money trends


The beginning of every year presents businesses with an opportunity to take stock, restrategize, set ambitious new targets and map out plans to achieve those targets.


As with every other year, the year 2023 has been welcome with great hope and expectations. Following what was a challenging year 2022 for various businesses and economies around the world, many are hopeful that 2023 would be the year that they would recover lost ground and rediscover their growth trajectories.


Being an election year, 2023 presents unique challenges and opportunities for businesses operating within Nigeria. To help businesses in the country, especially SMEs, to adequately plan for the new year and identify and harness the opportunities that it presents, Wema Bank PLC has sampled the opinions of leading experts across different industries and specializations to get their views and outlook for 2023. Those interviewed are Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC; Oluwatosin Olaseinde, founder, Money Africa, and co-founder, Ladda; Gospel Obele, founder, Streetnomics; and Ladi Asuni, a technology consultant.




Q1 : What is the overall outlook for the Nigerian economy in 2023 and what effects are the upcoming presidential and state elections in Nigeria likely going to have on the economy?

Gospel Obele: The outlook for the Nigerian economy is largely mixed. There are so many uncertainties this year. Elections are going to take the bulk of Q1, transitions are going to take the bulk of Q2 and understanding and having a clear direction around the policy direction of the new president will take the bulk of Q3 and maybe Q4. These plus all the other global narratives such as the looming recession and the cost-of-living crisis have made it a very uncertain year. On the flip side, it is also a year that requires us to position and take advantage of new opportunities that are emerging. I wouldn’t say that it is downtime year, I would say that it is a year mixed with uncertainties and the rise of opportunities hinged around change in leadership.

Q2: Inflation was a major talking point in 2022, with the Government rolling out several policies in the past year to curb inflation. Do you expect these policies to finally kick in and help to reduce the inflation rate in the country in 2023?

Gospel Obele: Policies usually have an effect on the economy either immediately or over time. The conversation around whether the government and the Central Bank of Nigeria’s recent policies will have an impact on inflation is still a developing story. We also must take into context other international factors like the Russia-Ukraine War, the climate change narrative, the post-COVID-19 narrative and how all these things have impacted on food and energy prices. To a large extent, these are the major pressure points through which the cost-of-living crisis hits heavily globally and on the Nigerian economy. At best, the policies that have been introduced by the government have been largely reactionary and monetary, but the construct of this inflation is not monetary. So, we are expecting and watching to see if the policies will have an impact on inflation. But I don’t see them having that significant impact on inflation in the mid to long term.

Q3: The naira plunged to record lows against major global currencies, especially the US dollar, in 2022. Should we expect a rebound of the naira or should we expect it to plunge further in 2023?

Gospel Obele: I envisage a further worsening of the exchange rate, because there are a lot of factors that are strongly informing and reinforcing the exchange rate of the naira to the dollar. The major factor is that we are not a primary productive economy. Many may argue that the naira exchange rate has more to do with international events than local events, but I think that it is a mix of both. The strength of the currency and its ability to withstand internal and external pressures is a function of how strong the economy is and how competitive the goods and services produced by the country are in regional and global markets. On these counts we have technically not done so well. Structurally, we are not productive. Being a consumption-driven and reactionary economy, the naira will still be at the mercy of international currencies, especially the US dollar. Let us also take into cognizance that the fact that the Federal Reserve Bank of the United States is doing everything it can to strengthen the position of the dollar in comparison to other currencies.

Q4: What industries do you predict will witness the highest growth in 2023 and how can SMEs in these industries tap into the opportunities?

Gospel Obele: To a large extent, I think that technology will rise on new fronts and more industries will see newer expressions of technology. The cost of doing business is fueling the need for Nigerian SMEs to rethink how they model their business and how they execute propositions. As a result, a lot of businesses will go techier and more digital. Another major industry that I see picking up this year is food and agriculture. Despite threats like flooding and the Russia-Ukraine War, this will be a high-growth industry. However, SMEs in food and agriculture need to play differently to go against the headwinds of inflationary pressure. Thirdly, I think real estate will pick up during the year. Many Nigerians in diaspora will be seeking to bring investments home and lock down these investments in appreciating assets. Another industry is logistics and mobility, primarily spurred by the new infrastructure that is being introduced in Lagos, Abuja and the like, and SMEs should leverage these to scale. There are a couple of other sectors as well, such as media and communication (because of the strong push of digital and social media) and, to a lesser extent, manufacturing.


Q1: 2022 was a difficult year for stock markets around the world, with tech stocks being the most affected. Are tech stocks still good investment options? Do you foresee a resurgence in global tech stock prices in 2023 after the crash of 2022?

Oluwatosin Olaseinde: Anyone investing in stocks needs to have a long-term view of at least a decade and have a balanced portfolio beyond tech stocks. If the above conditions are met, then one can always invest in tech stocks with good fundamentals. It’s a bit hard to forecast how global stocks will perform this year. One of two scenarios could play out: a mildly positive performance year or a year as rough as 2022.

Q2: What investment instruments are likely going to yield the highest returns in 2023? In other words, where should people invest for the best returns in 2023?

Oluwatosin Olaseinde: It is near impossible to forecast what investments will give great returns this year, with economic growth expected to slow down. Last year, cash was the best performing asset globally. Anyone investing should have a balanced portfolio split across low-, medium-, and high-risk investments. I would tilt more towards low-risk investments such as cash and savings and medium-risk investments like money market funds for the first quarter of the year.

Q3: Are there little-known investment options and instruments that Nigerians can invest in to realize good returns and guard against soaring inflation in 2023?

Oluwatosin Olaseinde: If you’re taking inflation from a domestic perspective, there’s barely anything that would beat inflation of over 20%. The prudent option for those with a long-term term view would be to pursue low-risk dollar options. In the mid to long term, inflation should fall back to the 12% to 15% mark. The closest options in this case would be either money market mutual funds or high-yield savings. One can begin investing in those with as little as N5000. For those with an investment horizon of a year or less, the above also applies. Stick to Naira options such as money market funds and high-yield savings.






Q1: 2022 was a difficult year for many tech businesses in Nigeria and around the world. Do you see tech companies and investors’ confidence in tech companies rebounding in 2023?

Ladi Asuni: According to “Africa: The Big Deal” report which tracks tech investments across the continent, Nigeria recorded a USD1.2bn investment in 2022 compared to the record $1.7bn the prior year (2021). While there seems to be a decline (30%) in the deal value from prior year, looking at the actual number of deals which was about 286 shows a 15% growth in transactions from the prior year with two Fintechs recording mega deals over $100m – i.e., Flutterwave ($250m Series D) and Interswitch ($110m). Despite the decrease in investments for Nigeria, the overall performance of the continent for the year 2022 suggests a moderately sustained growth of about 5% from 2021 which may be sustained into 2023. There is no doubt that there is still some interest in the African market.  However, there is need for cautious optimism and a more moderate growth outlook than we have seen in the years prior to 2022 as the struggling global economy continues to take its toll on Startup funding across the globe. Nigeria remains a preferred destination for startup funding amongst other destinations like Kenya, Egypt, and South Africa who each accounted for total investment value exceeding $500m.

Q2: What tech trends and innovations do you see emerging or gaining ground in 2023?

Ladi Asuni: Developments in Artificial Intelligence is arguably the biggest technology trend of 2022 which is expected to carry through to 2023 in terms of application and full-scale commercial deployment. With ChatGPT 3 – by OpenAI – setting a new record when more than 1 million users enrolled within the first 5 days of it being made available to the public. Similarly, we are seeing AI adoption in the image generation space with the likes of Dalle-2, Stable Diffusion and MidJourney being adopted and used at scale. The use cases for AI adoption are enormous and we can expect to see more AI- driven automation integrated into day-to-day technologies, interactions, and general utilisation for solving problems in different industries. Some interesting use cases in financial services include, financial advisory, customer services, sales support etc. The massive and rapid adoption of these AI tools will definitely be a game changer. Other technology trends we can expect may include greater adoption of smart phones and devices leveraging Internet of Things (IoT) to get increasingly integrated into regular consumer electronics (TVs, Refrigerators), vehicles and other day-to-day lifestyle technologies. 5G adoption is also expected to scale. The confluence of all these emerging technologies will birth new technology adaptations as innovators apply them to solving problems at scale.


Q1: Many SMEs in Nigeria have been complaining of multiple forms of taxation at the federal, state, and local levels of the government. Do you foresee a continuation of the government’s aggressive approach to taxation as it strives to meet its revenue target in 2023, especially with an expected change in administration?

Taiwo Oyedele: Nigeria’s multiple taxation issue is an age-long problem. Unfortunately, every successive administration in the past decades talks about it but does nothing or even ends up adding more to the problem by enacting additional earmark taxes. While the foundation of the problem can be traced to the fiscal federalism structure as contained in the Constitution, the practical manifestation is attributable to the poor fiscal leadership and revenue mismanagement by the country’s leaders. Evidence has shown that introducing more taxes does not necessarily result in higher tax revenue collection but rather it creates excessive burden on taxpayers, dampens tax morale and fuels tax corruption. My expectation is that Nigeria will begin to make a turnaround in 2023 with the new government such that various multiple taxes are repealed and the government concentrates on a few, broad-based, easy-to-administer taxes with commensurate fiscal exchange provided for taxpayers. Also, the next government needs to harmonize revenue collection agencies and restrict the revenue administration function to one agency per level of government.

Q2: What can the government do differently in 2023 and beyond to meet its tax target without jeopardizing the growth of SMEs in the country?

Taiwo Oyedele: Government must introduce business- and growth-friendly policies that reduce over-regulation, excessive bureaucracy, and manual tax administration. If SMEs are allowed to grow, they will create more employment and contribute to economic growth which in turn leads to a wider tax net and broader tax base. Also, technology should be deployed to simplify tax compliance and link all economic activities to a central identity system to track and punish tax evaders.




Chinedu Nnawetanma.

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