FITC’s National Economic Development Outlook Series put economy on recovery paths

FITC, an innovation-led and technology-driven knowledge institution, has organised its maiden National Economic Development Outlook Series (NEDS) 2022, to support economic development and enable companies to grow and thrive this year and beyond.

FITC, a firm with massive capacity to provide learning, advisory, and policy advocacy services to the Nigerian financial services and other sectors held the virtual event recently which 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 shared 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, Abiodun Adedipe; director-general, Budget Office of the Federation, Ben Akabueze; Partner, Tax Reporting and Strategy, PwC, Kenneth Erikume; chief economist, the coronation of Merchant Bank, Chinwe Egwim and economist, United Nations, Nonso Obikili.

Chizor Malize, the host, and managing director/ceo of FITC, in her opening remarks, 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 the fate of organizations, businesses, and the economy.

Malize stated that 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.

Moreover, Malize revealed 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 said.

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Abiodun Adedipe, chief economist and md/ceo, B. Adedipe Associates Limited, 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 the monthly import bill of N3.66 trillion or $8.9 billion in the 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 the second quarter of 2020 to the third quarter of 2021. Imports did not relent even during the recession, expanding steadily since the 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.

Besides, he stated 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 asking, what do Africans import? Where do they import from? This will then become our own focus for export,” he said.

Ben Akabueze, director-general of the Budget Office of the Federation, highlighted the need to diversify the tax net and increase the 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 the 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.

Akabueze blamed the structural imbalance in the country’s economy as one of the reasons why the 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 percent 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,” he said.

Kenneth Erikume, the partner, PwC, expressed 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 in the long term, companies should be taxed based on the economic outcomes of the businesses they have done,” he said.

FITC, owned by the Bankers Committee such as CBN, NDIC, and all deposit money banks in Nigeria was 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 a recipient of the International Federation of Training & Development Organisations (IFTDO) ‘Change agent in learning and development in Africa’ Award, 2020 Business Excellence Award (The BIZZ Award), 2020 Strategy Innovation & Change Award, The International Business Excellence (IBX) Award, 2021 Winner, Global Business Excellence Award, among others.