vigorously, activities to promote capital market literacy across the entire geo-political zones of Nigeria.
“In furtherance of our ‘Catch Them Young campaign’, we shall make deliberate efforts to penetrate the university campuses more rigorously and effectively. The CIS Academy will work even harder to bring affordable world class training to our members, in emerging areas like derivatives, etc,” Adeosun said.