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Nigeria: Economy, Reserves, Equities to Grow in 2018—Report

By Dipo Olowookere

Analysts at Capital Bancorp Plc have predicted a very positive year for Nigeria in 2018, saying the economy, foreign reserves and the stock market will record significant growth.

Speaking on Tuesday in Lagos at the presentation of its Economic Review and Outlook For 2018, Managing Director of Capital Bancorp, Mr Higo Aigboje, disclosed that the nation’s bourse would post 25 percent growth this year.

In 2017, the Nigerian Stock Exchange (NSE) increased by 42.3 percent, emerging the third best performing markets globally.

In its 70-page report, the firm said performance in 2018 would be hinged on stability  of oil prices, effective management and improved liquidity of the foreign exchange market, improvement on the corporate earnings, significant focus on the non-oil sector to increase output and lower interest rate regime.

Mr Aigboje explained that effective synergy in the use of fiscal and monetary policies, government’s focus on the real sector of the economy, improved market participation by local investors and domestic institutional investors, efficient regulation of the market by the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) are other factors that will help to sustain the market rally.

“Others are passage, passage of Petroleum Industry Bill, unbundling of Nigerian National Petroleum Corporation and listing of resultant companies and deliberate efforts aimed at encouraging more listing on the NSE company such as Telecom, Gencos among others,” Mr Aigboje said.

The capital market operator also disclosed that by the end of 2018, the nation’s external reserves will cross $48.50 billion.

He said this growth would be achieve if government does not irrationally increase its spending during the year especially in the second half of the year as the country begin to close in on the election period and the price of oil continues to firm up or remains stable at current level.

However, he warned that sudden rise in insecurity can trigger exit of the Foreign Portfolio Investors (FPI), political instability owing to forthcoming general elections, sudden reversal in oil prices, an upturn in the yields of fixed income securities and failure in the banking sector, which may trigger a sell-off and cause further damage to the entire stock market.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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