[Interview] Korede Ologun, Head, Research & Advisory, Helix Securities, Nigeria
Korede Ologun of Helix Securities Limited interviews with Africa Business Communities on past and present economic situation in Nigeria:
Please introduce Helix Securities and its operations.
Helix Securities Limited (HSL) is a specialized Investment Company in the business of Securities Trading (equities and fixed income), Portfolio Management, and Financial Advisory. HSL is a dealing member of the Nigerian Stock Exchange (NSE) and registered by the Securities & Exchange Commission (SEC) as a broker. The Company is registered as a trading Institution with the FMDQ OTC Plc.
HSL’s services are built on a robust Information Technology platform which integrates the various business units in a customer friendly manner to meet the needs of clients/prospective clients and other stakeholders. The company relies on its well-trained, qualified and knowledgeable personnel to create value for discerning clients/prospective clients.
We currently operate in Nigeria and in the financial services industry and advise clients in several other sectors related to investments.
What can you say about the targets, plans and ambitions of Helix Securities for 2017?
The year 2016 was a promising year that delivered very little in the end. Therefore, it is ideal to have a cautious outlook for 2017 based on current economic trend.
HSL has plans to expand its product offerings in the financial services industry in order to capture the full spectrum of potential investors in the market. The Company will be looking at opportunities at the federal and state government levels with key interests in creating more liquidity in the capital market and maximizing returns for investors.
How would you assess Nigeria’s economic performance in 2016 overall?
The year 2016 was a tough year for Nigeria and the capital market as the country slipped deeper into recession (GDP annual rate of -2.24% in third quarter) thereby creating a cash squeeze which meant that only firms with good access to credit market were able to achieve smooth production and employment.
Interest rate was benchmarked at 14% for most of the year while inflation and exchange rate rose to all time high of 18.55% and N305.24/1USD (about N498/1USD parallel market rate) respectively in an FX regime lacking discipline and elasticity at a time when the government wasn’t earning as much forex.
Nigeria scored poorly in terms of economic performance owing to disruptions in revenue-heads needed for operations resulting in increased budget deficit and failure with policies relevant for economic growth and development.2016 was a complicated year for the Nigerian Economy.
What can be done differently this year?
The Nigerian government took a different route to governance by focusing on reducing corruption and improving accountability of public funds.
Institutions are needed to help consolidate the efforts of government especially in a case where the standards might be low and prone to delinquencies. Nigeria needs to establish Institutions that will put the country on auto-run no matter what political parties take power.
The full drive to diversify the economy is commendable although there is need to consider areas of trade relations. Understanding that the country cannot produce all it consumes, Nigeria should focus on areas of strength and create trade partnerships in others.
Nigeria should seek coherence between its monetary and fiscal policies in order to reap the benefits of budget deficits, keep inflation within investible limits and drive the economy towards durable recovery.
Which African countries do you predict will perform best in 2017?
Technology remains a key driver for inclusive growth. Most African countries have embraced the revolutionizing capabilities of technology in the last decade. However, countries fastest with adoption of technological advancement opportunities in areas such as financial services, agriculture, mining and security have continued to lead in terms of performance.
Kenya, the tech hub of Africa should continue its growth trend averaging 5.7% GDP growth in 2017 owing to a successful election in August and increased private sector credit growth supported by sound fiscal policies.
Nigeria, the most populous African nation with the largest economy in Africa is on the path towards economic recovery after a period of rocking recession. Economic activities are expected to improve on the back of expansionary policies and huge capital expenditure plans.
Egypt, with the third largest economy in Africa is capable of surpassing its 2016 performance as it continues to forge ahead with its reform-oriented agenda.