Review of the Nigerian Economy and the Capital Market
The review covers global economic developments, domestic economy metrics, and outlook, focusing on key factors influencing Nigeria's growth projection for 2022. It discusses the impact of COVID-19, economic uncertainty due to the Ukraine war, and projections for inflation and GDP growth.
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Review of the Nigerian Economy and the Capital Market Hassan H. Suleiman, Ph.D. Economic Research & Policy Management Division, Office of the Chief Economist, Securities and Exchange Commission, Nigeria April 6TH , 2022 SECURITIES AND EXCHANGE COMMISSION, NIGERIA
Outline Global Economic Developments 01 Domestic Economy 02 Market Metrics 03 Outlook 04
The Global Economy The Global Economy (IMF, (IMF, WEO WEO- -JAN 2022) JAN 2022) Global growth weakened (-3.1%) in 2020 due to: Impact of COVID-19 pandemic Disruptions in global supply chains Falling global aggregate demand Increasing unemployment Rising sovereign and corporate debt Estimate Projections 2020 2021 -3.1 5.9 -4.5 5.0 -3.4 5.6 -2.0 6.5 -1.7 4.0 Country/Region World Advanced Eco. Euro Area EMs & Developing Sub-Sah. Africa 2022 4.4 3.9 4.0 4.8 3.7 2023 3.8 2.6 2,6 4,7 4.0 The in 2021 global economy grew 5.9 percent The International Monetary Fund (IMF) s global growth projection is put at 4.4% in 2022. United States United Kingdom .. China India Brazil South Africa -4.5 -9.4 5.0 7.2 3,9 4.7 2,5 2.3 SSA countries had contracted at 1.7% in 2020. we expect the SSA economy to grow by 3.7% in 2022. 2.3 -7.3 -3.9 -6.4 8.1 9.0 4.7 4.6 4.8 9.0 0.3 1.9 5.2 7.1 1.6 1.4 Nigeria contraction in 2020 was 1.8% but is projected to grow 2.7% in 2022. Nigeria -1.8 3.0 2.7 2.7
The Global The Global Economy Economy The global recovery is set to decelerate markedly amid: COVID-19 flare-ups lingering supply bottlenecks Falling global aggregate demand The economic uncertainty created by the Ukraine war UNCTAD alerts global economic growth will decrease to 2.6% from 3.6% for 2022 Global factory activity slows as Ukraine crisis, inflation bite Three main factors are likely to take inflation higher: energy prices food inflation global manufacturing bottlenecks
Domestic Economy MPR 11.5% As at April 1,, 2021 MPR 13.5 11.5 15 10 12.5 5 0 Jan Jan Jan Jan Mar May Sep Mar May Sep Mar May Sep Nov Nov Nov Jul Jul Jul 2019 2020 2021 2022 MPR 33.3% UNEMPLOYMENT 3.4% 2021 INSECURITY (Q4 2020) GDP Growth 6 5.01 15.7% Inflation Rate 4.03 3.98 4 19 Feb 2022 2 18.17 18.12 0.51 17.93 0.11 17.75 18 17.38 17.33 0 17.01 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 17 16.63 16.47 -2 15.99 15.7 16 15.63 15.6 15.4 -4 -3.62 15 As at Q4 2021 N39Trillion -6 -6.1 14 -8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Data Source: NBS, IMF Source: CBN SECURITIES AND EXCHANGE COMMISSION, NIGERIA
Domestic Economy 1.25 million barrels per day (BPD) As at Feb, 2022 N416.22 As at April 1, 2022 $110.13 As at April 1, 2022 Brent Spot Price Dollars per Barrel Foreign Reserves Position 140 50,000.00 45,000.00 120 40,000.00 35,000.00 100 30,000.00 80 25,000.00 20,000.00 60 15,000.00 10,000.00 40 5,000.00 0.00 20 2016 July 2017 July 2018 July 2019 July 2020 July 2021 July 2016 January 2017 January 2018 January 2019 January 2020 January 2021 January 2016 October 2017 October 2018 October 2019 October 2020 October 2021 October 2016 April 2017 April 2018 April 2019 April 2020 April 2021 April 0 Data Source: NBS, IMF Source: CBN SECURITIES AND EXCHANGE COMMISSION, NIGERIA
Capital Market Performance January to December 2021 Primary Issuance Net Asset Value Issuance Type N S/N Classes of Funds Net Asset Value as at 31st December, 2021 Equity Issuances 118,805,220,000.00 1 Equity Funds 15,756,130,822.72 Debt Issuances 476,113,000,000.00 2 Money Market Fund 548,260,058,593.72 Total 594,918,220,000.00 3 Bond/Fixed Income 378,162,574,509.53 Funds 4 Dollar Funds 259,543,414,296.98 During the year 2021, total new securities issuances amounted to N594.92billion of which N476.11billion were debt and N118.81billion were equities. Therefore, 80.03% of issuances in the period were debt while 19.97% were equities. 5 REIT 50,192,148,740.47 6 Mixed 29,348,405,683.02 7 Ethical 2,529,376,421.83 8 Shari'ah Compliant 17,925,971,690.90 Funds Aggregate NAV (N) 1,301,718,080,759.17 SECURITIES AND EXCHANGE COMMISSION, NIGERIA
Nigerian Capital Market Performance Data Source: Nigerian Stock Exchange SECURITIES AND EXCHANGE COMMISSION, NIGERIA
Outlook Domestic Heightened geopolitical tensions Persisting macroeconomic uncertainties Inflation Subdued growth Increase in crude oil price oil subsidy Presidential race Diminishing pandemic impacts Global Covid-19 still around Technology and fintech ESG
Headwinds & Tailwinds Thank You SECURITIES AND EXCHANGE COMMISSION, NIGERIA
