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Foreign investors may raise Nigeria’s risk profile – BGL

By on April 23, 2014

Analysts at BGL Plc, a research and investment firm, have said that the evolving economic and socio-political environment may heighten the nation’s risk profile among investors.

According to the analysts, as the nation prepares for the elections next year, key reforms processes are already slowing down.

This, they said, might not project the economy in a positive way to the international investment community.

BGL experts said these in their economic review of the first quarter.

The report read, “We posit that the evolving political economy based on the poise of the critical actors may be heightening Nigeria’s risk profile ahead of the 2015 elections as critical reforms processes appear to be slowing down while opportunities for the consolidation on gains of democratic governance are closing.

“We argue that opportunities for investment and growth exist provided predicted improved outcomes of the ongoing electricity sector reforms and agricultural transformation agenda are realised.

“Volatilities in financial markets and assets prices are likely to characterise the year on the back of domestic and global economic variables. We conclude that the responsibilities for resolving the key challenges facing the economy in the short to medium term lie with the fiscal authority.”

However, the analysts said the resilience of the economy was sustained in the first quarter.

They argued that the economy remained largely stable despite the myriad of global and domestic events that contributed significantly to key macroeconomic and socio-political environments during the period.

The BGL analysts noted that the rustling effects of the United States Federal Reserve’s tapering on emerging markets had continued to put pressure on the country’s currency and capital market.

They added, “Political risks are increasing as insurgencies continue in addition to political wrangling amid allegations and counter allegations on governance on oil revenue which pose a threat to reforms.

 

 

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