Nigeria's GDP rebasing to boost economic outlook

In a recent CNBC Africa interview, Felicia Awolope, a senior Investment Research Analyst and Lead Macros Desk at Meristem Research, discussed the potential impact of Nigeria's GDP rebasing exercise on the country's economic outlook for 2025. Meristem analysts expect the rebasing exercise to have significant potential for Nigeria this year, with key sectors likely seeing an upward adjustment in their contributions to the economy. This positive outlook is expected to attract more investors to the Nigerian equities market. Felicia highlighted several key points during the interview, shedding light on the global economic landscape and offering insights into the future of Nigeria's oil production, financial services sector, and equities market. She also discussed the potential implications of Donald Trump's policies on the global economy and key sectors. Addressing the impact of Trump's policies on global trade, Felicia noted the possibility of increased tariffs that could hamper exports to the US, particularly for countries like China, Mexico, and Canada. This could potentially lead to a slowdown in global trade dynamics. On the other hand, Trump's focus on expansionary fiscal policies and energy production may result in lower taxes, higher disposable income, and increased consumption in the US, potentially contributing to a slight uptick in inflation. Regarding Nigeria's economic outlook for 2025, Meristem analysts expect a slight improvement in oil production, driven by enhanced security measures and fiscal policies aimed at attracting investments in the oil and gas sector. The financial services sector is also anticipated to continue being a key driver of GDP growth, with companies expanding into new markets and diversifying revenue streams. Overall, Meristem projects economic growth to hover around 3.82% for the full year. In the equities market, Meristem anticipates improved investor sentiment driven by stabilizing macroeconomic indicators and a more stable exchange rate regime. These factors could boost corporate earnings for companies facing challenges due to foreign exchange depreciation. Despite concerns around sector-specific sensitivities and inflation, the outlook for the Nigerian equities market appears positive, according to Felicia. In conclusion, Felicia emphasized the importance of monitoring key economic indicators and policy developments, both locally and globally, to navigate uncertainties and make informed investment decisions. The expected improvements in oil production, financial services performance, and equities market sentiment bode well for Nigeria's economic prospects in 2025.