Nigeria Economy | |
Nigeria Economy | |
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Monday, July 10, 2017 9:48
AM /FBNQuest Research
While every economy has regional
disparities in income and wealth, Nigeria’s are particularly striking.
The Access to Financial Services
2016 Survey shows the best ratio for the South West and the worst for the three
northern zones.
Only the South West meets the
official target of financial exclusion below 20% by 2020 with a ratio of 18% in
2016.
For the North East and the North
West, the rates were as high as 62% and 70%. Across the country the survey of
23,000 adults shows a rate of 41.6%.
The survey is the work of Enhancing
Financial Innovation and Access (EFInA) in conjunction with the National Bureau
of Statistics. It divides the financially served between the banked, those with
access to other formal services (10.3% of the total in 2016) and the balance
tapped into informal financing (9.8%). We had not thought that as many as 38.3%
of adults (of 18 years’ age and above) surveyed were banked.
This was the only positive finding
of the survey. Other than the South West all zones saw an increase in financial
exclusion between 2012 and 2016. This amounted to seven percentage points for
the North Central, six for the North West and two for the North East.
The share of informal financing
ranged from 4% in the South West to 14% in the North East, the North Central
and the South South. · Two other statistics we have
lifted from the EFInA survey are that 58.3% of adults were under the age of 35
and just 2% had access to insurance.
The deterioration in financial
exclusion over the period covers the economic slowdown in 2015 and the
recession in 2016. The unemployment rate rose steadily to 14.2% in Q4 2016.
All zones other than the South West
bore the footmarks of the Achilles heel of the economy. The slide in the oil
price has brought a fall in government revenues, employment and export
earnings, leading to a squeeze on incomes.
The response of the FGN, which we
can see in successive budgets and its Economic Recovery and Growth Plan, has
been to encourage the diversification of the economy and establish safety nets
for the poorest through its social interventions. Another route, albeit
sensitive, would be to revisit the basis for the monthly distributions from the
federation account.
Finally we should make the point
that public disorder and violent anti-government protests are likely to breed
where exclusion in all forms, including the financial variety, is widely felt.
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