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  • Nigeria poised to become world’s fifth-largest economy by 2075, predicts Goldman Sachs

    Nigeria poised to become world’s fifth-largest economy by 2075, predicts Goldman Sachs

    Nigeria is on track to become a global economic powerhouse, according to a groundbreaking new report by Goldman Sachs. 

    The prestigious investment bank forecasts Nigeria’s promotion to the world’s fifth-largest economy by 2075, boasting a staggering Gross Domestic Product (GDP) of $13.1 trillion. 

    This projection builds upon recent positive economic trends in Nigeria and aligns with similar forecasts from other leading financial institutions. 

    The anticipated economic boom is attributed, to the visionary leadership of President Bola Ahmed Tinubu. 

    His administration’s focus on education, skills development, and infrastructure upgrades has laid a solid foundation for sustainable economic growth.

    Policies aimed at attracting investment, establishing consumer credit, and implementing sound monetary and fiscal measures are also credited with propelling Nigeria towards a brighter economic future.

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    Goldman Sachs’ report, titled “25 Largest Economies in the World by 2075,” positions Nigeria ahead of established economic giants like Germany, the United Kingdom, Brazil, and Egypt.

    The report predicts a significant global power shift, with China surpassing the United States as the world’s leading economy by 2050, a position it’s expected to maintain until 2075. 

    India is projected to secure the second spot, followed closely by the United States and Indonesia in third and fourth place respectively.

    Nigeria’s projected economic rise is fueled by its young and vibrant population, alongside the rapid growth of key sectors like agriculture, energy, and technology. 

    However, Goldman Sachs acknowledges potential challenges that could impede this trajectory if not meticulously addressed. 

    The report commends President Tinubu’s proactive approach in tackling these issues and his commitment to prudent economic decision-making.

    The extensive analysis by Goldman Sachs utilizes a well-rounded approach, considering factors like demographic trends, technological advancements, productivity enhancements, and projected GDP growth rates. 

    While long-term economic forecasts are inherently uncertain, they offer valuable insights into a future where economic power gravitates towards Asia and fosters the rise of emerging economies like Nigeria. 

    This projected shift underscores the dynamism of the global economic landscape and the increasing importance of regions like Africa, Latin America, and the Middle East in shaping a more diversified world economy. 

    Reacting to the report, Alpesh Patel, CEO of Praefinium Partners, highlighted the 2075 projection as a glimpse into a future with a more balanced global economic distribution, where emerging economies play a more prominent role. 

    “This shift underscores the critical role of effective economic reforms, technological innovation, and demographic trends in shaping the future of the global economy.

    “The ascension of countries like India, Indonesia, and Nigeria, coupled with the continued influence of established powers like the US, China, and Germany, paints a picture of a diverse and dynamic global economic landscape in the latter half of the 21st century.” 

  • Naira: Goldman Sachs predicts sub N1,000/$ exchange rate

    Naira: Goldman Sachs predicts sub N1,000/$ exchange rate

    • Says currency outperforming others globally

    The global investment banking, securities and investment management firm Goldman Sachs Group, Inc. yesterday acknowledged the resurgence of the Naira, rating it as one of the best performing currencies currently around the globe.

    Goldman Sachs, which had initially predicted a Naira-dollar exchange rate of 1,200 by year-end 2024, now believes the Nigerian currency could eventually exchange for 1000 to a dollar or even below, provided the authorities are able to maintain their economic reform tempo. 

     This bullish forecast, it says, follows capital inflows and interest rate adjustments, aiding the Naira recovery from substantial losses incurred due to two devaluations since June, following the government’s relaxation of currency controls.

    Goldman Sachs Group Inc. is a highly regarded multinational investment bank and financial services company reputed for its diverse range of financial services.

    Economist Andrew Matheny of Goldman Sachs said the Naira could reach 1,000 or even dip below to the dollar.

    “This probably can run further; we would see an extension of the move to 1,000 and maybe even sub-1,000,” Matheny said in an interview.

    Since Goldman’s call in February, “six weeks have gone by and they’re continuing to hold the line, so that’s encouraging,” he said.

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    Two consecutive interest rate hikes totaling 600 basis points have attracted capital inflows and curbed inflation. April alone saw a 12 per cent appreciation against the dollar, building on a 1 per cent gain in March.

    These measures, according to the firm, “have alleviated the dollar shortage, reducing volatility and reliance on the black market.

    Matheny emphasised the positive trajectory since Goldman Sachs’ initial prediction, highlighting the sustained policy efforts.

    The report credits President Tinubu’s decisive leadership and the work of his economic team anchored around the ACE team – Zacheus Adedeji, chairman of the Federal Inland Revenue Service; Olayemi Cardoso, CBN Governor; and Olawale  Edun, Minister of Finance/Coordinating Minister of the Economy) for these positive changes and reforms like eliminating fuel subsidies which aims to revitalise the economy.

    Goldman Sachs’ positive outlook reflects optimism for sustained growth and stability under President Tinubu’s administration.

  • Goldman Sachs predicts N1,000/$ after bold reforms

    Goldman Sachs predicts N1,000/$ after bold reforms

    The Nigerian Naira is exceeding expectations and may potentially surpass the 1,000 Naira mark against the dollar.

    According to Goldman Sachs, this bullish forecast comes on the heels of aggressive central bank policies and President Bola Tinubu’s economic reforms.

    Goldman Sachs Group Inc. is a highly regarded multinational investment bank and financial services company known for its diverse range of financial services.

    The international investment bank had initially predicted a Naira-dollar exchange rate of 1,200 by year-end 2024.

    However, the recent appreciation of the Naira has prompted Goldman Sachs to effect a revision of its earlier forecast.

    Read Also: Goldman Sachs predicts N1,200/$ rate for naira in 12 months

    Economist Andrew Matheny of Goldman Sachs suggests the Naira “could see it reach 1,000 or even dip below to the dollar.”

    The central bank’s decisive action is a key factor for this projected appreciation of the Naira.

    Two consecutive interest rate hikes totalling 600 basis points have attracted capital inflows and curbed inflation. April alone saw a 12 percent appreciation against the dollar, building on a 1 percent gain in March.

    These measures Goldman Sachs said “have alleviated the dollar shortage, reducing volatility and reliance on the black market.

    Matheny emphasized the positive trajectory since Goldman Sachs’ initial prediction, highlighting the sustained policy efforts.

    The report credits President Tinubu’s decisive leadership and the work of his economic team anchored around the ACE team (ACE – Adedeji, Cardoso, Edun) for these positive changes and reforms like eliminating fuel subsidies which aims to revitalize the economy.

    Goldman Sachs’ positive outlook reflects optimism for sustained growth and stability under President Tinubu’s administration.

  • Goldman Sachs predicts N1,200/$ rate for naira in 12 months

    Goldman Sachs predicts N1,200/$ rate for naira in 12 months

    • Applauds Tinubu’s monetary policy direction
    • CBN sells N1.3tr treasury bills to strengthen Naira

    The naira will rebound to N1,200 to a dollar in the next 12 months, projection by Goldman Sachs analysts have shown.

    In a report released yesterday, the analysts – Andrew Matheny and Bojosi Morule – predicted that the naira is grossly undervalued.

    They said the local currency will appreciate as Nigeria sustains its transition away from unstable monetary policies and significantly negative real interest rates, fueling significant depreciation of the naira.

    They said that for the local currency to appreciate, Nigerian authorities are expected to sustain the orthodox monetary pathway and tighten policy adequately to draw in the needed capital inflows.

    Across the forex market last week, the Naira remained stable and traded within a similar band as the previous week. At the official Window, the naira fell 4.9 per cent against the base currency (dollar) to N1627.40/$1.00. Similarly, the price currency (naira) dipped 5.3% w/w against the base currency (dollar) to N1600.00/$1.00 at the parallel market.

    Analysts at Afrinvest West Africa noted that the spread between the official and parallel rates sustained its streak for the second week though weekly average declined 98.8 per cent to N27.40.

    In the week ahead, the Naira is likely to trade within a similar band across FX segments, supported by intensified regulatory spotlight.

    Continuing, the Goldman Sachs analysts lauded the recent monetary policy transitions under President Bola Tinubu, noting the significant shift towards inflation targeting and a more flexible exchange rate as positive developments.

    The report said: “We argued that addressing Nigeria’s currency and external liquidity crisis required positive real interest rates and capital inflows, conditions that were both present – at least in a limited form – for the first time last week on the back of the central bank’s monetary policy adjustments and bill issuance.

    “In our view, this is the cue to turn constructive on the FX outlook, even if more decisive rate increases and confirmation of the policy shift are likely required to attract meaningful foreign inflows.

    “This is especially the case given that in the near term, inflation on our estimates is likely to rise further on the back of lagged currency depreciation, and given that real interest rates are still comparatively low relative to elsewhere (most notably Egypt, which is likely to be a beneficiary of large inflows on the back of recent policy adjustments),” it added.

    They added: “We think the Naira looks cheap on a REER basis in a historical context. Added to this, the current account surplus was +3.5 per cent of Gross Domestic Product in third quarter of 2023, and we expect it to increase above +5.0 per cent on the recent FX moves and associated import compression.

    “We thus see reason for the Naira to be undervalued, and we see it appreciating to 1200 within the next 12 months.”

    CBN sells N1.3tr treasury bills to strengthen Naira

    The Central Bank of Nigeria (CBN) has sold a record N1.3 trillion in Treasury Bills, specifically targeting overseas investors.

    Read Also: Report: CBN owes JP Morgan, Goldman Sachs $15b cash receipts

    This move aims to increase foreign exchange (forex) flowing into Nigeria, ultimately strengthening the Naira’s value.

    The Naira has been under pressure lately due to a lack of forex available. Treasury Bills, also known as T-Bills, are essentially short-term government IOUs. They are a secure way for investors to earn a return on their money.

    By offering attractive interest rates, the CBN is hoping to entice foreign investors to buy these T-Bills. This injects much-needed dollars into the Nigerian economy, which helps stabilise and potentially lower the exchange rate.

    The high demand for these T-Bills is a positive sign. Investors submitted bids totaling N1.5 trillion, exceeding the N312.9 billion offered by the CBN. The Bank ultimately awarded N1.3 trillion in T-Bills at an interest rate of 21.49 per cent.

    These funds will be used by the CBN to intervene in the forex market, buying dollars and selling Naira. This increased supply of dollars should help bring the exchange rate down from its current high of around N1,500 to a dollar.

    A stronger Naira benefits everyone in Nigeria. It makes imports cheaper and reduces inflation. The CBN’s efforts to attract foreign investment through T-Bills is a positive step towards achieving a more stable and healthy Nigerian economy.

  • Trump says he prefers having rich person in charge of economy

    Trump says he prefers having rich person in charge of economy

    U.S. President Donald Trump said he wouldn’t want a poor person in charge of the economy, as he defended his cabinet, which is thought to be the wealthiest in the country’s history.

    “Somebody said, ‘Why did you appoint a rich person to be in charge of the economy?’” he told supporters at rally in Iowa.

    “So I said …. because that’s the kind of thinking we want… because they’re representing the country.”

    Making a particular reference to Commerce Secretary Wilbur Ross, a billionaire former investor, Trump said:, “They don’t want the money. And they had to give up a lot to take up these jobs.”

    Trump, himself a billionaire, went on to refer to Gary Cohn, his chief economic advisor.

    “This is the president of Goldman Sachs. Smart. Having him represent us, he went from massive paydays to peanuts, to little tiny … I’m waiting for them to accuse him of wanting that little amount of money.

    “These are people that are great, brilliant business minds, and that’s what we need, that’s what we have to have so the world doesn’t take advantage of us.

    “We can’t have the world taking advantage of us any more. And I love all people, rich or poor, but in those particular positions I just don’t want a poor person.

    “Does that make sense? Does that make sense?

    “If you insist I’ll do it but I like it better this way, right?”

    Trump’s Secretary of Education Betsy DeVos is also a billionaire heiress, while Secretary of State Rex Tillerson, the former boss of oil giant Exxon, is thought to be worth hundreds of millions of dollars.

    Other rich appointees include Treasury Secretary Steven Mnuchin, a former hedge fund manager, and Housing Secretary Ben Carson, who made his fortune selling books on his career in medicine and his political ideas.

  • Goldman Sachs to invest in Nigerian e-commerce firm

    Africa Internet Group (AIG) has secured 225 million euros in funding from investors including United States bank Goldman Sachs, South Africa’s MTN and Rocket Internet, the Nigerian e-commerce group said on Thursday.

    Reuters reported that the firm attracted 75 million euros from French insurer AXA last month.

  • Goldman Sachs targets $150b in clean-energy deals by 2025

    Goldman Sachs Group Inc set a goal of arranging financing or investments in $150 billion worth of clean-energy projects by 2025, part of a promise to “harness market-based solutions” to address climate change.

    The new target almost quadruples the $40 billion goal Goldman Sachs set in 2012. The New York-based investment bank also said it expects to spend $2 billion to make its operations more environmentally friendly and will seek to get all of its own electricity from renewable sources by 2020, according to a statement.

    “Environmental issues have become increasingly relevant to our clients and our investors, and have become core to our business,” Kyung-Ah Park, head of Goldman Sachs Environmental Markets, said in the statement. “We are leveraging the talents of our people and the breadth of our businesses to facilitate the transition to a low-carbon future and promote sustainable economic growth.”

    The goal was part of Goldman’s guidelines for evaluating environmental impact in its financing decisions. The company said it would be “selective” and “apply enhanced due diligence” on transactions supporting coal-mining, and didn’t rule out such investments.

  • Reduction in Nigeria’s oil, others limit availability

    Reduction in Nigeria’s oil, others limit availability

    Goldman Sachs Group Inc. (GS) said price risks for Brent crude in the second half of the year have changed “to the upside” amid production losses in some Organisation of Petroleum Exporting Countries (OPEC) nations and political threats to supply.

    Reductions in output from Libya, Iraq and Nigeria have the potential to limit availability, the bank said yesterday in an e-mailed report. Even so, increased production outside the OPEC will probably keep global markets adequately supplied this year, said Goldman, which forecasts Brent crude to average $105 a barrel in the second half. Brent futures traded at about $108 a barrel in London yesterday.

    “The risks have shifted more to the upside over the short term due to the possibility of continuing OPEC production shortfalls and increased geopolitical risks,” Jeff Currie, the head of commodities research in New York, said in the report.

    OPEC output fell by 370,000 barrels a day in June amid unrest and violence in Libya, Iraq and Nigeria, the International Energy Agency (IEA) said in its most recent monthly market report on July 11.

    The losses come just as increasing seasonal demand for motor fuels is pushing up global oil consumption, Goldman said. OPEC supplies about 40 per cent of the world’s crude.