As Nigeria continues to look for taxable revenue to plug the deficit in the 2022 budget, Ayo Teriba, the chief executive officer, Economic Associates, has urged the Federal Government (FG) to leverage technology in growing the nation’s assets to unlock liquidity. “I do not see any solution for Nigeria that does not connect back with the global trends. Technology is unlocking global liquidity”.
Teriba spoke on Nigeria’s 2022 economic outlook at the National Association of Microfinance Banks (NAMB) Lagos state chapter’s stakeholders seminar 2022 tagged, ‘The Importance of Microfinance in Revamping the Nigerian Economy; Roles, Impacts, and Prospects’.
According to him, opportunities to move the economy forward abound but the narratives run contrary to the reality while adding that China, Brazil and India who were once in the poverty bracket have gone on to become superpowers in the global economy.
Teriba explained that for Nigeria to get away from the poverty bracket, she needs to strategically reposition herself for global trends; become proactive in seizing opportunities ahead of others, adjust and connect her economy to the unfolding global realities in 2022.
He, therefore, urged the government to go for non-tax revenue, stating that increasing taxes in a recession will not bring more revenue, as revenue aspirations might not be met. Accordingly, he posits that the wide disparities between outcomes and official pronouncements undermine the fiscal credibility of the government.
“Trying to grow tax revenue in a recession is a dead-end, non-tax revenues are more promising and Nigeria’s plethora of assets that offer huge non-tax revenue potentials remain unexploited. Hence, deficits will most certainly be more than budgeted once revenue disappoints. This is why we need to start unlocking liquidity assets and stop borrowing in the ‘wrong’ way. This is the time to offer equity opportunities to the private sector and enable wealth creation,” Teriba said.
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According to him, seeking increased government revenues from economic transactions at a time that global operating margins are dwindling is a mirage that can result in funding shortfalls, which means the budget get tossed to and fro by economic conditions they are meant to guide. “If Nigeria cannot coherently deploy effective policy instruments as fundamental as an annual FGN spending plan; then we cannot be expected to hit any of her stability, growth, diversification, poverty reduction, employment policy targets”.
Abubakar Suleiman, the managing director, Sterling Bank Plc, said Nigeria has the lowest savings-to-GDP in Africa, and Nigeria does not know the economic potentials of its population. According to him, Nigeria’s primary problem is how to create wealth.
He stated further that there was definitely no way the nation could build revenue streams from assets that are unknown and urged the FG to create wealth for the masses.
Taiwo Joda, Chairman, NAMB and the managing director, ACCION Microfinance Bank, said there is a need to make products of microfinance institutions available to people at the bottom end of the pyramid. According to him, Nigeria’s economy is very fragile because over 90 million of her population lives below the poverty line.
Joda posits that the industry has potential to assist Nigeria’s economy, hence the need to build and strengthen the microfinance institution. “Microfinance banks are a catalyst for economic growth,” said Joda, stating that the nation’s savings culture remains fragile owing to low drive of financial inclusion in some regions.
