Despite microeconomic hurdles and related uncertainty, stockbrokers predicted that the Nigerian economy will recover in 2023.
The brokers stated this Monday at a webinar organized by the Chartered Institute of Stockbrokers (CIS) tagged “The Nigerian Economic Review of 2022 and Outlook for 2023” and monitored by Nairametrics.
Strong potential: The two notable stockbrokers — President of the Association of Capital Market Academics Prof. Uche Uwaleke and the Chairman (Research and Technical) at CIS Mr Ayo Ebo — spoke on the topics ‘Macroeconomic Performance and the Capital Market’ and ‘The Nigerian Economic Review of 2022 and Outlook for 2023’, respectively.
They assured the investing public that the economy had strong potential to bounce back this year.
Tough period: The duo admitted 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 the currency, a 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.
The task for the next president: They however urged whoever emerges as the Nigerian President after this year’s election government to address structural issues that militate against the country’s economic development.
Why the economy will improve: Uwaleke noted that contrary to projections in several quarters, the government’s fiscal position is likely to improve in 2023.
- According to him, the improvement will be on account of the following: “Improvement in crude oil revenue from the 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 government revenue. Implementation of Finance Act 2022 and unification of exchange rates will boost economic growth and development ”.
In the same vein, Ebo stated that expected higher crude oil would increase government revenue in the year.
- “Goods account balance is expected to recover in 2023 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’s refinery and promotion of non-oil export. The increasing spread of working-class Nigerians in the diaspora is expected to continue supporting the strong performance of the transfer 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% and 7 % per annum,” Ebo said
On the Chartered Institute of Stockbrokers’ Scorecard, the President and Chairman of the Council, Mr Oluwole Adeosun also explained that the Nigerian economy would experience growth during the year.
CIS strategic focus: He 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 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 seven harder to bring affordable world-class training to our members, in emerging areas like Derivatives, etc,”, Adeosun said.