‘Foreign portfolio investments-driven growth, rising oil prices deceptive’
Development economists have raised serious issues, warning that the sudden jump of the Nigerian Stock Exchange (NSE) capitalization to N16tn should not be seen as sustainable growth especially now the country is very close to a general election.
The experts who spoke at a round table session organised by the Chartered Institute of Bankers of Nigeria (CIBN), tagged the 4th Economic Outlook: ‘Implication for businesses in Nigeria in 2018,’noted that the observed influx of foreign portfolio investment dominating the NSE and the rising global oil prices which are salutary to Nigerian economy may not be truly sustainable in an election year.
According to them, any company or government planning development s based on the two factors may have its fingers burnt as both growths are to some extent deceptive and vulnerable to plan with.
One of the experts and Chief Consultant, B. Adedipe Associates Limited, Dr. Biodun Adedipe, cautioned that “just as Nigeria approaches the 2019 elections, it is likely that most foreigners would leave the country, and most likely take their investment along due to uncertainty of macro-economic policies”.
“We need to do at least 50 per cent of what we did yesterday to get to the historical peak the stock market in Nigeria ever reached, and that was in 2008,” he said He noted that the euphoria over the seeming foreign exchange liquidity is gradually pushing Nigeria to another worrisome strait, adding that the economy could tailspin into trouble if more attention is not paid to strengthening the non-oil sector to truly diversify foreign earnings, and drive down reliance on consumption imports,” Dr. Adedipe averred.
