Nigerian assets are becoming increasingly attractive to global investors, buoyed by impactful reforms from the Central Bank of Nigeria. These reforms have led to improved market confidence, declining bond yields, and an optimistic forecast for 2025. Industry leaders underscore the importance of addressing structural challenges to sustain this momentum and enhance investment-driven growth.
Investors are increasingly attracted to Nigerian assets as the Central Bank of Nigeria’s (CBN) reforms show positive effects across critical sectors of the economy. This renewed investor interest has led to rising stock values and declining bond yields, indicating a recovery of confidence following challenging adjustments. According to Bismarck Rewane, Non-Executive Director of Parthian Partners, Nigeria’s economy is anticipated to overcome the most difficult phase of these reforms by 2025.
The sovereign risk spread for Nigeria has decreased to its lowest point since January 2020, recovering from the pandemic-induced premium that weighed down the economy. Despite ongoing global economic challenges, Nigeria has attracted significant foreign capital driven by currency reforms that aim to revitalize the nation’s economy. Emre Akcakmak of East Capital points out that key changes, such as enhanced currency liquidity and investor-friendly profit repatriation policies, signal a resurgence in the country’s economic activity.
Major measures like effective foreign exchange market management and moderate dollar-naira fluctuations have contributed to maintaining investor confidence, as noted by Samir Gadio from Standard Chartered Plc. Additionally, recent declines in yield rates of Nigeria’s eurobonds and oversubscription in domestic debt auctions illustrate the growing appeal of Nigerian assets in the global market.
Looking ahead to 2025, businesses and the economy are expected to benefit significantly from ongoing changes in the foreign exchange market, budget allocations, and structural reforms. Rewane emphasizes the necessity of effective policy execution to stabilize the Naira and improve the overall economic climate, asserting that investment is essential for growth and should be driven by confidence and transparency.
Rewane raised concerns regarding issues such as power supply inconsistencies and the opaque operations in the oil sector that need urgent reform. He conveyed optimism for 2025 by suggesting that conditions would markedly improve compared to previous years. Professor Olayinka David-West from Lagos Business School advocated for a digital-first approach to enhance fiscal discipline and economic planning.
Chinyere Almona, Director-General of the Lagos Chamber of Commerce, identified persistent high energy costs as a major factor driving inflation, urging prompt solutions to stabilize prices. Other industry leaders, such as Olufemi Shobanjo, CEO of NGX Regulation Limited, emphasized the importance of market liquidity in fostering confidence amongst investors and stabilizing capital markets.
Yemi Sadiku, Executive Director of Parthian Group, highlighted the necessity for an enabling environment for private sector investments in infrastructure. Olusegun Alebiosu, CEO of FirstBank Group, reported positive signals such as increased government revenues and an improved debt service ratio, supporting a favorable economic outlook.
In summary, Nigeria’s ongoing reforms and improving economic indicators are attracting global investors and fostering positive sentiments in the financial market. The anticipated recovery in 2025, marked by enhanced investor confidence, strategic reforms, and government initiatives, underlines the potential for sustained economic growth in the country. Addressing critical challenges remains essential for unlocking Nigeria’s full economic potential and ensuring stability.
Original Source: businessday.ng
