The Nigeria Mid-Year Outlook Report

By Cordros Capital

We are pleased to share with you, the Nigeria Mid-year Outlook Report — with the theme “Stable Macros, Political Concerns, Cautious Markets”.

In the report, we analyse the Nigerian economy in detail, discussing the salient events that happened in H1-2018, but dwelling more on expectations for the second half of the year. 

Following our critical assessment of the Nigerian economy at the turn of the year, we concluded that vis-à-vis investment and business strategy, in 2018, the best course to take is to look beneath the surface. We were of the view that the sub-optimally diversified nature of the Nigerian economy calls for a cautious approach towards riding on the prevailing wave of recovery. In effect, we guided to the “2-3-1 formation”.

So far this year, the turnout of event has both been instructive and in line with our position. Globally, economic growth is progressing as expected, albeit with downside risk hinged primarily on global trade tussle. Market proceedings have been largely impacted by the significant volatility of frontier and emerging assets, elicited by rising US treasury yield in the face of monetary policy normalisation by the Fed.

On the domestic front, economic recovery also progressed, albeit at a slower pace (in the absence of structural reforms), with markets losing steam after an impressive start to the year.

While still optimistic about the macroeconomic climate over the second half of the year – highlighted by stable macros – the combination of heightened political concerns locally and continued external market risks necessitate a readjustment of our prior guidance to cater to a more cautious market outlook.