Head of Research at Sterling Asset Management and Trustees Limited, Dr Patrick Ejumedia, has expressed confidence that Nigeria is transitioning from macroeconomic stabilisation to early recovery, saying improvements in key economic indicators point to a strengthening economy despite inflation remaining in double digits.
Speaking during an interview with ARISE NEWS on Friday, Ejumedia said improvements in key macroeconomic indicators point to an economy transitioning from stabilisation to early recovery despite inflation remaining in double digits.
On Nigeria’s macroeconomic outlook, he stated:
“Inflation is likely to remain in two digits towards the end of the year, but when we look at key macroeconomic indicators, we believe the economy is moving from stabilisation to early recovery.”
He said recent structural reforms, including the removal of the fuel subsidy and exchange rate liberalisation, are beginning to yield positive results, citing improvements in the exchange rate, trade, capital inflows, foreign reserves and the banking sector as evidence that the economy is on a recovery path.
“Less than five years into these reforms, we are already seeing improvements in exchange rates, trade, capital inflows and reserves. Nigeria recently recorded a 17-year high in foreign reserves of about $51 billion, while the banking sector is now better capitalised.”
On when Nigerians are likely to begin feeling the benefits of the reforms, Ejumedia said stronger economic growth would be required before macroeconomic gains translate into tangible improvements in living standards.
“The current growth rate of about 4% represents progress, but people will only begin to feel the impact when the economy grows at about 7% or even into double digits.”
Turning to the global economic environment, Ejumedia said easing inflation and lower interest rates in advanced economies could provide significant benefits for Nigeria.
“If global policymakers begin to cut interest rates, Nigeria will benefit through stronger capital inflows into equities, bonds and other financial instruments. It will also strengthen reserves, stabilise the exchange rate and reduce input costs.”
Addressing concerns that election-related spending could undermine recent economic gains, Ejumedia acknowledged the risks but stressed that the quality of government expenditure would determine its impact.
“The concern is not just spending itself, but how the money is spent. If it goes into infrastructure and productive sectors, it will support stronger economic growth.”
Looking ahead to the 2027 election cycle, he argued that Nigeria is entering the period from a stronger macroeconomic position than in previous election years.
“We have a more market-driven exchange rate, inflation is declining, and investor confidence has remained resilient. These are different from what we saw during previous election cycles.”
On attracting greater foreign investment, Ejumedia said sustaining ongoing reforms would be critical.
“Nigeria is well positioned to attract a larger share of global capital flows, but it depends on maintaining the reforms and preserving macroeconomic stability.”
Addressing concerns over oil price volatility, he said Nigeria remains relatively insulated as long as crude oil prices stay above the benchmark used in the national budget.
“If oil prices fall below the budget benchmark, Nigeria should focus on increasing oil production and raising domestic revenue to cushion the impact.”
Speaking on investment opportunities in the second half of the year, Ejumedia advised investors to consider sectors expected to benefit from stronger economic activity and infrastructure spending.
“The industrial, telecommunications and banking sectors remain attractive, while selective consumer goods, mutual funds and fixed-income instruments also offer investment opportunities depending on individual risk appetite.”
Concluding, Ejumedia said the government must prioritise food production and support vulnerable households to ensure that declining inflation translates into lower living costs for ordinary Nigerians.
“The only sustainable way to reduce food prices is to increase supply by addressing insecurity, improving agricultural mechanisation and providing targeted support for the most vulnerable.”
Goodness Anunobi
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