In its Economic Review and Outlook for 2024 themed “Navigating the Tides,” FSL Securities Limited has projected a surge in bond activities for the year, attributing this expectation to the Federal Government’s endeavor to address the substantial N9.18 trillion budget deficit.
Victor Chiazor, Head of Research and Investment at FSL Securities, emphasized the necessity for private sector engagement in the bond market to fund the budget deficit. He anticipated sustained activity in the bond market throughout the year, anticipating increased fundraising efforts to bridge the deficit gap.
Chiazor also highlighted a potential shift in state bond dynamics, noting a decline in appetite but foreseeing states with robust revenues tapping into the bond market, especially considering ongoing infrastructure projects financed by state bonds.
Commenting on the broader economic landscape, Chiazor underscored challenges facing the federal government in managing elevated debt levels, particularly concerning the high debt-to-service ratio. He predicted a modest outlook for the equities market, suggesting that domestic players would drive market activity, while foreign investor interest might remain subdued.
Furthermore, Chiazor anticipated a nuanced monetary policy approach, with the Central Bank of Nigeria (CBN) likely to maintain a dovish stance. He suggested that monetary policy decisions would hinge on evolving economic conditions, indicating a cautious approach towards expansionary or contractionary measures based on prevailing circumstances.
As the fiscal authority’s visibility improves, 2024 promises to be a year marked by close monitoring of economic indicators, with monetary policy adjustments tailored to navigate uncertainties and support sustainable economic growth.