Wednesday, February 22, 2017 3.29PM / B. Adedipe & Associates & CIBN
The Roundtable Session on 3rd Economic Outlook: Implications for Businesses in Nigeria was held on Tuesday, January 24, 2017 at Oriental Hotel, Victoria Island, Lagos.
The Welcome Address was given by the President/Chairman of Council, The Chartered Institute of Bankers of Nigeria, Professor Segun Ajibola, Ph.D, FCIB while the Keynote Address was delivered by Professor Akpan Ekpo, the Director General, West African Institute for Financial and Economic Management (WAIFEM) and the Overview of the Economy and 2017 Outlook was presented by Dr. Biodun Adedipe, the Chief Consultant, B. Adedipe Associates Limited.
The Panel Session, chaired by Mr. Olusuyi Adaramewa, HCIB, Former Deputy Director, Banking and Payments System Department, Central Bank of Nigeria, had the following economic and political analysts as Panellists: Dr. Frank S. Udemba Jacobs, MON, President, Manufacturers Association of Nigeria (MAN) represented by Engr. R. I. Odiah, Chairman, Economic Policy Committee, MAN; Professor Pat Utomi, Founder, Centre for Values in Leadership; Mr. Femi Awoyemi, Chief Executive Officer, Proshare Nigeria Limited and; Engr. (Mrs.) Florence Seriki, MFR, Group Managing Director, Omatek Ventures represented by Mr. Abimbola Tooki, Editor, Business World.
Highlights and Recommendations
• When Nigeria returned to civilian rule in 1999 there was hope that better macroeconomic management would be part and parcel of governance.
While there were some efforts at ensuring this, such as the passage of the Fiscal Responsibility and Procurement Acts, among others, the real sector of the economy did not grow as expected.
• During the 16-year period, the average growth rate of GDP of 6 per cent in Nigeria did not translate into economic development.
• Nigeria’s economy is still essentially based on primary production.
• Presently, Nigeria’s position in both the Global competitiveness and the Ease-of-Doing-Business Indices are at the very bottom. According to the World Economic Forum, the country scored 3.39 points out of 7 on the 2016-2017 Global Competitiveness Report and ranked 169 among 190 economies in the ease of doing business.
• It is a welcome development that the 2017 Budget is designed to partner with the private sector to ensure the growth of the economy.
• The objectives of the 2017 budget indicate that the areas of focus of the government include infrastructure, the use of special Economic zones and Industrial Parks as vehicles to fast track domestic economic activity for innovation and wealth creation, food security and agro-business, Social Housing Fund, stimulating the growth of small and medium scale businesses and provision of social safety nets for the poor.
• If these objectives are met, 2017 would provide opportunities for businesses – small, medium and large scale enterprises. These objectives will also attract new domestic and foreign investors.
• The impact of the decline in the international price of crude oil is a strong indication that Nigeria’s economy is not diversified sufficiently across sectors and within the oil sector itself.
• The delay in passing the 2016 budget, the sharp decline in oil prices, the removal of subsidy, the near absence of fiscal policy, the lack of co-ordination between the fiscal and monetary policies and the inability to integrate and coordinate the activities of sub-national governments further worsened the economic situation in the country.
• The inability of policies to address under-consumption, infrastructure deficit and declining investment resulted in two consecutive quarters of negative GDP growth in 2016. This resulted in the official announcement of the country’s plunge into recession in the 3rd quarter of 2016.
• Global forecasts state that advanced economies would grow by 1.9 per cent in 2017 and 2.0 per cent in 2018 (World Bank).
At the end of the Session, the roles of different stakeholders in revamping the Nigerian economy were identified as follows:
• Despite the shortfall in government revenue, there is the need for the current administration to move aggressively and show commitment in providing basic amenities for the average Nigerian.
• Government should focus more on restoring citizens’ trust and confidence.
• There is the need for goal congruence in the coordination of activities at the States level to complement the efforts of the Federal Government.
• The Federal Government should as a matter of urgency make its economic management team more robust and also make Nigeria’s business environment enabling for growth.
• There is the need to further reduce entrenched corruption in the system, promote good governance, adhere to policy implementation and development of critical infrastructural facilities.
• Government should promote the policy of buy made-in Nigeria goods.
• Government should pursue with more vigour the diversification of the economy.
• There is the need to diversify foreign exchange earnings and government revenue and increase domestic linkages between the economic sectors.
• Government should develop modalities for collating important economic data, for example Gross Domestic Product (GDP), at state and possibly local government levels. Efforts of relevant agencies should not only be concentrated on the Federal. This would facilitate decision making processes for these levels of government.
• Revise the spend-all policy on Federal allocation to states which currently does not support adequate and effective saving culture in the country.
• There is the need for strategic borrowing by the government to finance infrastructural development.
• The Ministry of Finance and the Evaluation and Monitoring Unit of the National Planning Commission should adequately monitor allocated funds for development projects by measuring the level of completion of projects and holding responsible, persons accountable for funds disbursed.
• Economic managers at all levels should be measured on the basis of their deliverables.
Regulatory Institutions (Central Bank of Nigeria)
• There is the need for improved co-ordination of the fiscal and monetary policies to improve significantly the productive sector of the economy.
• The Central Bank of Nigeria should pursue a macroeconomic management policy that would moderate inflation rate and ensure a single-digit interest rate.
CIBN, Banks and other Businesses Enterprises
· CIBN, banks and other financial institutions should conduct research on emerging opportunities for business growth.
· There is the need for the banking industry to increase lending to the small and medium sized enterprises at a low interest rate in order to boost productive activities of the SMEs sector.
· There is the need for businesses to show more interest in sectors with more local content to avoid the foreign exchange constraint.
· There is the need for businesses to seize the opportunity of the recession to be innovative, explore and exploit government policies regarding agriculture and invest in made-in-Nigeria goods and services.
The Session was well-attended with delegates from both the public and private sectors of the economy. The resource persons displayed excellent mastery of the subject matter and participants’ contributions to the discussion were insightful.
’Seye Awojobi, FCIB Dr. Biodun Adedipe
Registrar/Chief Executive Chief Consultant
The Chartered Institute of Bankers of Nigeria B. Adedipe Associates Ltd
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