Access Pensions Limited has projected that the high interest rate regime that characterised the investment climate in the second half of last year will persist into 2023.
The company highlighted post-election crises and the collapse of commodity prices as key risks shaping the investment and economic landscape this year.
Factors Shaping the Investment Climate
According to the company, the investment landscape in 2023 will be influenced by several key factors:
- Global Interest Rate Policy – Global central banks are expected to pull the plug on the interest rate tightening cycle throughout 2023.
- Oil Prices – Oil prices are likely to recede from conflict-supported levels towards an average of $70-80 per barrel.
- Nigeria’s Oil Production – Oil output in Nigeria is projected to recover to 1.5-1.7 million barrels per day (mbpd), up from below 1 mbpd in 2022, supported by improvements in pipeline security.
- Leadership and Economic Policy – Changes in political leadership following the 2023 elections are expected to allow for inflationary adjustments to petrol prices and exchange rate policies.
- Fiscal Deficit and Borrowing – A large fiscal deficit will necessitate higher domestic borrowings, without reliance on Ways & Means financing from the Central Bank of Nigeria (CBN).
