FITC, the world-class, innovation-led, and technology-driven knowledge institution which provides learning, advisory and policy advocacy services to the Nigerian financial services and other sectors, has organized its maiden National Economic Development Outlook Series (NEDS) 2022, to support economic development and enable companies to grow and thrive this year and beyond.
The virtual event which held recently was facilitated by local and international renowned economists, top c-suite executives, subject matter experts, thought leaders and professionals who came together to share contemporary insights on the programme themed; “’Rebooting the Economy: The path to sustained Growth”.
The A-list speakers analysed the global macro-economic outlook, 2022 National Budget and share insights on contemporary economic imperatives and challenges relevant to Nigeria’s economic development.
The distinguished speakers include Chief Economist and MD/CEO, B. Adedipe Associates Limited, Dr. Abiodun Adedipe; Director-General, Budget Office of the Federation, Mr. Ben Akabueze; Partner, Tax Reporting and Strategy, PwC, Mr. Kenneth Erikume; Chief Economist, Coronation Merchant Bank, Ms. Chinwe Egwim and Economist, United Nations, Dr. Nonso Obikili.
In her opening remarks, the host, and Managing Director/CEO FITC, Chizor Malize, noted that the event is part of the institute’s mandate and commitment to creating platforms for learning, keeping participants updated on key issues that will determine fate of organizations, businesses, and the economy.
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She noted the budget is the key instrument for the execution of economic policies with the power to either promote or stunt growth in certain areas of the economy, a reason why it is very important for individuals, organizations, and businesses to fully track and understand all the implications therein for their operations.
Speaking further, Malize noted that the Nigerian economy is expected to experience some level of growth following higher oil prices, accelerated growth in Information Technology, and financial services sectors. “The oil sector will see higher prices creating opportunities for growth and domestic regulatory reforms. The FITC National Economic Development Outlook Series presents the opportunity to discuss the budget and economic direction for businesses, SMEs and government as well as all the opportunities they present,” she revealed.
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In his presentation, Lead speaker, Chief Economist and MD/CEO, B. Adedipe Associates Limited, Dr. Abiodun Adedipe noted that Nigeria’s monthly import bill had risen to N3.66 trillion adding that continuing pressure from relentless imports and shrinking capability to pay foreign bills may likely force the Central Bank of Nigeria (CBN) to further devalue the naira, but not significantly. He opined that monthly import bill of N3.66 trillion or $8.9 billion in first to third quarters of 2021, more than doubled to $4.29 billion total import bill in 2020.
“Foreign trade data suggests imports have expanded strongly to exceed exports during second quarter of 2020 to third quarter of 2021. Imports did not relent even during recession, expanding steadily since second quarter of 2018. In the same vein, foreign trade data suggests imports have expanded strongly to exceed exports between the second quarter of 2020 and third quarter of 2021 ” he said.
He also revealed that a lot of people are already mopping up dollars as expected devaluation of naira persists, worsening naira exchange rates against other currencies.
“Five years ago, the Nigerian economy was x-rayed on five accounts of oil dependency, policy inconsistency, leakages, over-dependence on imports and low national productivity. These vulnerabilities have remained unchanged, five years after. Other economies are centred around export, but Nigeria seems geared towards imports. We need to explore the African Continental Free Trade Agreement (AfCTA), by looking at Africa within the content and ask, what do Africans import? where do they import from? This will then become our own focus for export,” he stated.
In his remarks, speaker, Director-General, Budget Office of the Federation, Mr. Ben Akabueze highlighted the need to diversify the tax net and increase revenue stream for the economy. He said narrowing the budget deficit would require expanding Nigeria’s revenue base and fiscal prudence.
“Over a price of $63 per barrel, the impact on the fiscal should be negative. It means higher dollar revenue, but impact on government revenue will be lower. Today, debt service to revenue is high not because we are borrowing or paying too much for our debt, but because we are generating less revenue,” he said.
He also blamed the structural imbalance in the country’s economy as one of the reasons why federal revenue ratio to the GDP has always remained very low.
“For instance, agriculture contributes close to a quarter of our GDP but yields less than one per cent to government revenue because of the structure of that sector that is largely informal and not taxable. These are the things we need to examine. Nigeria’s economic problem is largely structural. Even our high inflation is driven largely by structural factors’’.
“That is why reform is so critical. We need to reform this system. We need strong voices supporting agents of reforms in the government,” Akabueze said.
Partner, PwC, Mr. Kenneth Erikume on his part noted the need for effective taxes that took into consideration, the economic impact of taxes on people’s businesses.
“The ideal scenario is to have minimum taxes for different sectors in the short term, but on the long term, companies should be taxed based on the economic outcomes of the businesses they have done,” he said.
Overall, Erikume noted that there is need to take utmost care in taxing businesses to ensure their operations are not threatened by tax burden as government strives to increase its revenue.
The event which was free to attend was rated as very insightful, engaging, and impactful by participants who attended from around the world.
FITC is a world-class innovation-led knowledge and professional services firm providing cutting edge Learning, Advisory and Research Services to clients in the Financial Services and other sectors, within and outside Nigeria.
Established in 1981 as a non-profit organisation limited by guarantee to provide capacity building and serve as a knowledge hub for the Nigerian Financial Services Sector. FITC is owned by the Bankers Committee, i.e., CBN, NDIC, and all deposit money banks in Nigeria.
For four decades, FITC has been at the forefront of innovative knowledge offerings designed for an array of C-suite executives, directors of banks and other financial institutions. Leveraging on international Faculty and partnership, FITC has led the knowledge space in delivering high valued capacity building solutions for Board Directors and C-suites.