Nigeria: Experts list measures to address economic crisis

The Central Bank of Nigeria (CBN) as said that its staff in Jos Branch, on Tuesday averted what would have been another major fire disaster in the country.

Economic and financial experts have said Nigeria needs to pay adequate attention to 10 priority areas, strengthen the disbursement and accountability framework of the Central Bank of Nigeria (CBN) funds among others, in order to Address her economic crisis and accelerate the country’s economic growth.

The experts, which include Partner and Chief Economist at PwC Nigeria, Andrew Nevin; Chief Economist of Coronation Merchant Bank, Chinwe Egwim; MD/CEO, Financial Derivatives Company, Bismarck Rewane, and Executive Secretary/CEO, Nigerian Investment Promotion Commission, Ms. Yewande Sadiku, made the disclosure at the recent Nairametrics’ Economic Roundtable, themed, ‘How to Get Out of This Economic Crisis.’

Nevin pointed out that though the nation is rich, its dead assets remained a major bane to its economic growth. He described dead asset as unregistered real property that is considered as lost value because the landholder is unable to transfer or leverage the property to borrow or access capital.

The areas, according to the economist, are unlocking Nigeria’s vast dead assets to stimulate growth, harnessing the power of the diaspora, driving export growth through services.

Others are improving on the business environment; ease of doing business; addressing Nigeria’s big three distortions such as exchange rate, power, and subsidies; shifting focus from the Gross Domestic Product (GDP) lens to sustainable development goals, and prioritising climate change.

Nevin added that  finding the political will to act and unlock Nigeria’s dead real estate assets would have a transformative impact on the lives of Nigerians.

Rewane said the simple solution for Nigeria’s economic challenges, would be to stop doing dumb things, and start doing smart things as running a deficit is not inherently bad. He explained that the fact that the government is running a fiscal deficit is not a bad thing in itself because it could be a countercyclical move, which is in line with the Keynesian school of thought, meant to stimulate growth in a recessive period.

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Budget is a tool of economic management, Rewane said, while drawing attention to the use of budget deficit in the US to stimulate growth evident in their economic recovery and low unemployment figures.

“The question is whether your deficit is giving you the economic outcome or is just a deficit in numbers,” Rewane said. He added that fiscal policy debate would be centred on the revenue generated, which may be good, but advised that more attention should be called to the way the revenue is spent on improving the welfare of Nigerians.

“Emphasis should be on how the government revenue is spent and its impact on the people,“ he said.

Rewane also drew attention to the exchange rate, stating that Nigeria is moving in the right direction very slowly. “Questions about the high exchange rate are not important but what should be the core issue should be the performance of Nigeria relative to its trading partners.   “A market-determined exchange rate is possible,” he stated.

“For Africa, Nigeria in particular, three things are important; Stop doing dumb thing; Start doing smart things and Start doing modern things,” Rewane added.

Speaking about the importance of capital inflow in terms of investments in driving economic growth, Sadiku explained that though global capital inflow had been under pressure since 2011 in Nigeria, the most populated black nation is not resting on her oars. According to her, between 2011 and till date, the only year we experienced a hike in capital inflow was 2018.

She said, “Investors are very brave but the capital they carry is cowardly”. Capital goes where it is not threatened and where it is comfortable. The greatest antidote to the cowardice of investors-money is confidence.

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“Government is doing some work on the ease of doing business in Nigeria but the decline has been going on for so long. The movement of capital is subject not only to the competitive advantage Nigeria has but also to comparative advantage. The job of looking for investors can’t be left for an agency but should be collective efforts.”

According to Sadiku, “Investors are concerned about security, corruption, exchange rate, policy instabilities and arbitrary regulatory functions and the government has been building blocks that need to be in place and there needs to be an acknowledgement that it will take a while.”

Nairametrics is a Business News, Research and Investment Analysis website based in Nigeria, Africa’s largest economy. The website is owned by Nairametrics Financial Advocates Ltd, a Nigerian based company. Nairametrics periodically organises quarterly roundtable/outlook discussions with industry experts to analyze the macro-economic environment.

Nairametrics’ website is updated with news and analysis covering Nigeria’s capital and money market, providing readers with up-to-date financial, investing, and business news, research-based content, financial literacy, and personal finance resources.

It was founded by Ugochukwu “Ugodre” Obi-Chukwu, a chartered accountant based in Lagos, Nigeria. Ugodre started Nairametrics, writing under the blog name “Ugometrics” in the early 2010s. He initially used the blog for personal finance articles and analysis of results on the Nigerian Stock Exchange. In 2013, he rebranded it to Nairametrics.

Nairametrics runs a financial radio program, Everyday Money Matters on Lagos Talks 91.3 FM; the Business Half Hour show on Classic FM, and also organises a quarterly summit where economic issues are discussed.

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