FBNQuest, the investment banking and asset management arm of FBN Holdings Plc, has released its latest Economic Outlook Report forecasting Nigeria’s Gross Domestic Product (GDP) to grow by 3.1% in 2024. The report, which offers insights into the macro economy, socio-political landscape and capital market trends, provides a comprehensive analysis of traditional asset classes including fixed income and equities, along with expectations for the current year.
Despite prevailing economic challenges, market yields are anticipated to remain high throughout the year. This projection is attributed to the Central Bank of Nigeria’s (CBN) expected continuation of tight monetary policies and a substantial supply of Federal Government of Nigeria (FGN) paper, driven by domestic borrowings estimated at NGN6.1 trillion.
Tunde Abidoye, Head of Equity Research at FBNQuest, emphasized the Government’s commitment to policy reforms as a potential catalyst for positive economic outcomes. Abidoye highlighted the proposed tax reforms as pivotal, anticipating an incremental increase in non-oil revenue from its current sub-5% of GDP to the high single digits. This aligns with the Federal Government’s medium-term goal of achieving 8% non-oil revenue as a proportion of GDP.
“Despite the myriad headwinds confronting the economy, such as low-single-digit GDP growth, high inflation
rates, and downward pressure on the naira exchange rates, the Government’s steadfast commitment to policy reforms holds the potential to yield favorable economic outcomes,” he said.
Abidoye stressed the necessity for robust policy interventions and concerted efforts to bolster tax compliance and stimulate investments, particularly at the grassroots level, to enhance business productivity and sustainability.
In light of elevated valuation levels in the equity market, FBNQuest foresees a correction in the coming months, with an expected market return of approximately 10% in 2024. The report underscores the importance of adaptive strategies amid dynamic market conditions, urging stakeholders to navigate potential fluctuations with prudence and foresight.
The FBNQuest Research Economic Outlook Report serves as a vital resource for investors, policymakers, and market participants, offering valuable insights to inform decision-making and strategic planning amidst evolving economic landscapes.
