Rewane forecasts NGX market cap to achieve N262tn by 2026

Economist and Managing Director of Monetary Derivatives, Bismarck Rewane, has projected that the market capitalisation of the Nigerian Change Restricted will hit about N262tn in 2026 and transfer larger within the subsequent years, pushed by big-ticket listings.

Rewane mentioned this on Thursday on the annual Parthian Financial Discourse 2025 held in Ikoyi, Lagos.

The PidomNigeria experiences that the NGX market capitalisation and benchmark index on Thursday rose by 0.12 per cent to N91.107tn and 143,239.23 factors, respectively. That is the second day of constructive buying and selling this week.

Talking on the occasion, Rewane projected that the market cap will rise additional to N393tn as of the total yr 2027 and N590tn by 2028.

“At the moment, we shall be discussing Nigeria’s multidimensional world economic system, key indicators, financial construction, world tendencies, and what we must be being attentive to. We’ll deal with 5 important indicators, beginning with the inventory market. Inventory market capitalisation at the moment is round N90–91tn. Our projection is that it’ll attain N262tn. What may drive such a motion from about 20 per cent of GDP to roughly 80 per cent of GDP? New listings, improved earnings, and elevated efficiencies.

The Dangote Refinery alone, valued at roughly $32bn, may considerably alter the image when its earnings are factored in. NNPC can be anticipated to checklist. These variables will drive efficiency.

“Nigeria’s GDP is now estimated at $250bn after revision. The aspiration is $1tn by 2030. We don’t assume that’s sensible, however sure changes will drive efficiency. The inventory market is a serious supply of financial savings, capital elevating, and a mirrored image of company efficiency.

It ought to make us optimistic.”

Because it pertains to the Financial Coverage Fee, the FDC boss mentioned, “Rate of interest outlook. Rates of interest can’t be separated from inflation and cash provide. The CBN shocked many by conserving charges unchanged just lately, partly as a result of issues round unstable inflation. Unstable inflation, worry of rising costs, is extra influential than historic inflation. A day after Nigeria held charges regular, Ghana minimize theirs sharply. Ghana’s economic system, pushed closely by gold, is benefiting from rising gold costs. Nigeria is pushed by oil, whose value outlook is weaker, which explains the divergence. We count on rates of interest in Nigeria to say no, although not as sharply as Ghana’s. Political threat additionally differs between the nations.

“The inflation outlook for 2026 is round 12.7 per cent, rising to fifteen.3 per cent in 2027, earlier than easing once more (13.8 per cent in 2028). That is influenced by cash provide progress, petrol and diesel value expectations, meals inflation as a result of insecurity, and change charge pressures. We mission the change charge round N1,450–N1,500 with some luck. Exterior reserves have to be seen within the context of debt. The current rise in reserves was as a result of Eurobond issuance.”

Rewane, who additionally referred to as for the creation of a working economic system for Nigerians, famous that remittances stay an enormous deal. “Minimal wage will increase overseas and labour market shifts can affect diaspora inflows. AI-driven displacement impacts immigrants first, so we have to construct an economic system that works for Nigerians right here. Whole issue productiveness is one other main variable. Potential GDP vs actual GDP issues. Capital inventory progress of 5 per cent is important, and investor confidence is enhancing; overseas or native, buyers care solely about returns.

“Nigeria’s economic system at the moment is $250bn. Web exports are $24bn and drive each different issue. Authorities expenditure’s dominance issues greater than the quantum. Funding is $64bn, and Dangote Refinery alone contributes almost half of that. This shapes total-factor productiveness. Even with 4 per cent progress, attending to a $1tn economic system is unrealistic. However we should intention excessive to land among the many stars.”

In his feedback on the occasion, the Group Managing Director/Chief Government Officer, Oluseye Olusoga, highlighted the necessity to cease taking a look at Nigeria in a silo.

“We have to have a look at Africa as a continent and see Nigeria as half of a bigger African market. Nigeria is main on AfCFTA, and that’s one thing all of us must make the most of. We’ve seen loads of public sector engagement, however virtually nothing from the personal sector. If you go to locations like Lomé or the Benin Republic, you’ll discover that they frequently make the most of AfCFTA from an industrialisation perspective. If we’re not cautious, we’ll find yourself transferring wealth to different African areas as a result of they see Nigeria as an enormous market, they will effortlessly entry.

“From a banking perspective, all of us must recognise that the world is altering. Nigeria has a job to play; if we don’t play it, nature abhors a vacuum, and others will take benefit. The federal government has made vital reforms during the last 18 months, lots of them constructive, and the economic system has stabilised. Nonetheless, what confronts us now’s safety, and funding solely follows safety. With out safety, funding is not going to come. I problem everybody right here to make the most of the place we’re. Safety just isn’t solely the job of the federal government; it’s additionally our collective accountability. The theme at the moment is apt. A part of the safety problem is that many individuals don’t really feel they’re prospering. Let’s take into consideration our neighbours, about how we will present jobs, and about how we will elevate each other up. The banking sector should assist that progress and assist construct new companies and industries to create jobs for Nigeria’s rising youth. That may also assist cut back safety points,” he mentioned.

The Chairman of the Presidential Fiscal Coverage and Tax Reforms Committee, Taiwo Oyedele, in his feedback on a panel session, reiterated the advantages of the tax reforms championed by his committee for susceptible Nigerians.

Key measures that Oyedele highlighted embrace the reform that permits buyers to say FX losses on capital features, exemptions for features under N150m yearly, resetting features for reinvested funds, and eliminating taxes on bonus shares and share transfers. Starting subsequent yr, company tax charges will drop from 30 per cent to 25 per cent, small companies beneath N100m turnover pays zero per cent company tax, and 98 per cent of staff will see reductions or removing of their PAYE tax. Important objects corresponding to meals, training, well being, lease, and transportation will shift to zero per cent VAT with full enter credit score, considerably decreasing shopper prices.

He maintained that the reforms intention to spice up disposable earnings for 90 per cent of Nigerians, improve market stability, entice long-term capital, and reverse the exit of overseas buyers that contributed to FX pressures.

“As a part of the broader reform, beginning January subsequent yr, corporations will see their company tax charge decreased from 30 per cent to 25 per cent. Wherever else on the earth, that will be headline information that excites the market. In Nigeria, it barely strikes sentiment. But that discount is price N1.5tn based mostly on 2024 collections. One other main change: from subsequent yr, corporations will be capable to declare enter VAT credit on their belongings, companies, and overheads. Service corporations have by no means had this earlier than. That’s price N3.4tn based mostly on 2024 figures, additionally excellent news.

“We must be enthusiastic about these reforms. We’ve taken away withholding tax on bonus shares, eliminated stamp obligation on share transfers, and eradicated minimal tax on turnover and capital for companies. These are reforms the capital market has demanded for many years. On PAYE: 98 per cent of staff within the personal and public sectors will both see a discount or full removing of their PAYE from subsequent yr. The highest 2 per cent, principally the individuals on this room, will see a slight improve relying on earnings degree. When you earn N2m or N3m a month, you gained’t really feel the distinction. You solely hit the 25 per cent prime charge if you earn round N20m a month. And if you happen to earn N2m or extra month-to-month, you might be already within the prime two per cent in Nigeria.”

Utilizing the instance of a loaf of bread, Oyedele mentioned, “At the moment it’s VAT-exempt, that means bakers don’t cost VAT however nonetheless bear VAT on enter gear, distribution, cellphone payments, and even sugar. They embed that VAT into the value. From subsequent yr, bread shall be zero-rated. Meaning bakers cost zero per cent VAT and get well all VAT paid on inputs. That’s an enormous deal. We’ve carried out the identical for training. From subsequent yr, faculties shall be zero-rated, permitting them to say all enter VAT.”

In the meantime, the chairperson of the African Finance Company, Mrs Ireti Samuel-Ogbu, referred to as for security nets for susceptible Nigerians because the reforms acquire traction.

“Typically, the macroeconomic reforms have been unbelievable. Now we have seen GDP improve, and now we have seen the present account improve. Now we have seen the FX charge stabilise, and the distinction between the parallel charges and the official charges has actually narrowed right down to about 15 per cent. Now we have seen inflation come down; now we have seen FX reserves improve tenfold. All over the place you look, there have been incredible reforms, however I feel the most important situation at the moment, as we’re speaking about reforms which are inclusive, is that these reforms have crystallised into 61 per cent of our inhabitants being declared multidimensionally poor.

“That’s numerous individuals who can’t take part within the economic system. They aren’t solely poor, however they’re additionally financially excluded. These are the people who find themselves extra prone to be impacted by the meals inflation. We can’t discuss reforms and inclusion with out speaking in regards to the security internet as a result of it means half of the inhabitants can’t take part.”

The Managing Director of Parthian Pensions, Mr Olufemi Odukoya, spoke on the most recent reforms launched by the Nationwide Pension Fee and their affect on infrastructure funding.

He mentioned, “The reforms launched by the DG (of PenCom) communicate on to infrastructure. It was elevated throughout all of the funds from 10 per cent of your portfolio to 21 per cent. That tells you the affect. It was additionally included for personal equities.”