‘Nigeria’s economy to be driven by oil revenue this year’

A renowned economist and financial expert, Bode Agusto, has predicted that the nation’s economy will gain significant higher grounds this year, but will be driven by the crude oil market.

According to him, though this would be possible because of the rise in oil price, which will oscillate between $60 and $80 per barrel, the government would have to make significant sacrifices to be able to sustain this positive note on the nation’s economy.

Agusto noted this in a breakfast meeting organised recently in Lagos by Ecobank Nigeria Limited, one of the leading banks in Africa, to connect with their customers early in the year and give them ideas and lines of thought on how best to run and grow their businesses in 2018.

He maintained that for the significant growth of the Nigerian economy, which is bound to happen this year to be sustained, the federal government must significantly cut down on needless spending.

“We need fundamental reforms that can stop the growing expenditures, which is well over 100 per cent and leads to no free cash flow for investment in infrastructure.

“There won’t be any significant foreign borrowing this year, but with N5 trillion compulsory spending, which is more than our total revenue, for us to even achieve it, we will have to borrow,” he said.

The Group Chief Executive Officer, Ecobank, Ade Adeyemi, maintained that Nigerians should see the best of opportunities in the market close to them and think of how to increase exportation as well.

“We used to be the largest producers of groundnut in the world. We need to start thinking back about what more we can do to employ a large number of our population that are in the rural areas by creating linkages between what they can do there and the market.

“If we can do that, then it won’t be oil alone. We also need to be ready to support the government by being ready to pay. If we are, the private sector will be ready to participate in infrastructure creation which will reduce the drain on government resources for infrastructure creation,” Adeyemi said.  

The Executive Director Corporate Banking, Ecobank, Akin Dada, reiterated the bank’s goal of setting an early stage for their clients this year with the economic indices and how the budget is concluded, which has impact on their businesses.

”We felt that in partnering with them, we should start with analyzing the economy and how it affects them because for us, it’s how we can help them in doing business in 2018 and that common understanding was very important.

“We are already financing our clients as a bank but it is also important for us and our clients to understand the hurdles in the economy and how to jointly find solutions around them because financing depends on how easy it is for the businesses to generate income and pay us back.”

“So if we are not certain that it will deploy the capital because of some issues in the economy, it may be difficult for them to pay and it will be difficult for us to support them,” he said.