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Morgan Stanley: Tinubu’s policies may create new consumers class

The current president of Nigeria, Bola Tinubu, has implemented reforms that, despite their challenges to economic growth, could result in a significant increase in yearly income, according to Steven Quattry an analyst at the global investment bank Morgan Stanley.

Steven Quattry, in a post titled ‘Market Outlook: Nigeria’s New Dawn’ published on the bank’s website on Wednesday, noted that Nigeria is perhaps the largest country that investors know the least about. With a young population and a new reform-minded president, Nigeria could be poised for a substantial uptick in economic growth if the administration can deliver on its proposed economic reforms.

Quattry highlighted the swift response of the present administration to the economic situation in Nigeria. He stated that “Prior to the May 2023 election of new president Bola Tinubu, two sets of policies had inhibited the country’s growth. The first was fuel subsidies, which cost a whopping $10 billion in 2022 and primarily benefited middle- and high-income members of the population: Only 3% of all subsidized fuel was consumed by the poorest 40% of Nigerians”. “The second was a complex currency regime, which led to an overvalued currency and curbed much-needed foreign investment, as foreign direct investment fell by 60% under Buhari.”

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“In response to the economic challenges, Tinubu has acted quickly to revive growth”. “During his inaugural address, he declared an end to fuel subsidies. Days later, he put an end to the overvalued currency by unifying the exchange rates”. “The incoming administration intends to grow the economy primarily via private investment and is aiming for 6% real GDP growth per year”. “This could lead to a strong rise in incomes, which, combined with a young and fast-growing population, could usher in a new consumer class and a number of investment opportunities.”

Steven Quattry further stated that mobile banking and consumer segments are two sectors that could interest investors following the ongoing reforms of the current Nigerian president. According to him, the telecommunications sector offers a unique opportunity due to the country’s low mobile data penetration and usage levels. There is also an opportunity for providers of telecommunications-led mobile-money services, which are still in the early stages of growth as Nigeria is yet to catch up with the high levels recorded in Senegal, Ghana and Kenya.


In the area of consumer segments, he noted that there will likely be a rise in investable opportunities as a rise in GDP per capita will provide households with sufficient income for essential needs and more discretionary purchases. He predicted that with a significant rise in GDP per capita, “Nigeria could help the consumer goods market grow 150% from an estimated $240 billion in 2023 to about $603 billion in 2030.

According to him, In the next two to three years, once the current administration has succeeded in reversing the harmful policies and economic malaise of the past eight years, Nigeria could witness a sharp upturn in economic growth. This is likely to present investors with opportunities in local equity markets, especially in the telecom, consumer goods and durables sectors. In the long term, the new administration’s challenge will be devising sound policies in education and training to unleash Nigeria’s human capital potential, perhaps its greatest asset. Tinubu and his team of technocrats have a unique opportunity to introduce policies to free up the economy and attract foreign investors looking for sustained growth.

Covenant Umoru

Covenant is a multi- media Journalist with over 4 years experience. More »

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