During the Afrinvest midyear investment parley held in Lagos, Mr. Ike Chioke, the Managing Director of Afrinvest (West Africa) Limited, shared insights on Nigeria’s economic outlook for the rest of 2023. He highlighted the potential benefits of unifying the country’s foreign exchange regime, projecting a significant debt reduction of N350 billion.
With the recent unification of the official and parallel market rates, Chioke emphasized the positive repercussions this move could have on the domestic economy. While it led to a 40% devaluation of the naira, state governments may witness a 40% improvement in their bank accounts, potentially boosting their financial positions.
Additionally, the removal of fuel subsidies resulted in an estimated N2 trillion in government savings this year, further strengthening the economy. However, Chioke cautioned that addressing the “liquidity subsidy” element is crucial to avoid potential inflationary pressures, which could push inflation from the current 23% to 24% by the third quarter of the year.
Chioke urged the new government to adopt policies that address the root causes of economic challenges, such as investing in infrastructure, enhancing national security, and prioritizing human capital development in areas like education, healthcare, and youth empowerment.
As the economic landscape remains dynamic with potential opportunities and challenges ahead, effective management of economic measures will largely depend on the policies adopted by the new government. The Afrinvest midyear investment parley aimed to inform the investment public and Afrinvest’s clients about the importance of vigilance in managing investments considering various global and domestic economic factors at play in H1’23 and their potential impact on H2’23.