The Chief Economist and Advisory Partner at PricewaterhouseCoopers, Mr Andrew Nevin, has said the 2019 election outcomes, policy implementation slowdown and sell-offs by foreign investors in 2018 will slow growth in the stock market in the first half of the year, amid monetary tightening by members of the frontier markets.
Nevin, while speaking at a meeting of the Association of Corporate Treasurers of Nigeria in Lagos, noted that key drivers for the market for the first half of 2019 included commodity prices, exchange rate movement and stability, and inflation rate.
He said, “In 2018 we predicted a moderate increase in foreign portfolio investment and a slowdown by H1 2018, driven by uncertainty ahead of the elections.
“We expect FPI growth in first-half 2019 to remain low and lower than pre-2018 level. We expect foreign direct investment flows to be dampened by lackluster implementation of policy reforms.”
Nevin identified key risks to foreign investment in Nigeria to include declining interest rate differentials as advanced economies continued to tighten policy rates, political instability following the 2019 elections, unfavourable investment climate and broad macroeconomic instability.
He said global FDI flows fell by 19 per cent in 2018, adding that 2018 FDI flows to Africa increased by six per cent from $38bn to $40bn.
According to him, while South Africa grew by 446 per cent and Egypt by seven per cent, Nigeria fell by 36 per cent (to $2.2bn) and was overtaken by Ghana with $3.3bn.
Nevin said Nigeria was not among the fastest-growing economies in sub-Saharan Africa by percentage growth in GDP.
The Managing Director/Chief Executive Officer, Graeme Blaque Advisory, Zeal Akaraiwe, who also doubles as the chairman of the Interim Council, ACTN, said the association fostered the interests of corporate treasurers in Nigeria by providing a platform for policy advocacy, discussions on issues of mutual interest, education and standard development of the corporate treasury function.
He added that as part of the efforts of the association towards the education and enlightenment of its members, it regularly hosted breakfast meetings where issues on economic policies as well as policy directions and their impacts on the activities of the corporates were reviewed and discussed with regulators, economists and financial markets experts as lead speakers/discussants.