Nigeria’s Gross Domestic Product (GDP) is projected to grow by 3.1% in 2024, according to a recent report published in the FBNQuest Research Economic Outlook Report.
FBNQuest is the investment banking and asset management subsidiary of FBN Holdings Plc.
The report outlines the firm’s perspective on the macroeconomy, socio-political environment, and capital market featuring views on traditional asset classes (fixed income and equities).
It also includes expectations for the current year.
The report projects that market yields are expected to remain high this year, despite the current economic challenges.
This is due to factors such as the tight monetary policy that the Central Bank of Nigeria (CBN) is expected to sustain, as well as a sizable supply of Federal Government of Nigeria (FGN) paper which will be driven by domestic borrowings of around NGN6.1trillion naira.
Tunde Abidoye, Head of Equity Research at FBNQuest, stated that “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 favourable economic outcomes.”
Abidoye stated that the proposed tax reforms’ implementation is poised to incrementally elevate non-oil revenue from its current sub-5% of GDP to the high single digits.
“Ultimately, this trajectory aligns with the Federal Government’s medium-term objective of reaching 8% non-oil revenue as a proportion of GDP.
“We need strong policy interventions and concerted efforts to strengthen tax compliance and encourage investments, especially at the base level, for increased business productivity and sustainability,” he added.
FBNQuest anticipates a correction in the equity markets in the next few months, with an expected market return of approximately 10% in 2024, in light of the rich valuation levels in the equity market.
To access the full report, visit: www.fbnquest.com