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6th CIBN National Economic Outlook Forum Calls For Diversification of Revenue Base

Nigeria Economy	1576 VIEWS
Nigeria Economy
1576 VIEWS

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Friday, January 31, 2020 / 7:29 AM / Nifemi Taiyese for WebTV / Header Image Credit: Twitter, @cibnigeria

Stakeholders at the recent 6^th National Economic Outlook forum hosted by the Chartered Institute of Bankers of Nigeria (CIBN) agreed that Nigeria needs an enabling environment to attract foreign direct investments.

They argued that this would help to unlock growth and change the current trajectory of GDP , as the nation seeks sustained double-digit growth.

Giving his opening remarks at the forum the President and Chairman of Council of CIBN Dr. Uche Olowu, said the session was designed to bring subject matter experts and seasoned practitioners to discuss emerging and pertinent issues facing both national and global economies and the implications for businesses.

He spoke on relatively new policies intended to expand economic activities in the country, from the signing of the AfCFTA agreement, the launch of the creative industry financing initiative, the signing of the finance bill and land border closure to prevent the illegal smuggling of food products.

Dr Olowu believed that the manufacturing sector had immense potential to be a powerhouse for the economy, urging public policy managers to look inward in resolving gaps in the supply of both consumer and industrial goods.

The Special Adviser to the Deputy Governor Economic Policy Directorate, Central Bank of Nigeria, Dr. Emmanuel Adamgbewho represented Dr. Okwu Joseph Nnanna gave a presentation on the monetary policy outlook in 2020.

Dr Adamgbe noted that the return to growth in Nigeria was supported by a combination of swift and far reaching monetary policy measures, as well as implementation of policies contained in the Economic Recovery and Growth plan of the fiscal authority.

He however noted that Nigeria's economic structure's increased vulnerability to the oil sector is bad for long-term stability and development.

"Rebalancing the structure of the economy and economic diversification cannot be overemphasized. A diversified economy will assist in solving high unemployment problems, uneven development, persisting inflationary pressures, wide income inequality, high poverty level and high level of insecurity. Broadly diversified economies could absorb the unintended consequence of global disruptions quicker relative to narrowly diversified countries such as Nigeria" Dr Adamgbe said.

Given the rising socio -economic challenges facing the country, the CBN agreed that the Agricultural sector is a key priority sector that must be leveraged to bring about improved social well-being.

He also identified product diversification, income sources diversification and export diversification as key areas for the nation to consider.

To achieve its goals, Dr Adamgbe said the CBN has deployed unconventional tools including real sector interventions, with the objective of providing support for sectors of the economy that directly impact on price stability.

He highlighted some strategies the CBN has employed in revamping its monetary policy to include;

Reform of foreign exchange market

Forward looking monetary policy forecasting tools

Signaling of Monetary policy

Dr. Biodun Adedipe Chief Consultant of B. Adedipe Associates Limited in his presentation on the economic outlook for 2020, believed the growth drivers will be Information, Communications and Technology, Human Capital, Financial services, banking and insurance, mortgage, health, infrastructure, power, logistics, water and sewage management.

He called for a policy focus that will ensure a significant reduction in inequality and the eradication of extreme poverty in Nigeria. According to him in the last 5 to 7 years, there has been a shift of Nigeria's population distribution as most people now live in urban areas.

In the implementation of the Economic Recovery and Growth Plan (ERGP) Dr. Adedipe called on the government to collaborate closely with businesses to increase their investments in agriculture, manufacturing, solid mineral and services sector and support the private sector in becoming the engine of national growth and development.

According to Adedipe a major challenge for Nigeria is to continue to sustain investor confidence, to attract foreign direct investment inflows, FDIs.

He commended the Federal Government for signing the Finance Act 2019, which he described as a step in the right direction.

Mr. Joe Ugoala Director, Policy, Strategy and Risk Management Department of the Debt Management Office, DMO who represented the Director-General Ms Patience Oniha said Nigeria cannot stop borrowing because it runs a deficit budget.

He reiterated the fact that the job of the DMO is to advice government on borrowing and how to manage the already borrowed funds. The loan portfolio of Nigeria according to him is about N26.2trn. Mr Ugoala said more than 25% of the N26.2trillion apart from the Federal Government is owed by the states including the Federal Capital Territory.

Looking at the debt to GDP ratio, Ugoala noted that Nigeria's debt to GDP is still less than 20%.

"The challenge is in the debt service to revenue because we are not getting revenue as GDP is growing so there is a structural problem that needs to be addressed to get revenue from that growing GDP to service debts" Mr Ugoala said.

The event also featured a panel session with the Founder and Chairman of Proshare Nigeria Limited Mr. Olufemi Awoyemi as moderator.