Stockbrokers optimistic about Nigeria’s 2023 economic growth

1 week ago

By Chinwendu Obienyi and Chukwuma Umeorah 

Having x-rayed the state of the Nigerian capital market in 2022, top stockbrokers have forecasted recovery in 2023 despite the headwinds and uncertainties associated with the economy. 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 amongst others.

This was even as the stockbrokers said that rescuing the country from its tipping point, fiscal leakages needs to be blocked in order to lower the cost of governance, adding that complete removal of the Prime Motor Spirit (PMS) subsidy would be a positive trigger for fiscal enhancement capacity.

The CIS made this known during its macroeconomic outlook for 2023 which held in Lagos recently.

Speaking at a separate time during the conversation, two prominent stockbrokers, Professor Uche Uwaleke, President of Association of Capital Market Academics and  and Mr Ayo Ebo, Chairman, Research and Technical of CIS, who spoke on the “Macroeconomic Performance and the Capital Market” and the Nigerian economic review of 2022 and outlook for 2023 respectively  assured the investing public that the economy had strong potential to bounce back this year.

 They however urged whoever emerges the the Nigerian President after this year’s election government to address structural issues that militate against the country’s economic development.

 “Contrary to projections in several quarters, government’s fiscal position is likely to improve in 2023 on account of the following: 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.

  Ebo stated 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 on stream of Dangote’s 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 per cent and 7 percent per annum” Ebo said.

Also speaking, The President, CIS, Oluwole Adeosun, hinted that a return to a market-friendly monetary policy regime, ending of subsidy payment, and improved non-oil export earnings would be key to ending the Naira free-fall.

Highlighting imperatives actions the new administration must not trivialize, Adeosun said, the adoption of holistic approach to solving insecurity challenges would be a major win for the next administration while adding that the reversal of the counter-productive land border closure for essential goods not adequately produced locally would be key in reversing runaway inflationary trend

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