A Senior Lecturer of the Lagos Business School, Dr Doyin Salami on Friday advised the Federal Government to adopt measures capable of attracting private sector partnerships’ capital in order to urgently get the country out of recession.
Salami indicated this at the third Nigerian Stock Exchange (NSE) & Bloomberg Chief Executive Officers (CEO) Roundtable held in Lagos, noting that government by now should be focusing not only on recession, but on repositioning the economy for sustainable growth.
Speaking alongside other experts on the theme “Innovating out of Nigeria recession: Exploring new paradigms for Nigeria’s economic growth’’, he observed that now that Nigeria had hit the bottom, in terms of recession; its sustainability would largely depend on private sector involvement, especially in terms of how private capital flows, to ensure infrastructure development.
Government, he opined must therefore collaborate and promote the role of private sector in economic development, showing more emphasis on commitment for sustainability of economic reforms to quicken the growth of the economy.
“What will determine where we go from here is commitment to the reforms we have seen,” Salami stated, noting that coming out of recession was no longer the major thing but growing rapidly and ensuring sustainability are the key things.
“If Nigeria grows less than three per cent, it means that per capital income is still very low,” he said, stressing the need to diversify revenue base, so as to strengthen economic growth and recovery.
He maintained that Government should tackle inflation rate, more so as the current inflation rate of above 12 per cent was devastating on the country; in addition to a structured harmonisation of fiscal and monetary policies to achieve the desired growth.
“Wages and salaries are still shrinking in spite of the fact that the economy is coming out of recession.
“We need to find creative measures to take consumers out of pressure,’’ Salami added, pointing out that the last minimum wage was done in 2011, despite the reality that workers had lost a significant 50 per cent, going by the challenges in the economy.
He emphasised the need to frontally tackle youth unemployment and subsequently increase productivity, adding that the biggest challenge of the country was unemployment and productivity. Even as he noted that the starting point should be by entrenching competitiveness and restoration of confidence, two important items needed to achieve sustainable growth and development.
Speaking in the same vein, the CEO Stanbic IBTC Bank, Dr Demola Sogunle, highlighted that banks’ non-performing loans grew massively with an average above 20 per cent in 2016 due to the recession.
Sogunle stated that massive impairment caused by devaluation of the naira, foreign exchange illiquidity eroded capital of some banks in the 2016 financial year, thereby forcing the industry to resort to rationalisation, right sizing and other strategies to reduce cost.
He also noted that though the industry was tending towards digitisation to reduce cost, the banks could not afford to roll out branch networks.
The CEO Main One, Ms Funke Opeke observed that recession actually slowed down investment in the telecommunication sector.
Opeke said that the industry was unable to approach the market for foreign exchange for importation of equipment needed for efficient and effective service delivery.
She stated that the industry tried to drive operational efficiency out of the existing assets.
Opeke added that the impact of job cuts were severe, thereby eroding quality of service delivery.
Mr Andrew Alli, the President and CEO Africa Finance Corporation (AFC), said that economic contraction affected project development in the country.
Alli said that there had not been many large scale projects in Nigeria in the last few years because of economic contraction.
He said that the corporation was looking at innovative product that would allow financing in naira.
Alli, however, called on the government to address the nation’s inflation and interest rates.
In his own view on at the Roundtable, the Nigeria Stock Exchange CEO, Mr Oscar Onyema, indicated that the country needed to position itself to maximise the opportunities in the recovering economy.
Onyema said that policy makers should address foreign exchange policies and double taxation to ensure ease of doing business.
He stated that the exchange would continue to provide the needed platform for economic growth and development.