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Nigeria anticipates tough capital market, domestic economy in 2016: official

Xinhua, January 14, 2016 Adjust font size:

The year 2016 is anticipated to be a challenging year for the Nigerian capital market and domestic economy, a top official said here on Thursday.

Oscar Onyema, Chief Executive Officer (CEO)of Nigerian Stock Exchange (NSE) made the assertion at the "NSE 2015 market review and outlook for 2016" in Lagos, the nation's economic hub.

This is also in the context of adjusting to new government policies targeting import substitution, inclusive growth, security, and eradicating corruption, he added.

The downturn from 2015, has already continued into the new year, Onyema told reporters, noting that the current state of the market creates both challenges and opportunities for investors.

"Uncertainty and volatility dominate forecast for the new year and beyond as Nigeria struggles with commodity price shocks and the resultant impact on the Naira," he added.

He told reporters that the capital market has an opportunity to effectively finance the Nigerian government's proposed budget deficit for 2016 and the implementation of its Medium Term Expenditure Framework (MTEF).

"With greater clarity on policy direction, we anticipate the return of investors who had remained on the sidelines throughout 2015," he added.

Oscar said Nigeria revenue suffered extensively from sustained low commodities prices in the global market, as well as political and economic uncertainty following the general elections held in April 2015.

According to him, the NSE will focus on executing its strategies in order to continue to provide a credible platform for the economy.

"We intend to continue our collaborative efforts with the new administration and other private sector players to create a framework for financing the Nation's infrastructure and capital requirements," he said.

On the global economic outlook, Oscar told reporters that the global economy is poised for moderate economic growth in 2016, noting that recession has materialized in Brazil and Russia among emerging markets.

The trend is likely to continue amid weakening oil and other commodity prices, he said, adding that 2015 proved to be uneasy for the global economy, which is expected to have grown at 3.1 percent compared to 3.4 percent in 2014.

The director added that while the recent performance of Nigeria and South Africa, has been lackluster in Sub-Saharan Africa, the overall region has weathered the commodity slump better than Latin America and elsewhere, with growth slated at 4.3 percent in 2016, up from 3.8 percent in 2015.

According to him, this growth is expected to be supported by the moderate recovery in the global economy, and growth in low-income developing countries which compared to 2015 are projected to grow by one more percentage point to 5.8 percent in 2016.

The NSE CEO said the Exchange would focus more on establishing the right market structure to boost investor confidence and attract new listings in the years ahead.

Onyema said the NSE would introduce diverse products to enhance investment diversification and ensure an enabling policy that supports market confidence and stability. Endit