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Avoid flip-flop to restore confidence in economy, FG advised

By Geoff Iyatse
16 May 2022   |   2:36 am
The Managing Director of FSDH Merchant Bank, Bukola Smith, has urged the government must avoid policy flip-flops to restore confidence in the economy with a focus on the investment market.

Agro Business, Corporate Banking, FSDH Merchant Bank; Onyinye Ilechie(left); Head, Corporate Banking, Kunle Osunkunle; Strategy and Business Development Manager, NEXIM, Folashade Aluko; Executive Director, IT, Operations and Compliance, Taiwo Otiti; Managing Director/Chief Executive Officer, all of FSDH Merchant Bank, Bukola Smith;Senior Consultant, 3T Impex Consulting Limited Bamidele Ajemibo and Group Head, Corporate Banking and Branches, FSDH Merchant Bank, Stella-Marie Omogbai, during FSDH Breakfast Session on the CBN RT200 Scheme for Export Trade in Lagos .<br />

•‘COVID-19 scenario reflects future of oil’

The Managing Director of FSDH Merchant Bank, Bukola Smith, has urged the government must avoid policy flip-flops to restore confidence in the economy with a focus on the investment market.

Speaking at the bank’s breakfast series, which focused on RT200 Foreign Exchange Programme, Smith believes consistency in predictable policy direction would raise the confidence of foreign investors, which is necessary to boost foreign exchange earnings.

She noted that policy inconsistency has led to the drastic reduction in export earnings, a situation that has triggered a deficit in the country’s current account. She challenged the country to strive to bridge the growing gap between imports and exports.

The banker said the government works hard to shore up the country’s dwindling external reserves to avert a major crisis.

The gross reserves dropped to $39.04 billion on Wednesday, the last time it was updated. The figure is the lowest year-to-date (YTD).

Smith told the participants at the meeting that a consistent fall in the reserves was a major red signal the national economic managers could not continue to ignore.

If the RT200 scheme is properly implemented, she said: “It will help us to earn more sustainable FX, reduce exposure to volatile FX, increase export, which we need to achieve and help to diversify from oil.”

According to her, unstructured procedure, corruption and rejection of the country’s exports are some of the threats to the scheme. These, she said, must be addressed urgently as necessary steps towards making a success of the initiative.

Bamidele Ayemibo, a trade expert, who gave a keynote at the series, charged the country to urgently tackle the conception risk posed by overdependence on crude as a source of FX earning.

Ayemibo picked on the height of the COVID-19 crisis in 2020 when oil prices dropped to a negative region, saying that it represents the future of hydrocarbon.

Arguing that non-oil export is the most sustainable FX earner at the moment, he pointed to people, process and payment as some of the most challenged areas that must be addressed to grow the non-oil economy.

The expert said the impacts of the Russian-Ukraine war are real with “countries that are ready already taking advantage of the supply gap created by the crisis”.

He noted that Nigeria could leverage the challenge to its advantage but added that hard decisions have to be made to catch up with what other countries around the world are doing in that regard. Part of the quick actions that must be made includes growing value-added products, which will require agro-processors partnering farmers.