The below is a look at the strengths, weaknesses, opportunities and threats present in West Africa’s largest market over the next 12 months.
To learn more about our Bonds, Loans & Sukuk Nigeria 2018 (6 November 2018, Eko Hotel and Suites, Lagos, Nigeria), click here.
Strengths:
- Appetite for Nigerian bonds remains strong in both local and international markets
- The Government is prioritising new spending on large-scale infrastructure projects
- Nigeria’s economy (and currency) has stabilised following a deep recession
- Foreign exchange reserves are rising, aided by rising oil prices
Weaknesses:
- High inflation and high interest rates continue to put pressure on the economy
- Corporate governance issues are prevalent and remain largely unaddressed
- Disparities between official and black-market exchange rates – with Nigeria operating a complex set of four major exchange windows
Opportunities:
- Nigerian government is committed to boosting market liquidity by issuing offshore bonds regularly
- Corporates are starting to access local bond markets for funding
- The government is mobilising pension funds to invest into infrastructure projects
- Interest and opportunities in renewable and sustainable financing is high
Threats:
- Elections in 2019 could cause market volatilities
- Government efforts for structural reforms may be derailed by the return to liquidity (driven by rising oil prices)
- Monetary policy regulators’ initiatives to fully liberalise the currency are laboured and may not be moving fast enough
