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Nigeria’s economy can’t survive without diaspora inputs, says PwC Chief Economist

Dr Andrew Nevin, Chief Economist of PwC, disclosed that the remittance inflows into the country show that Nigeria depends largely on the diaspora to survive.

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Nigeria’s economy can’t survive without diaspora inputs, says PwC Chief Economist

Nigerians in Diaspora have been described as the chief enablers financing the Nigerian economy. The remittance inflows into the country showed that the nation depends largely on them to survive.

This disclosure was made by the Leader and Chief Economist of PwC, Dr Andrew Nevin. While speaking during his presentation at the Africa Institute for Leadership and Public Administration (AILPA) seminar, which was covered by Nairametrics, Nevin said Nigeria was the largest recipient of remittance flows to Sub-Saharan Africa (SSA) in 2018.

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With migrant remittance to the country rising by 14%, after a brief decline in 2016, from $22 billion in 2017 to over $25 billion in 2018, Nevin explained that the value of migrant remittances in 2018 represented 6.1% of Nigeria’s GDP, 11 times the FDI inflows, and 7.4 times larger than the foreign aid received in 2017.

Nevin further explained that the remittance inflow is not slowing down any sooner, as it is projected to increase to over $29 billion by 2023 undisturbed by the rising migrant population of Nigerians and the declining cost of sending money home. Occasioned by the activities of fintechs.

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[READ MORE: Nigeria receives $17.5 billion diaspora remittances in 2019)

Speaking on the topic, ‘The relationship between good governance and economic prosperity,’ Nevin, who is also the Co-founder of Binkabi, said the economic impact of good governance cannot be overemphasized as it is crucial to the economic prosperity of the country.

He made known that the government needs to focus more on delivering adequate services to the people instead of channelling all its efforts on raising the nation’s GDP. He added that a shift towards measuring SDG’s to GDP should be done.

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According to Nevin, Nigeria ranks low on the Sustainable Development Goals index compared to other countries globally and across Africa.

Shrinking public fund and low taxation in Nigeria

Over the last two-decade, Nigeria’s expenditure penetration rate has shrunk from 25% in 2000 to 13% in 2018 and it is estimated to decline marginally to 12% in 2020, Nevin explained.

According to him, the country also has the lowest expenditure per capita among countries like Brazil, South Africa and India.

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Nelvin stressed that while the Finance Bill aims to improve the fiscal structure of the government, more still needs to be done in terms of making taxation work effectively in the country.

Nevin’s words: “The government needs to focus on delivering services so that the people will be more likely to pay their taxes. In addition to this, the government itself has to be more tax compliant, many of the government organisations withhold taxes from their employees at the end of the month.

“It’ll be easier to pay more taxes if the economy is growing. When the economy is declining, it’s very hard to ask people to pay more but if we were growing faster, then we would find a way.”

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[READ ALSO: The diaspora holds the key to improvement in Africa)

Formal versus Informal sector

For Nevin, the informal sector of the economy is directly affecting governance in more than one way. He said that more people choose to work in the informal sector rather than the formal sector of the economy because it is more attractive to them.

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He said the formal sector is choked with complexities from the government amidst rules and regulations which are too costly.

Nevin, however, stressed that the informal sector has grown to a large extent. This, he said is detrimental to the economy as the formal sector needs to be growing more.

“For Nigeria economy to become more prosperous we need the formal economy to grow faster than the informal economy. Maybe the informal is doing better because more people are attracted into joining them than the formal and this is obviously because of the poor governance that exist as well as the inequality in the rules and regulations,” Nevin said.

Patricia

Chidinma holds a degree in Mass communication from Caleb University Lagos and a Masters in view in Public Relations. She strongly believes in self development which has made her volunteer with an NGO on girl child development. She loves writing, reading and travelling. You may contact her via - [email protected]

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Coronavirus

Former Liberian President to sit on WHO review panel of COVID-19 response effort

Ellen Sirleaf has been picked alongside Helen Clark, to serve as co-chairs of the independent panel.

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Former Liberian President to sit on WHO review panel of Covid-19 response effort

Following stern criticism by US President, Donald Trump, over their handling of the COVID-19 response efforts, the World Health Organization (WHO) has announced it will implement an independent panel to review said response efforts to the pandemic.

To this end, Liberia’s former President and West Africa’s first female President, Ellen Johnson Sirleaf, has been picked alongside former Prime Minister of New Zealand, Helen Clark, to serve as co-chairs of the independent panel. They will be responsible for selecting the other members of the panel, according to the WHO.

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WHO’s Director-General, Tedros Adhanom, announced the panel will produce an interim report in a November meeting of global health ministers. Meanwhile, the substantive report would be produced by May 2021.

Tedros also said that the size of the pandemic calls for the need for a “commensurate evaluation, an honest evaluation”, adding that the WHO would be very serious with the preparation of the report.

READ MORE:COVID-19: WHO warns worst is yet to come as firm charges $2,340 for virus treatment

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The WHO members in May agreed to an independent review of the organization’s response to the pandemic. Ellen Johnson Sirleaf said the review of the body’s response would be challenging but looks forward to her role in doing what she can contribute to the response of the pandemic’s challenges.

The panel will also report monthly updates on the body’s response and will not only review the WHO’s response but also the International community’s response. Tedros added that it’s time for an honest reflection on the global response, saying a response will help with lessons on the pandemic.

 

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Economy & Politics

Presidency dismisses allegation of Osinbajo receiving N4 billion from recovered loots

The accusation was described to be an obvious campaign of lies and calumny.

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Twitter deactivate Yemi Osinbajo's Twitter account, How Nigeria's LPG sector can create 2 million jobs -Osinbajo, budget support, NEC okays $250 million investment in NSIA , MSMEClinic gets 200,000 capacity yam storage facility in Benue, Accusations of Yemi Osinbajo receiving N4 Billion from recovered loots are baseless- Presidency

The office of the Vice President has reacted to a series of tweets accusing Professor Yemi Osinbajo of instructing the embattled acting Chairman of the EFCC, Ibrahim Magu, to release the sum of N4 billion out of N39 billion that was recovered from alleged looters. 

These allegations have been described as “false and baseless”. 

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READ ALSO: UPDATE: President Buhari appoints Prof. Gambari as new Chief of Staff

A statement that was signed by the Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said, with all emphasis at our disposal, let it be firmly stated that these are totally false and baseless fabrications purposing to reflect goings-on at the probe panel investigating Mr Ibrahim Magu”. 

Ibrahim Magu was relieved of his duties this week, after a probe was conducted on his activities as Acting Chairman of the nation’s anti-graft agency. He has since been replaced with Mohammed Umar. 

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READ MORE: Just In: DSS invites EFCC’s Acting Chairman, Ibrahim Magu for questioning)

Meanwhile, the statement by the Presidency also complained about the recent rise in people being paid to “peddle blatant falsehoods” against the Vice President and says Mr Osinbajo “will not be distracted by these obvious campaigns of lies and calumny”. 

The statement added that the online publications “being criminally defamatory in nature”  have been referred to law enforcement agencies for investigation. 

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Explore economic research data from Nairametrics on Nairalytics

 

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Financial Services

Stanbic IBTC observes closed period, as directors set to consider H1 results

The directors will also consider a proposal to pay an interim dividend to shareholders.

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Stanbic IBTC

Stanbic IBTC Holdings Plc announced earlier today that its board of directors will meet on Wednesday, July 29, as part of preparations towards the release of the company’s consolidated and separate audited financial statements for half-year 2020. The directors will also consider a proposal to pay the company’s shareholders an interim dividend.

A statement issued by the Stanbic IBTC to the Nigerian Stock Exchange (NSE) noted that the scheduled board meeting is in tandem with guidelines contained in section 1.2 of the NSE’s rules book.

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In the meantime, the bank Hold-Co has already commenced observing its closed period ahead of the release of the half-year financial statements. Specifically, Stanbic IBTC began observing its closed period on June 1st, 2020, the implication being that all insiders and their relatives have been prohibited from trading the company’s shares for more than one month now.

Explore economic research data from Nairametrics on Nairalytics

Note that the Stanbic IBTC’s closed period will continue until the half-year financial statements are released. Part of the statement which was signed by Chidi Okezie (Company Secretary), said:

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“In accordance with the provisions of Section 1.2 of the Rules of The Nigerian Stock Exchange (The NSE) relating to Board Meetings and General Meetings of Issuers, we would like to notify The NSE and our Shareholders, that a meeting of the Board of Directors of Stanbic IBTC Holdings PLC (the Company) is scheduled to hold on Wednesday 29 July 2020 at 1:00 pm. The meeting will discuss amongst other items, the Company’s Consolidated and Separate Audited Financial Statements for the Half-year ended 30 June 2020 as well as a proposed interim dividend.

READ ALSO: COVID-19: NSE extends time for submission of audited financial statements

“In view of the above, the closed period for the release of half-year results, which commenced on Monday, 01 June 2020 will continue to be in effect until the release of the Company’s Half-year audited financial statements.”

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Recall that the last earnings report that was released by Stanbic IBTC Holdings Plc was for Q1 2020. The unaudited report showed that gross earnings stood at N61.4 billion as against N58.7 billion in Q1 2019, even though interest income for the period declined by 12% year on year to N27.5 billion. Meanwhile, profit for the period stood at N20.6 billion, an increase when compared to N19.2 billion in Q1 2019.

Stanbic IBTC Holdings’ share price closed at N30.25 at the end of today’s trading session on the Nigerian Stock Exchange. Year to date, the stock has declined by nearly -20%.

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