Lender’s Quest For Sustainable, Inclusive Economic Growth

The second edition of Access Bank’s Corporate Forum with the theme, ‘Nigeria’s Economic rebirth: Hopes and implications’ must have come and gone but the robust discussions at the event will linger for a very long time to come. Bamidele Ogunwusi, report; 

The 2024 Access Bank’s Corporate Forum has all the tapings of a classical economic forum considering the caliber of speakers and attendees at the forum.

The Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun, led government and policy makers to the meeting which also has the foremost economist, DrRewane Lukman as the main speaker, TaiwoOyedele, Chairman, Presidential Fiscal Policy and Tax Reforms Committee and Aliko Dangote, President of the Dangote Group.

Roosevelt Ogbonna, Managing Director, Access Bank, in his opening remarks, said the forum is the bank’s response to the call for a better tomorrow and that the bank has chosen to lead others in finding lasting solutions to Nigeria’s economy’s problems.

He said the 2024 edition of the Corporate Forum is a follow-up to the 2023 edition which was based on strong conversation around fiscal policy as well as tax reforms.

He said, “Last year was to give our customers an opportunity to understand the fiscal policy mindset of this government and how they want to execute their policy drive. Economically, they have to be mindful as to where the government is going.

“Government is still a large part of our economic narrative. They are almost 40 or 45 per cent of economic activity. So if I’m in business, I need to understand where the government is going.

“Last year was to provide that context setting and allow businesses to start thinking about how to change their own policies, following the government’s own directive.

This year, however, we have had conversations over the last 12 to 13 months, where there has been a lot of negativity because transition and change causes pain.

“So, there has been pain that has kind of numbed us to the opportunities that exist. And what we are hoping with this conversation is to start to ignite the minds of businesses, to say, whilst we have had negative backdrop and economic headwinds for the last 12 to 13 months, things are settling, and in some industries have settled, start now looking at the opportunities.

“So, just the mindset change is also extremely critical and I believe tomorrow is going to be better than today. My investment philosophy will change and I am now going to buy more machinery, I am going to employ more people, I am going to build more factories. We are saying at Access Bank that let’s start doing it now, because there are opportunities tomorrow.

“Bismarck spoke about 2026 and if we all believe 2026 is going to be better, our economic decision making changes immediately. So that context setting was what this was supposed to help achieve. So, last year was quality direction, understanding the economy, the new government and how they intend to pursue fiscal policy. This year’s understanding is that we have gone through a significant policy transition with all the adjustment of removal of subsidies and all.

“We need to stop talking about all the negatives and now start focusing on taking advantage of the economic opportunities that exist. The bank is part of the economy. You have to understand that the industry thrives when the economy thrives. Every business thrives when the economy thrives. By being the biggest bank in the market today means that if the Nigerian economy is growing, we, by extension, will grow”.

FG’s move

In a move to alleviate suffering across the country where purchasing powers among Nigerians have being battered by policies of government, the Federal Government said yesterday that it will soon unveil a consumer credit funding programme  for Nigerians where they will be able to buy goods produced and manufactured in Nigeria and pay in installment and also unveil a single-digit mortgage funding scheme.

He said: “Consumer Credit is coming for Nigerians. It will be for the funding of manufacturing and sales of manufacturing products by giving people the opportunity to pay as they go, especially for more durable products. That will be a goal for the manufacturing sector.

“We, as a government have challenged ourselves to in the near future provide Nigerians with near-single digit interest rate, 25 year mortgages, so that we ride the construction sector.

“This government may not be talking too much but we are working on so many things underground for the benefit of Nigerians”.

In his presentation at the well-attended event, Edun said the federal government and state governments are working with farmers. He said 60,000 farmers will be assisted with the needed resources and the effects of this will begin to show from early next year.

He said, “By next January, February, Nigerians will begin to see these harvests coming out. Things like cassava and tubers. The result will be the key factors of the contributions and sacrifices we are currently making. This is a project and everybody has a role to play in producing food.

“Let me just emphasise once again, that all is being done to ensure that the commitment of Mr. President to help the vulnerable, to provide them with direct transfers means that they can decide what is their priority, which is a very good way of intervening. As we found during COVID-19, there is the determination to succeed in that area.

Edun was also optimistic that Nigeria will achieve an improved Gross Domestic Product (GDP) in 2026 as the country now records about $2.35 billion as net inflow into the Central Bank of Nigeria‘s  foreign reserves.

He said the increase in foreign reserves has contributed significantly to the stability of the naira in the foreign exchange market.

According to him, this uptick has been the case for the past seven months of the year 2024. We have relative currency stability. And of course, the all-important margin of the rates. We’ve seen a gradual elimination of multiple exchange rates.  We also have foreign exchange liquidity. The gross reserves are up. There has been a net inflow in the first seven months of this year of about $2.35 billion every month.

“On the fiscal side as well, government revenues are growing and the key to government revenue is not so much that the government has revenue to compete with the private sector.”

The Minister also reiterated that the government is working to ramp up crude oil production as a buffer for the fiscal revenues of the country, saying that the country is on track to produce the targeted two million crude oil barrels per day (bpd) before the end of 2024.

2026 projections

In his projections for the economy by 2026, foremost economist, Bismarck Rewane, Chief Executive Officer, Financial Derivatives Company Limited said, “the Nigerian economy will grow at 3.5 per cent (approximately $400 billion), making it the second-largest economy in SSA.”

He noted that “electricity tariff will remain above 200kwh in bands ‘A and B’; telecom tariff will increase substantially; there will be efficient forex auction system; unencumbered foreign reserves will be at $20 billion; inflation will continue to decline to 22 per cent; and MPR will be reduced to 20 per cent per annum.

He also anticipated that “in 2026, we would have a proper forex system that is functioning, due to intervention funds, diaspora remittances, and exchange rate adjustment policies.”

Rewane added that “Dangote refinery and production from modular refineries will guarantee regular petrol supply and will be quoted on the Nigerian Exchange (NGX); while stock market capitalization will be N58 trillion.”

According to Rewane, NGX performance will be supported by the listing of big cap stocks like Dangote Refinery and NNPC amongst others. Blue-chip companies are restoring shareholder’s value resulting from FX losses and a moderation in rising Treasury bill rates will encourage greater diversification and participation in the NGX.

He also said Nigeria is currently confronting structural and transitory economic challenges and the current reforms were aimed at resetting the economy for industrial takeoff, saying that the reforms are facing pushbacks and backlashes partly due to poor reform designs, lack of sequencing, and clash of interests.

“Petrol subsidy is expected to be fully removed by 2025, government revenue has risen by over 50 per cent, but the circular flow of income remains short circuited and Nigeria has great investment opportunities in most of the sectors,” he explained

In his contribution, President of Dangote Group, Aliko Dangote, said the government should protect local manufacturers against influx of products from foreign manufacturers.

He said, “With the system we operate in Nigeria with high interest rate, Nigerian manufacturers cannot compete with foreign counterparts as a result, we will be killing businesses here and encouraging more employment in other countries”.