The Chartered Institute of Bankers of Nigeria (CBN) and B. Adedipe Associates Ltd (BAA) with other industry finance experts have x-rayed Nigeria’s economy, as well as provided ways for the nation’s to get out of the current economic downturn in 2017.
In a paper presented at the CIBN economic outlook for 2017, by a renowned economist, Dr. Biodun Adedipe, tittled: “The Nigerian Economy and 2017 Outlook”, said that a moderate recovery is expected for 2017, with receding obstacles to activity in commodity exporters and solid domestic demand in commodity importers.
He explained that stagnant global trade has subdued investment and heightened policy uncertainty in the country, stressing that weak investment is weighing on medium-term prospects across many emerging markets and developing economies (EMDEs).
Although fiscal stimulus in major economies, if implemented, may boost global growth above expectations, risks to growth forecasts remain tilted to the downside. Important downside risks stem from heightened policy uncertainty in major economies.
According to World Bank, Nigeria’s 2017 Economic Prospects has growth rate among oil exporters in Sub-Saharan Africa contracted by 0.2 percent in 2016 from 2.9 percent in 2015.
“Growth in Nigeria slowed down by 1.7percent in 2016 due to: Foreign exchange shortages fall in oil production, security, intermittent power outages and low commodity prices.”
However, this slowdown in growth led to reduction in import which offsets more than 50 percent of the fall in oil exports.
Adedipe, noted that in 2017 the Nigeria’s GDP is expected to grow by 1.0percent which will launch the country into recovery.
Exchange rate adjustment and improvement in oil prices (averaging $43pb in 2016) will moderately boost revenue in 2017. With budget already reflects the former – N197 to N305/$.
He added: “External factors like policy uncertainties in US & Europe and unexpected slowdown in China could adversely affect economic activities in 2017.”
Commenting on the importance of government spending pattern in economy recovery, he said that capital spending is priority, and more on infrastructure rather than acquisition of office equipment.
According to him, some N753 billion released between June and October 2016, nothing as much as this when annualized for full year in the last one decade.
“The scope for leakages and corrupt enrichment of public officers has reduced significantly through the effective deployment of the TSA.
“Generally, the Federal and State Governments have intensified collection of hitherto ignored Internally Generated Revenue (IGR)”, he explained.
Earlier in his welcome address Professor Segun Ajibola, President/Chairman of Council, CIBN, noted that the positive side of the International Monetary Fund (IMF) and Moody’s credit rating agency have both predicted that Nigeria would rebound from recession in 2017, adding that the rate at which GDP grows is up for debate.
According to him, the IMF forecasts a 0.percent growth rate while Moody’s predicts a 2.5percent growth in 2017.
“These positive forecasts would be fuelled by the recent increase, albeit marginal, in the global prices of oil. Recent data indicates that on the first day of trading in 2017, crude oil prices hit $58.37 per barrel. This is the highest price on record since July 2015.
“Another positive event to note is the timely presentation of the proposed 2017 budget on December 14, 2016 which has been dubbed the budget of “Recovery and Growth”. This action would contribute to improved investors’ sentiment as the budget, signifying government’s economic direction, serves as the blueprint for any economy in a particular year. The relatively early release of the budget also further ignites the hope of an early exit from the current economic recession”, he said.