The audacity of hopes that the global economy will continue to gravitate towards a sustainable growth path after the inimical impact of the lockdown across the globe consequent on the Covid 19 pandemic was dashed. With 2020 came the act of God; the pandemic which threatened human existence and caused ripple effects the world is still trying to recover from. Then came the act of man; the Russian -Ukraine crises which has further complicated issues and caused a negative surprise to growth forecast.
With advent of the crises between Russia and Ukraine and the sanctions and counter sanctions that followed it. There are insinuations of a possible global recession as supply disruption, rising commodity prices especially energy prices and rising inflation continue to steer upwards. We expect with deep certitude that global growth rates will tank.
Although, the Nigerian economy was expected to gain from the rising crude oil prices, the country benefited little from the windfall as the gains from the increase in oil prices were gulped by the payment of heavy subsidy bill which moved in tandem with the oil price increase. With dwindling net proceeds to the government, rising inflation, and the bleak outlook of the global economy and the myriads of security challenges bedeviling the country. The outlook for H2 2022 is a bit gloomy.
Amid the unsavory happening in H1 2022, the Nigerian equities market was the best performed amongst other markets covered in this report. As noted in the report that the low interest environment is a major driver of the market, the hike in the policy rate by the CBN would most likely have a negative impact on the market. However, if inflation continue to rise and interest rate do not keep up with the rise in inflation, the market is expected to post a positive return in H2 2022.