![]() Read also: 4 ways to prevent violence in 2023 elections – Crisis Groupįew investors expressed a strong preference for who wins. “It’s really not difficult to do things better.” “President Buhari has set such a low bar,” said de Sousa. Many investors, however, were cautiously optimistic that Nigeria would see improvements, whoever wins on Feb. The next president will need to ramp up government revenues from a very low base to make debt manageable and provide citizens with services, said de Sousa, noting that none of the major candidates had pledged to raise taxes. Is it in a sustainable path? No it is not,” said de Sousa. “If the question is, ‘Is Nigeria’s debt sustainable today?’ Absolutely yes, nobody has any doubt about that. “I believe that he used that word in a very liberal sense that is not the same sense that the markets give to that word,” Carlos de Sousa, an emerging market debt portfolio manager at Vontobel, said of Obi’s use of the word “restructuring”. In 2022, the federal government spent 96.3% of its revenues paying interest, the IMF said recently.Ībubakar plans to seek “debt forgiveness”, while Obi has said creditors will be “engaged for debt restructuring and possible cancellation /forgiveness”. However, its debt servicing burden is among the highest globally according to ratings agency Fitch. Nigeria’s debt-to-GDP ratio is low compared to countries with similar credit ratings. Strong and clear regulation is important for international oil and gas companies, which are pivoting to cleaner gas, said Amaka Anku, head of Eurasia Group’s Africa practice. “This is the short-term pain you have to take in a long-term game,” he said. Removing petrol subsidies, which cost $ 10 billion in 2022, is also key but a “hard sell”, said Babatunde Ojo, emerging markets equities portfolio manager at Harding Loevner. “No investor’s going to want to buy into a market where you can’t sell stock and get your money out,” he said.įoreign investors held 16% of shares on Nigeria’s stock exchange last year, sharply down from 58% in 2014, Nigerian Exchange Group data showed. brokerage Auerbach Grayson, adding that uncertainty over how long it takes to get money out of Nigeria was a big deterrent. Reform of the foreign exchange market is the number one concern for international equity investors, said Steve Pollicino of U.S. ![]() Another focus is soaring fuel subsidy costs that devour government revenues and drive up debt. ![]() According to Reuters, multiple exchange rates, widespread insecurity and low oil production due to massive crude theft are all problems that worry investors.
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