Report: Investors’ Perception of Nigeria Improving Marginally
Investors’ perception about Nigeria has improved marginally following the successful $1 billion Eurobond issue, which was 8.5 times oversubscribed as well as recent changes in the country’s foreign exchange (FX) policy, a report has shown.
The Chief Executive Officer, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, said this in his monthly presentation at the Lagos Business School titled: “Economic Reform by Coincidence- Does it really matter?” for March 2017.
Nigeria’s headline inflation in January spiked to 18.72 per cent.
Inflation was projected to decline marginally to 18.5 per cent in February.
The federal government plans to borrow $2.3 billion from the World Bank and China Ex-Im Bank, just as anti-International Monetary Fund’s sentiment remains high.
Rewane described the month of February as a unique month for Nigeria owing to the policy reforms, recovery in oil prices and production and what he noted as a “newly found momentum” during the month.
Commenting on events that happened in February last year, he recalled that February 2016 was the beginning of the economic decay curve. Also, he stated that February 11 2016 saw the contrived and theatrical debate on devaluation and “February 14 was the St. Valentine’s day massacre of the naira when it went from N305 to N325 per dollar in a matter of hours.”
He added: “12 months later (2017), a born again Central Bank of Nigeria (CBN) has embraced limited market reform. What a difference one year makes? Why is this February unique? The naira has gained 15 per cent in seven days.
“$600 million intervention in the spot market did the trick. Fourth quarter Gross Domestic Product growth contracted by 1.3 per cent (-1.51 full year). Growth has shrunk at a slower pace, indicating that we are at a point of inflection. We should see positive growth in first quarter 2017.”
He pointed out that with the changes in the FX market, the convergence between the parallel and official rate has begun, saying that preferential treatment towards the allocation of FX has been eliminated.
“The market remains segmented with multiple rates attached to each segment of the market. 41 items restricted from accessing forex at the official segment yet to be addressed
“Consistency in delivering weekly FX supplies could see the parallel market appreciate