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Nigeria Strategy Report H2 2021

Nigeria Strategy Report – H2 2021 Excerpts  

Global Economy, Domestic Economy and Markets

 

• The first half of 2021 was marked by a cocktail of medical and economic antidotes prescribed by policy makers around the world to kickstart their economies, following some ease in the spread of the COVID-19 pandemic.
• The much-awaited economic rebound which took off in the first half of the year has shown strong signs of life for economies around the world. On the domestic front, Nigeria emerged from an economic recession and has enjoyed consecutive quarters of growth and is poised to maintain that trajectory through 2021. However, several downside risks abound. The macroeconomic environment remains volatile with growth coming in slower than anticipated, inflationary pressures weighing heavy on consumers, continued FX illiquidity, regulatory instability and insecurity concerns, the investment environment remains largely unattractive.
• On the market front, an elevated yield environment in the fixed income space induced a reallocation of assets from the equities market. Consequently, the equities market registered only two months of positive returns in the first half of the year. Furthermore, foreign participation in the market dwindled significantly with domestic players accountable for over 70% of the total value of transactions carried out so far in 2021. However, bargain hunting opportunities continue to present themselves in the market leaving room for a possible turnaround in fortunes.
• In this report, we analyzed the performance of global economies alongside the Nigerian economy, with regards to internal and external factors which could serve as drivers or drags of growth and other macroeconomic indicators in the second half of the year.