Mr. Abiodun Adebimpe, President of the Association of Asset Custodians of Nigeria (AACN), provides an in-depth analysis of Nigeria’s economic landscape, highlighting the challenges and opportunities ahead, while also offering insights into AACN’s forthcoming annual conference.
Challenges in Nigeria’s Economic Environment In a candid reflection, Adebimpe acknowledges the tough realities faced by the Nigerian economy. He points to soaring inflation, rising food prices, high import dependence, a weakened Naira, unemployment, and infrastructural deficits as major issues. “The outlook may seem grim,” he states, “but these are the results of cumulative economic mismanagement over the last decade, compounded by global shocks such as the Russia-Ukraine war.”
He believes that the social unrest witnessed, like the #EndBadGovernance protests, serves as a warning. “A youthful nation like ours cannot afford prolonged unemployment without risking peace and stability,” Adebimpe warns.
Reasons for Optimism Despite the hurdles, Adebimpe remains cautiously optimistic. He acknowledges that the current administration is introducing bold economic reforms, particularly in fiscal and monetary policies. “These reforms are expected to eventually benefit the population,” he says, though he emphasizes that Nigeria remains a long way from establishing a fully market-friendly environment.
“While the country is still heavily reliant on government intervention, we are seeing an effort to shift toward allowing market forces more influence,” he adds.
Impact of Reforms and the Role of FX Markets The unification of Nigeria’s foreign exchange markets and the removal of fuel subsidies have been some of the most controversial reforms. Adebimpe comments that while these steps are crucial for stabilizing the economy, they have so far produced mixed results. “The removal of fuel subsidies, while intended to foster competition, has resulted in skyrocketing fuel prices, significantly impacting the average Nigerian,” he notes, expressing hope that the situation will stabilize once the Dangote Refinery becomes fully operational.
On the issue of the Naira, Adebimpe explains that its struggles stem largely from Nigeria’s dependence on crude oil exports. “With over 90 percent of foreign exchange earnings coming from oil, the instability in global oil markets has directly impacted the Naira’s value,” he states.
Evolving Digital Currency Landscape Adebimpe also touched on Nigeria’s digital currency efforts, particularly the introduction of the e-Naira. While he describes its launch as a groundbreaking move, he notes that recent challenges, including issues surrounding Binance, have complicated the country’s digital currency landscape.
“The cryptocurrency market is here to stay,” Adebimpe remarks, acknowledging the increasing role digital assets play in the global financial ecosystem.
AACN’s Contributions and 2024 Annual Conference Looking ahead to AACN’s 2024 Investors Conference, set to take place in London, Adebimpe highlights the association’s commitment to promoting Nigeria as a leading investment destination. “We aim to showcase the Nigerian capital market’s role in economic development and its potential for growth despite global challenges,” he says.
Themed “Nigeria: Open to the World,” the conference will feature high-profile speakers, including the CBN Deputy Governor, Economic Policy, Mr. Mohammed Abdullahi, who will deliver a keynote address on Nigeria’s monetary policies and their impact on attracting foreign investments.
Adebimpe concludes with a forward-looking message: “Despite the challenges, Nigeria remains a strong case for investment. With strategic reforms and a focus on growth sectors like agriculture and technology, we can unlock the country’s full economic potential.”
