Nigerian Capital Markets update
The second quarter of 2021 marked three consecutive quarters of economic growth (year-on-year) as the Nigerian economy continues to recover from the headwinds experienced in 2020. According to the National Bureau of Statistics (NBS), real gross domestic product (GDP) grew year-on-year by 5.0% in Q2 2021.
Capital importation into Nigeria stood at $2.79billion in H1 2021, a 61% year-on-year decline when compared to the $7.15billion recorded in H1 2020. Of the $2.79billion, Foreign Portfolio Investment (FPI) accounted for 54.8%, while Other investments and Foreign Direct Investment (FDI) accounted for 36.8% and 8.4% respectively.
In terms of macroeconomic policy, in line with the CBN’s drive to unify the exchange rate, the NAFEX rate was adopted as the official exchange rate in May 2021, signaling a naira devaluation by 7.6%. The challenging macroeconomic landscape impacted the performance of the equities market, as the Nigerian Exchange Group All Share Index (NGX ASI) posted a negative return of -5.87% in H1 2021.
