US interest rate cut may improve capital flows to Nigeria – Expert
Agency Report
Financial expert has said that the expected cut in United States interest rate could improve capital inflow into the Nigeria economy.
Making presentation during a forum organised by Finance Correspondents Association Nigeria on the Outlook for Nigerian Economy in 2025, the founder/CEO of Nairametric, Ugodre Obi-Chukwu, said higher interest rates is an incentive for local fixed income and equity securities, a boost to capital flows.
He said that large fiscal deficit continues suggest more exchange rate depreciation in near future, noting that high borrowing cost could become costly as debt repayments fall due to Nigeria’s is still heavily reliant on crude oil exports.
On the outlook for Gross Domestic Product, he said galloping inflation will continue to impact on real GDP growth outcome while weakening purchasing power will dampen consumption, impacting GDP growth, slow progress in meeting crude oil exports quota, impact on oil sector GDP.
He stated that urgency for food security may positively impact Agriculture sector boosting growth while removal of trade barriers is seen as boost to Trade sector GDP growth.
Expressing the need for a mandatory listing of companies executing major infrastructure projects in the country, he said such listing at the Nigerian Exchange would significantly enhance capital formation for critical infrastructure development and enable broader wealth distribution across the country.
He however said that when companies get listed on the NGX, it would help to unlock a new funding avenue for projects and provide opportunity for members of the public to invest and in the collective wealth.
Obi-Chukwu stated that the listing would ensure that Nigerians received dividends from these projects, enabling them to partake in the country’s economic growth.
He pointed out that executing large infrastructure projects with private companies without public involvement could result in a concentration of wealth among the a few, stressing that if these companies were listed on NGX, the wealth generated would be more distributed among Nigerians
