Ayo Teriba, CEO Economic Associates has said that Nigeria has to move from its position as an income dependent country to an asset dependent one to sustain the economy.
He made these remarks on Thursday at the Vanguard Economic Discourse in Lagos.
Speaking on the theme, ‘Reforms in the Era of Global Economic Uncertainty: Whither Nigeria,” he said that Nigeria could borrow a leaf from India who has hinged their economy on assets rather than exports to grow their gross domestic product.
“The reality of post industrial transition is that output dependence within the past has been replaced by asset dependence. India has gone from being the 10th GDP in the world to the 5th, because they are connecting global liquidity to their local assets.”
“And I had the CEO of Invest India say that since 2015, they have attracted $500 billion in FDI. So it doesn’t matter what they lose from exports, they are able to generate more because they turn to assets,” he said.
Nigeria has as much as N180 trillion trapped in dead assets mostly in real estate, according to PwC’s estimates.
Unlocking that capital could drive Nigeria’s economic growth and GDP, Teriba said.
“We can leverage real estate assets, and infrastructure. We are the only big economy in the world that constructs airports but not terminals, where 40% of the revenue in aviation is made. Investors will jump at the opportunities of terminals,” he stated.
As regards the volatility in the FX market, he asked that the CBN must beef up the nation’s FX reserves to stabilize the naira and support a $1 trillion dollar economy.
“The CBN is tightening the monetary stance but we can all see that the reason the FX market is volatile is that the reserves are insufficient. What are they doing to ensure that Nigeria also builds up reserves that will support a trillion dollar economy. Tightening the monetary stance without improving reserves adequacy is futile. What are we doing to improve it to a $16 billion reserve level,” he said.
He further said that the Tinubu-led administration cannot afford to fail owing to the fact that Nigeria is being led for the first time since 1999 by civilians rather than retired military officials.
“The unique feature of this administration since the democratic transition in Nigeria in 1999 is that this is the first time Democrats are leading. Ironically, Nigeria’s transition, produces retired military officers as heads of state,” he said.
