By Dipo Olowookere
Chairman of United Bank for Africa (UBA) Plc, Mr Tony Elumelu, has heaped praises on Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele.
According to the Chairman of Heirs Holdings and Founder of the Tony Elumelu Foundation, the fiscal and monetary policies put in place by the apex bank when Nigeria was in recession in 2016 helped in the putting back the economy on its feet.
Mr Elumelu further said the interventions of the CBN also buoyed the performance of the stock market last year, which closed over 40 percent higher, making it among the top five performers in the world in 2017.
Speaking in an interview with ThisDay, the serial entrepreneur, who is presently in Davos, Switzerland for the World Economic Forum (WEF), disclosed that he has a huge confidence in the nation’s economic recovery especially with the equities market sustaining its gains.
As at the close of business on Tuesday, January 23, 2018, the Nigerian stock market has risen by 16.07 percent this year alone and analysts believe the market will close 2018 higher than last year.
Mr Elumelu praised the Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr Oscar Onyema, saying “their commitment to governance and market integrity has increased investors’ confidence in the market.”
He said further that, “Consolidating on the 42 percent rally in 2017, the benchmark All Share Index has gained 18 percent year-to-date, an unprecedented return in recent times, driven by renewed local and foreign investor confidence in the Nigerian economy and markets.
“The valuation of the Nigerian market, which is currently on a 14.5x P/E, still trades at a discount to its frontier market peers and more so, at a gross undervaluation to emerging market peers, especially when we take the improving fundamentals of the economy in perspective.
“Further reinforcing prospects for the equities market, is the moderating yield on fixed income securities, given the lower interest rate outlook. I fully expect fund managers to continue to allocate increasing money to Nigerian equities.”
Speaking further, the Chairman of Transcorp Plc said, “The fruits of patient and judicious central bank interventions are being rewarded by increasing local and international investor confidence, demonstrated by the recent unprecedented performance of the Nigerian equities market and the broader improvement in the domestic macroeconomic environment.”
According to him, “Nigeria’s external reserves, which are now at almost a five-year-high, have grown to over $40 billion, just as trade and current account balances are now positive. This strong performance underpins the naira today and will indeed ensure its stability in the near and medium term.
“Inflation, which peaked at 18.7 percent a year ago, has continuously trended downwards to 15.37 percent in December 2017, with a benign outlook of further moderation, as both food and core inflation ease.
“These impressive positive developments are a clear demonstration of effective monetary policy management and businesses across Nigeria need to recognise the role of the CBN governor.”
“I salute the unwavering tenacity and enterprise of the CBN governor, Godwin Emefiele, for his initiative in creating the Investors’ and Exporters’ (I&E) window and, more importantly, the commitment of the governor in ensuring the efficient functioning of this market.
“The I&E window has attracted over $15 billion to Nigeria, enhanced the liquidity of the FX market, reduced speculative demand for foreign currency, stabilised the naira and provided the vital foundation for renewed local and foreign investors’ confidence in the Nigerian market,” Mr Elumelu said.
He also commended President Muhammadu Buhari the clear and coherent policy-making framework put in place his administration, including “the positive engagement with the Niger Delta people, which has returned calm to this oil-producing region of the country leading to the current daily production of 2.2 million barrels of oil equivalent.”
However, Mr Elumelu cautioned that Nigeria must translate these recent improvements into a long-term strategy of ensuring economic success for all.
