Economic experts have warned Nigeria not to be carried away by the influx of foreign portfolio investment dominating the Nigerian Stock Exchange (NSE), noting that a combination of highly mobile portfolio investments and unreliable crude earnings could unravel without warning and cause external reserves to decline, as experienced from April to November 2008.
Besides, they urged the Federal Government to strengthen the non-oil export sector rather than depend solely on rising oil prices. One of them, a financial expert and Chief Consultant at B. Adedipe Associates Limited, Dr. Biodun Adedipe, said as Nigeria approaches the 2019 elections, it is likely that most foreigners would leave the country, and most likely take their investment along due to uncertainty of macro-economic policies.
“We need to do at least 50 per cent of what we did yesterday to get to the historical peak the stock market in Nigeria ever reached, and that was in 2008,” he said. He noted that the euphoria over the seeming Foreign Exchange liquidity is gradually pushing Nigeria to another worrisome strait, adding that the economy could tailspin into trouble if more attention is not paid to strengthening the non-oil sector to truly diversify foreign earnings, and drive down reliance on consumption imports.
Adedipe, during a round table session organized by the Chartered Institute of Bankers of Nigeria (CIBN), tagged the 4th Economic Outlook: “Implication for businesses in Nigeria in 2018,” noted that although Nigeria’s economic recovery is still fragile, most economic agents remain upbeat and optimistic. Meanwhile, the President/Chairman of Council, CIBN, Prof. Segun Ajibola, tasked economic managers to urgently address issues such as the current high unemployment rate, which rose exponentially from 14.2 per cent to 18.8 per cent in 2017.
Delivering his keynote address, the Chief Executive Officer, Nigerian Economic Summit Group (NESG), Laoye Jaiyeola, said for Nigeria to achieve an all-inclusive growth economy, it must prioritise development objectives towards running a knowledge-based economy, increase investments in technology, and improve the quality of lives of its people.
According to him, sectors that would drive growth in 2018 include agriculture, oil and gas; cement and trade, but stressed that oil refining would weigh down growth due to its high operational costs and frequent maintenance of the nation’s refineries, which would persist in 2018, and affect output of refined products.
He noted that the weak relationship between growth and employment calls for concern, stressing that despite the economic growth experienced in 2017, unemployment and underemployment rates rose to 40 per cent as at Q3 2017. He also advised that government policies and interventions must focus on “value-addition” sectors that have the potential to create jobs on a large scale.
The CIBN boss however commended efforts made so far by the present administration, saying the launch of the Economic Recovery and Growth Plan (ERGP) in April 2017, was a step in repositioning the country’s economic fortunes with the banking and finance sector also recording major developments.
In his words,” It is not far-fetched to declare 2017 a progressive year for the Nigerian economy considering especially the enviable manner the country was able to weather the prevailing economic storms at the beginning of the year. After five consecutive quarters of contraction, the country rebounded from recession with approximately 0.6 per cent growth recorded in the second quarter of 2017, inflation dropped from its peak of 18.72 per cent in January 2017 to the current value of 15.98 per cent, the lowest rate in 16 months.”