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SWOT Analysis: Nigeria, West Africa’s Largest Market

SWOT Analysis: Nigeria, West Africa’s Largest Market

In advance of our Bonds, Loans & Sukuk Nigeria 2018 conference and forthcoming special report on the region, Bonds & Loans met with a broad range of local finance leaders in order to get a sense of the risks and opportunities on the horizon.

The below is a look at the strengths, weaknesses, opportunities and threats present in West Africa’s largest market over the next 12 months.

To learn more about our Bonds, Loans & Sukuk Nigeria 2018 (6 November 2018, Eko Hotel and Suites, Lagos, Nigeria), click here.

Strengths:

-          Appetite for Nigerian bonds remains strong in both local and international markets

-          The Government is prioritising new spending on large-scale infrastructure projects

-          Nigeria’s economy (and currency) has stabilised following a deep recession

-          Foreign exchange reserves are rising, aided by rising oil prices

 

Weaknesses:

-          High inflation and high interest rates continue to put pressure on the economy

-          Corporate governance issues are prevalent and remain largely unaddressed

-          Disparities between official and black-market exchange rates – with Nigeria operating a complex set of four major exchange windows

 

Opportunities:

-          Nigerian government is committed to boosting market liquidity by issuing offshore bonds regularly

-          Corporates are starting to access local bond markets for funding

-          The government is mobilising pension funds to invest into infrastructure projects

-          Interest and opportunities in renewable and sustainable financing is high

 

Threats:

-          Elections in 2019 could cause market volatilities

-          Government efforts for structural reforms may be derailed by the return to liquidity (driven by rising oil prices)

-          Monetary policy regulators’ initiatives to fully liberalise the currency are laboured and may not be moving fast enough

 

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Bonds & Loans

Bonds & Loans is a trusted provider of news, analysis, and commentary that helps illuminate the most significant issues, events and trends impacting the global emerging credit markets.

 

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