Nigeria, which is currently in recession, requires massive investment to grow in 2021 and to achieve this, it needs to have macroeconomic stability, according to Doyin Salami, chairman, presidential economic advisory council on Tuesday.
Macroeconomic stability is about bringing down inflation and achieving growth. Nigeria’s inflation increased by 15.75 percent (year-on-year) in December 2020. This is 0.86 percent points higher than the rate recorded in November 2020 (14.89) percent, according to the National Bureau of Statistics (NBS).
The economy “officially” entered a recession after contracting 3.62 percent in the third quarter of year, caused majorly by the impact of the pandemic and a lack of reforms by both the fiscal to boost confidence and attract private investment in an economy that depends largely on the oil sector to grow.
“We need a set of policy that are internally coherent and consistent, which enables us to bring down inflation and accelerate growth,” Salami said while delivering a keynote address at the 7th National Economic Outlook conference organised by the Chartered Institute of Bankers of Nigeria Centre for Financial Studies (CIBNCFS) in collaboration with B. Adedipe Associates Limited, held virtually on Tuesday.
Beyond that Salami expects monetary policy authority to address the gap between inflation and interest rates.
Another issue on the macroeconomic stability side has got to do with exchange rate and determination.
“Nigeria must adopt an FX policy that allows economy to grow. It is about using exchange rate policy to grow the economy. It is not about devaluation. The key challenge around exchange rate is as part of ensuring confidence in the economy,” he said.
The local currency closed stable across market segments on Tuesday. At the parallel market and the Bureau De Change (BDC) segment, naira steadied at N475 per dollar.
At the Investors and Exporters (I&E) forex window, Naira appreciated further by 0.12 percent as the dollar was quoted at N393.35k on Tuesday as against the last close of at N393.83k on Monday. Analysts at FSDH research noted that most participants maintained bids between N388.00 and N415.76 per dollar.
On the global scene, he said key drivers in 2021 have to do with international environment, as he sees covid-19 pandemic remaining a major issue.
In his welcome remarks, Bayo Olugbemi, presicent/chairman of council, CIBN, said the last 12 months have been challenging experienced by a plethora of disruptions which include an oil price war between Russia and Saudi Arabia, remote working, on-going second wave of the Coronavirus pandemic, civil unrest and of course the second economic recession. Indeed, it has been a challenging year.
Represented by Pius Olanrewaji, 2nd vice president, CIBN, he said despite the disruptions, the year was laden with diverse opportunities. Businesses were forced to rethink their operational and strategic models towards digital transformation and innovation. Several reports detail the fact that the COVID-19 crisis has accelerated the digitization of customer services, appetites, and interactions.
“As we move deeper into the new decade and New Year, there are more questions and challenges beckoning for pragmatic solutions. It is for this reason that this event is significant to tackle these as well as other key issues,” he said.
