Business
PROSHARE Nigeria, a specialised financial information services firm, says Nigeria needs a compound nominal annual growth rate of 22.40 per cent to reach a one trillion dollar Gross Domestic Product (GDP) target by 2030.
Mr Tosin Ige, Economist/Impact Research at Proshare, said this during the presentation of Proshare’s 2025 Capital Market Outlook Report, titled “Nigeria’s Capital Market and the Quest for One Trillion Dollar Economy” during a webinar in Lagos.
Ige noted that the current Federal Government’s GDP growth projection of 4.6 per cent for 2025, along with the Medium-Term Economic Plan (MTEP) projections, would be insufficient to achieve transformative economic growth without substantial reforms.
Ige emphasised the need for strategic policy adjustments that create an enabling environment for economic development and provide clear opportunities and incentives for the private sector to play a significant role in driving growth.
He highlighted that the country’s current GDP rebasing efforts present a tangible opportunity to adopt a market-led approach toward achieving a one trillion dollar Gross Domestic Product(GDP) target by 2030.
Ige said the rebasing efforts, alongside the deliberate crafting of capital market policies, programmes and plans would stimulate growth and development towards the target.
The analysts acknowledged that fast-changing dynamics had impacted the approach to change, its adaptation and adoption, enabling a confident confrontation of inherent institutional weaknesses and stark realities.
He noted that the market remains shallow and lacks the depth to provide long-term resources needed for transformative infrastructure development.
According to him, the journey to a one trillion dollar economy requires a reimagined capital market, as a catalyst for economic development.
Ige outlined actionable strategies to achieve this vision to include harnessing public assets, by financialising idle public assets through securitisation and urban regeneration programmes, enabling self-financing and self-sustaining projects.
He also added that others were by reinvigorating the equities market, by prioritising capital market financing for projects within the Medium-Term Expenditure Framework (MTEF).
Ige called for accelerating policy execution, through transiting from policy promises to strategic, actionable outcomes to energise markets and attract global investments.
“As proposed, should the Federal Government adopt a balance sheet or asset-centric approach to macroeconomic management, the capital market in 2025 could flourish. This is as it becomes more fit-for-purpose in alignment with a one trillion dollar economy by 2030.
“The desire would be to manage better idle public assets, which could start to be either securitised or financialised.
“To bridge the gap between a one billion dollar economy by 2030 and a possible maximum 490 billion dollars rebased GDP figures in 2024, using Proshare’s extrapolative rebasing possibilities framework.
“The FGN must now raise its capital market engagement by financialising idle and active public assets and securitising cash flows of self-financing, and create self-sustaining public infrastructure projects,” he said.
According to him, part of the process will involve listing selected state-owned enterprises on a local or foreign equity market or both in a dual listing arrangement.
In his submission, Prof. Uche Uwaleke, President, Capital Market Academics of Nigeria, supported the proposed rebasing of the country’s GDP.
Uwaleke noted that this was necessary because of the new products, sectors and changes in consumption patterns that came on board since the last rebasing of the country’s GDP 10 years ago.
He called on the government to focus on lowering the exchange and inflation rates so that the GDP would not drop after it has been raised.
The professor suggested that the government should adopt an IPO approach; Incentives, Privatisation and Optimising.This, he added, would encourage privatisation, by listing a number of government assets and optimising or financing the value of assets.
Also, Ms Olufunmilola Adebowale, Head of Research, Parthians Partners Ltd., said the GDP rebasing was long overdue, noting that the five years standard for it should be sustained, subsequently.
Adebowale, however, advised that the process for the rebasing should be streamlined to legitimate activities to project the true size and reflection of the GDP and economy.
Mr Teslim Shitta-Bey, Executive Director, Chief Economist and Managing Editor, Proshare, called for the increase of the country’s foreign reserve, noting, “it is currently inadequate”.
Shitta-Bey also charged the government to adopt Proshare’s recommendation to reduce the nation’s sectors from 46 to 14 key simpler sub-sectors to make it easier to manage.
Similarly, Ms Ademidun Shogo, Head, Corporate Analysis, Proshare, stated that the rebasing would allow the country captures its large informal sector and current market prices of goods and services.
Shogo added that underlining structural problems to the rebasing should be addressed.
Proshare is a professional practice focused on delivering research and information services to bridge the gap between investors and markets.(NAN)
A.I
Jan. 16, 2025
Tags: Proshare Nigeria
