The Chief Executive Officer of Corporate Finance Group (CFG) Advisory, Adetilewa Adebajo, said the foreign exchange (FX) crisis would continue with naira likely going to close the year at between N1,500 and N1,800 to a dollar, bringing the forecast midpoint to N1650/$.
He urged Nigerians to prepare for an 18 months economic recovery period that will be accompanied by a high-interest rate regime and a continued FX scarcity at the Nigerian Autonomous Foreign Exchange Market (NFEM) “with succour from the parallel market”.
He said it was important to constantly hedge to preserve value by moving excess liquidity and profits into assets that retain value.
According to him, Nigeria’s debt levels are now clearly unsustainable with the debt burden of $130 billion being serviced by 95 per cent of revenue with debt servicing now exceeding both recurrent and capital expenditure.
On the group’s business projections, he gave a benchmark recommendation for business operations to ensure 2024 year-end value retention on N/$ to be between 1,500 and 1,800, depending on the sector of the economy.
He added that the $10 billion from the 2024 budget deficit raises questions on whether Nigeria is heading in the default direction of Ghana, Zambia and Ethiopia.
Adebajo advised that there should be a discussion on restructuring both domestic and external debt straightaway alongside the ongoing economic reforms to avoid Paris and London club imposition.
However, he said the fundamentals of the economy remain sound, adding that poor economic leadership is what is lacking to realise potential and grow the economy.
According to him, expectations are high with a new and highly-rated economic management team in place.
