Economic Growth May Hit 2.2% this Year, Rewane Predicts
The Chief Executive Officer of Financial Derivatives Company Limited, Mr. Bismark Rewane, says economic growth in Nigeria may hit 2.2 per cent this year, notwithstanding the upcoming general elections. He posited that the economic growth would be positive this year but added that this might not make a difference in the life of the average Nigerian.
Rewane, who spoke at the 2018 Standard Bank Group West Africa Investors’ conference held in Lagos, stated that the Nation’s trade balance would rise to $9Bn this year from the $7Bn recorded in 2017. The economic expert also noted that non-performing loans were going to be on the decline this year.
The theme of the conference was, “The pathway toward inclusive economic growth.” He said, “This year, we should think of the impact of the economy and not the economy. We are happy that some international investors are in the summit and they are looking at Nigeria this time. Nigeria just successfully raised $2.5Bn in addition to the previous Eurobond issues.
“This means that at a time like this, 12 months from the elections, we are still able to raise money at favourable rates. Then that’s credit to the Federal Ministry of Finance for its revenue raising strategy, but the important thing now is how to apply these revenues and invest it rather than consume it.”
Bismarck stressed the need to invest the funds in a manner that would impact the ordinary citizens, noting that the gap between citizens in the urban and rural parts of the country is becoming bigger. He said, “Generally speaking, the economy is beginning to limp out of recession. It’s not fully back on the track which means that there is work to be done to sustain this.
“There is a need for the National Assembly to compromise quickly so that the budget can be passed and the Government can get to work and everybody can be on board to ensure that this economy sustains its returns. If not, it’s going to be very difficult as urban unemployment is at 45 per cent.”
He added, “Oil revenue will hit $44Bn this year and Oil price will fluctuate between $60 and $65 per barrel. There will be money supply growth at 7.2 per cent, though Government revenue will be slow but collection will improve through the Voluntary Asset and Income Declaration Scheme.”
The FDC boss predicted that the exchange rate would be stable within N360 and N370 band, while noting that interest would fall as the Nation approaches the general election. “The exchange rate at N396/Dollar can be the worst-case scenario but because all our revenues are strong and productions are going to be sustained, I doubt that we are going to face that headwind at this time though policies and the economy will be driven by political considerations,” he said.
The Chief Executive Officer, Stanbic IBTC Bank, Mr. Yinka Sanni, praised the participating investors for choosing to invest in the Nigerian economy. “For those that have already invested in Nigeria, I have no doubt that you are very happy with your decisions and that you have outperformed, depending on what you invest in,” he said.