Contrary to the excitement displayed by investors in the Nigeria Stock Market over an impressive performance of the market in 2017 and early January 2018, market operators have warned the management of the Nigerian Stock Exchange and the Securities and Exchange Commission not to rely on the huge portfolio investment ploughed by foreign investors.
If the regulators do not want a recurrence of the 2008/09 near crash of the market, the experts warned that the nation’s bourse must not rely on the alleged ‘deceptive’ performance of the market, which they claimed was largely driven by the combination of the foreign investment and unreliable earnings made from crude oil.
The Managing Director, Woodland Capital Limited, Dr. Bayo Ajayi, said, “The duo factors could unravel another near crash of the market without warning, and deplete external reserves. Federal Government to strengthen the non-oil export sector rather than depend solely on rising oil prices.
“The 2019 elections might scare some of the foreign investors and that may pull the major market indicators, as most of them might take their investment along, owing to the uncertainty of macroeconomic policies as it happened in 2015 shortly before the elections.
“Our economy could slide into another recession if more attention is not paid to strengthening the non-oil sector to truly diversify foreign earnings, and drive down reliance on consumption imports. The market must earn half more of its current value to the historical peak the stock market in Nigeria ever reached.”
The Chief Executive Officer, Nigerian Economic Summit Group, Mr. Laoye Jaiyeola, explained that the country to achieve an all-inclusive growth economy, its leaders and regulators must prioritise development objectives towards running a knowledge-based economy, increase investments in technology, and improve the quality of lives of its people.
He said, “While some sectors would drive growth in 2018 oil refining would weigh down growth due to its high operational costs and frequent maintenance of the nation’s refineries, which would persist in 2018, and affect the output of refined products.
“The weak relationship between growth and employment calls for concern. Despite the economic growth experienced in 2017, unemployment and underemployment rates rose to 40 per cent as at Q3 2017. Government policies and interventions must focus on “value-addition” sectors that have the potential to create jobs on a large scale.”
According to him, it is not far-fetched to declare 2017 a progressive year for the Nigerian economy considering, especially the enviable manner the country was able to weather the prevailing economic storms at the beginning of the year.
