Despite uncertainties and challenges in the Nigerian economy, stockbrokers expect the economy’s recovery this year. Assuring the investing public, notable stockbrokers spoke at a webinar from the Chartered Institute of Stockbrokers, citing a solid potential for the economy to bounce back in 2023. Nigeria’s economy is currently in the middle of a mix of challenges. These include imported inflation, huge debt service-to-revenue ratio, high exchange rates, forex scarcity, devaluation of the currency, and a budget deficit of N12 trillion in 2023.
However, the speakers state that a significant economic improvement can be made possible through advancements in crude oil revenue. Increasing crude oil production and savings from the recent fuel subsidy removal can boost government revenue. Additionally, stockbrokers deem the newly implemented Finance Act 2022 and the unification of exchange rates essential to promoting Nigeria’s economic growth and development.
Further economic growth in the region
Over the years, developments of old and new sectors in Nigeria have led to new opportunities for individuals, families, and companies to manage their finances and other assets and grow their wealth. Digital banks, also known as Neobanks, provide customers with a complete banking experience through mobile apps, despite having no physical branches. In Nigeria, digital banks like Kuda Bank or Chipper Cash let users save, spend, and manage their money through the convenience of their mobile apps. Likewise, traditional banks are also upping their capabilities by conducting wire transfers from outside of Nigeria, allowing families to support the economy through remittances done in US dollars. Of course, Neobanks also offer different features from each other. Chipper Cash, mentioned above, also allows its users to invest in stocks and crypto from the same app.
As in the case of digital banking, the popularity of online trading in Nigeria allows new and old traders to bypass traditional stock trading practices. Global brokerages remain competitive by offering stable and reliable pricing; this attracts active online trading and increased client transactions. Many brokerages have also made transacting in Nigerian naira with online bank transfers easier for Nigeria-based traders. Traders can transact safely and save on currency exchange rates, as reputable brokerages promote services with no transaction fees.
On top of stock trading, Nigeria is also seeing a growth in gold investments. In 2022, the Lagos Commodities and Futures Exchange (LCFE) announced its platform would begin accommodating the trading of gold. This was in response to an absence of official platforms in the country that allowed investors to trade gold instead of shares, bonds, and exchange-traded funds. Gold is considered the third most valuable metal after platinum and palladium and holds high value. The LCFE drew inspiration from the telecommunications and contributory pensions sub-sectors, which have previously succeeded in Nigeria, to make gold trading accessible in the country.
Finally, aside from stock shares and gold, Nigerian traders and investors can benefit from the continuous growth of the digital assets market. Finery Markets, a leading provider of over-the-counter (OTC) trading solutions for institutions and crypto businesses, recently announced the launch of FM Liquidity Match, the first-ever OTC-as-a-service for digital assets trading. FM Liquidity Match will enable market players to launch a fully electronic OTC trading business and manage client relations throughout the entire trade cycle. The CEO of Finery Markets believes the new platform is the future of institutional crypto trading, focusing on making crypto transactions safer and more reliable in a post-FTX era.
Overall, investments from the Nigerian government and private companies in the region have helped make financial services and products more accessible to Nigerians. This continuous expansion and growth of fintech and other financial solutions will not only help Nigerians grow their wealth amidst economic uncertainties but will also help contribute to the growth and development of the Nigerian economy.
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