FBNQuest Sees Tinubu Implementing Reforms to Stimulate Economic Growth, Investment

March 10, 2023
bola Tinubu economic growth

By Dipo Olowookere

With the presidential election concluded and Mr Bola Tinubu declared by the Independent National Electoral Commission (INEC) as the winner, FBNQuest believes that the president-elect will likely implement some reforms that will trigger economic growth and investment in the second half of the year.

President Muhammadu Buhari is expected to hand over power to his successor on May 29, 2023, after serving for eight years in two terms of four years each.

At the presidential poll held on Saturday, February 25, 2023, Mr Tinubu of the ruling All Progressives Congress (APC) won by over 8 million votes and was trailed by Mr Atiku Abubakar of the Peoples Democratic Party (PDP), and Mr Peter Obi of the Labour Party (LP).

The two runners-up have challenged the outcome of the exercise, both laying claims to the top position.

In its outlook for 2023, FBNQuest, the unified brand identity for the merchant banking and asset management businesses of FBN Holdings Plc, through one of its top shots, Mr Tunde Abidoye, fears that, “Nigeria’s new president faces several challenges, including the fiscal pressures related to fuel subsidies, a huge budget deficit, difficulties with forex liquidity and low productivity in the oil sector.”

“Nevertheless, we expect a new manager’s bounce for the economy that will support the moderate rise in equities while interest rates are expected to remain elevated,” Mr Abidoye, the Head of Research, Macroeconomics and Fixed Income at FBNQuest, added.

The firm stated that based on its research, Nigeria’s economy would grow by 3.2 per cent this year, marginally higher than 3.1 per cent in 2022.

Concerning non-oil sector growth, the report pointed out that non-oil GDP growth had averaged 4.7 per cent y/y over the past eight quarters up to the fourth quarter of 2022 compared with 0.4 per cent in the previous eight quarters.

More recently, the services sectors, which accounted for around 56 per cent of the economy in Q4 ‘22, expanded by 5.7 per cent in the fourth quarter of 2022.

FBNQuest forecasts another positive year for equities in 2023, projecting gains of 15 per cent amid a slow first half and relatively strong performance in the second half of the year. In the fixed-income market, FBNQuest expects market yields to remain elevated through Q1 2023 and most of the rest of the year.

Dipo Olowookere

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.

Mr Olowookere can be reached via [email protected]

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