Top stockbrokers have x-rayed the state of the Nigerian economy in 2022 and forecast recovery in 2023 despite the headwinds and uncertainties associated with the economy.
The brokers noted that the Nigerian economy was 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 N12tn in 2023, removal of fuel subsidy on petroleum price, insecurity and uncertainty about the outcome of the upcoming presidential election amongst others.
Speaking during a conversation organised by the Chartered Institute of Stockbrokers on ‘The Nigerian economic review of 2022 and outlook for 2023’, two prominent stockbrokers, the President of Association of Capital Market Academics, Prof. Uche Uwaleke, and Chairman, Research and Technical of CIS, Mr Ayo Ebo, spoke on the “Macroeconomic performance and the capital market” and ‘The Nigerian economic review of 2022 and outlook for 2023’ respectively.
According to a statement, they assured the investing public that the economy had strong potential to bounce back in 2023.
They however urged whoever emerged as the Nigerian president after the elections in the current year to address structural issues that militate against the country’s economic development.
Uwaleke stated, “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.”
Corroborating him, Ebo stated that expected higher crude oil would increase government revenue in the year.
He said, “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
importation, following the coming onstream 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 five per cent and seven per annum.”
Speaking on “The Chartered Institute of Stockbrokers’ Scorecard”, the President and Chairman of Council, Mr Oluwole Adeosun, also 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 would pursue its advocacy roles with renewed vigour.
Adeosun said, “In 2023, we shall be working to increase the number of Nigerian universities offering both post-graduate and bachelor’s degree courses in securities and investment/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.”