Nigeria needs to invest a minimum of $110bn annually to be able to lift 10 million people out of poverty each year, Bismarck Rewane, a member of the Nigeria’s Economic Advisory Council, has said.
President Muhammadu Buhari announced last June that Nigeria would over the next 10 years lift 100 million Nigerians out of absolute poverty, which translates into lifting an average of10million Nigerians every year.
Rewane spoke on ‘The Nigerian Economy in 2020: Implications for the Marketing Communications Sector’ in Lagos Monday, and noted that the investment component of Nigeria’s GDP currently is about N$66 billion. To double it, Nigeria needs to practically improve Ease of doing Business, infrastructure especially electricity, discipline and investment openness, he said.
Other approaches by Rewane who is also the CEO of Financial Derivatives Limited to achieve the reduction in poverty include reduction in income inequality and poverty; increase in national savings, domestic output and productivity.
Nigeria in 2018 became the world poverty capital, overtaking India as the country with the largest number of extremely poor people.
Rewane also suggested a reverse in monetary policy direction to curb inflation and build external reserves, reforming of the forex market, and using the incorporated joint venture, IJVs of the upstream sector as a catalyst.
The economist who spoke at Public Relations Consultants Association of Nigeria, PRCAN forum, said that to transform people’s lives, Nigeria needs 8% GDP growth rate from the present 2.1% and massive electricity improvement which he described as the driver of economic production.
According to him, Nigeria needs a proactive instead of reactive approaches and policies to move the economy forward.
On the outlook for 2020, he said that unorthodox monetary policy had led to negative rates of return. Looking at 91-day T/bills at 2.95% and inflation at 11.98%, he said there will likely be reduction in the propensity to save in 2020.
He said there would be pressure on the external sector and trade balance surplus and current account deficit would likely continue in 2020. “After inflow following elections portfolio flows have declined,” he noted.
He forecast that external reserves, now down to approximately $38bn, would fall to $34bn in Q2 and import cover now down to approximately 10 months- estimated to fall to 9 months.
Rewane also expect CBN being more proactive in managing financial system risks, while growth would growth would likely remain unchanged at 2.2% in 2020.
On implications for the Marketing Communications Sector, he said the various government protectionist strategies would incentivise increased domestic production and sectors such as agriculture, manufacturing and ICT will benefit immensely. He foresees a possible increase in demand for PR services to explain economic dynamism to consumers.
He therefore challenged PR practitioners who are working for companies to brace up for the challenges ahead to explain in clear terms and language the impact of border closure, cashless policy, VAT, rising inflation which erodes consumer purchasing power, government borrowing and other government actions on the cautious consumer.
He warned PR practitioners that reduction in aggregate demand could trigger a reduction in spending on PR services.
Speaking earlier, the President of PRCAN, Israel Opayemi, who is the CEO of Chain Reactions, said the body haf brought Public Relations back to the track the founders wanted it to be.
In line with Rewane’s challenge to PR sector, Opayemi said Public Relations is all about analysing trends and predicting their consequences.
“With Bismarck Rewane as speaker what we have done today is to analyse the trend that the Nigerian economy is taking in 2020 and we have predicted their consequences. Opayemi said the lecture would enable his members to re-plan for the challenges ahead.