Guaranty Trust Holding Company Plc (GTCO), has predicted significant improvement in Nigeria’s business environment regardless of the current economic realities.
In its Macroeconomic and Banking Sector report for the year 2022, GTCO stated that the improvement would be supported by admirable foreign exchange (Forex) liquidity.
“In the light of the gradual improvement in vaccination rates, a better understanding and management of the pandemic, strong oil prices, and positive GDP growth albeit on the back of a lower base, the business environment made an impressive recovery from the weak pandemic-induced performance of 2020.
“We expect significant improvements in the business environment going into 2022 supported by improved FX liquidity as a result of strong reserves, favourable oil prices, and strong production levels with minimal disruption challenges,” the report read partly.
GTCO, however, disclosed that the Central Bank of Nigeria (CBN) “would need strong reserves and sustained high oil prices to improve the forex liquidity in the market in order to meet domestic demand as well as the demands of FPIs seeking to repatriate funds from the country.”
The financial institution, therefore, expected “the CBN to continue to defend the naira with more frequent interventions in the I&E window.
“Overall, the regulatory authorities will maintain its hold on the market as it continues to monitor activities in the market and will be quick to implement policies to mitigate the developments that might negatively affect its plan for a stable naira.”
Meanwhile, the International Monetary Fund (IMF) had stated that Nigeria needs to raise revenue to gross domestic product (GDP) ratio to about 15% from 7.5% in the next three years to consolidate its fiscal position.
