Nigeria’s recent economic reforms have revitalized investor confidence, driving a strong rally in naira-denominated assets such as stocks and Eurobonds.
Simultaneously, sovereign risk spreads have declined to their lowest levels since the COVID-19 pandemic, reflecting improved market sentiment.
However, economic experts warn that external risks could undermine these gains if not properly managed.
The boost in investor sentiment was highlighted by Lamido Abubakar Yuguda in his personal statement following the 299th meeting of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC).
According to Yuguda, the country’s recent policy changes, particularly in the foreign exchange market and fiscal discipline, have contributed significantly to this bullish outlook.
“The recent reforms have generated confidence that is engendering bullishness in naira-denominated assets, with stocks and Eurobonds rallying and yields declining.
Among them are escalating geopolitical tensions in Europe and the Middle East, as well as the emerging trade dispute between the United States and its key trading partners.
“There are, however, certain key external risk factors to the growth outlook. These include the geopolitical developments in Europe and the Middle East and the impact of the emerging international trade dispute between the US and its key trading partners,” he explained.