A recent report by Cordros Securities Limited forecasts an increase in Nigeria's foreign direct investments (FDI) in 2025, contingent upon the continuation of current economic reforms.
The report, titled "Nigeria in 2025, Reform to Recovery, Navigating the Rebound," highlights the potential for growth while cautioning against existing geopolitical tensions that could impede progress.
Analysts at Cordros Securities emphasize that "FPI inflows are set to increase, supported by attractive naira yields, global monetary policy easing, and improved FX market efficiency after the adoption of the Electronic Foreign Exchange Matching System (EFEMS)."
However, they warn that "existing geopolitical tensions remain a key risk to substantial inflows."
The report also notes the impact of President Bola Ahmed Tinubu's economic policies in 2024, particularly the removal of fuel subsidies and the floating of the naira.
These measures have led to a sharp rise in fuel prices, which soared to between N1,060 and N1,150 per litre from less than N234, and a depreciation of the naira, which increased to N1,532 per dollar from N470.
Consequently, the country's inflation rate reached 33.88% in October 2024. Despite these challenges, the report suggests that improved foreign exchange liquidity is anticipated, although the naira may continue to depreciate due to insufficient overall supply.
The analysis shows the delicate balance between reform-driven growth and external challenges facing Nigeria's economic future.
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