New GDP will attract more foreign investors, say experts
Stockbrokers have expressed their hope that rebased economy would attract more foreign investors into Nigeria.
Nigeria, last week, after rebasing its economy, emerged Africa’s biggest economy in terms of Gross Domestic Productand moved 10 positions up to number 26 in the list of economies in the world, ahead of South Africa, which used to be the largest in Africa.
Speaking with Daily Trust, Managing Director and Chief Executive Officer of APT Securities and Funds Limited, Mallam Kasimu Kurfi, said the rebasing may benefit the capital market by attracting more investors into the country, adding that the rebasing of the economy was a good development.
He said: “It also changed the earlier position of agriculture as a major component of GDP not because it contributed only 22 per cent which means other sectors of the economy play major roles. It also put us at major radar of the world and that cannot be ignored.”
Also speaking, Managing Director and Chief Executive Officer of Cowry Securities Limited, Mrs. Edoka Nkoli, said rebasing of Nigeria GDP is a positive initiative.
He said: “It shows the level of our economic activities. The size of the economy (GDP) determines the size of economic activities, the higher the size of our GDP, the bigger the opportunity for creating wealth by individual agent or economic actor.”
Speaking on the impact on Nigeria economy, she said foreigners targeting investment in emerging market will consider Nigeria as their first choice.
It will show the rest of the world that our economy/ local market can absorb larger business activities, she said, adding: “Nigeria will be attractive to foreign investors. Several sectors of the economy will experience growth as investors indicate interest and invest subsequently. Since 62 per cent of our population are below the age of 25 and our GDP is N510 billion, there is tendency of growing the GDP at more than 10 per cent per annum.”
On capital market, Nkoli noted that foreign investors might buy into quoted firms and bring in their managerial competencies.
“They can also buy quoted companies out rightly,” she said.
She argued that the development could influence more unquoted companies to seek quotation in order to be more visible to potential investors, adding that companies might access long term funds from the capital market for their growth.
“We might experience more corporate governance standard in quoted firms,” she added.