Vice President, Kashim Shettima, Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, and key economic stakeholders have underscored the urgent need for comprehensive reforms and strategic asset management to navigate global economic uncertainties and ensure long-term stability and growth for Nigeria.
They spoke, yesterday, at this year’s edition of the Vanguard Economic Discourse, which has the theme, ‘Reforms in the Era of Global Economic Uncertainties: Whither Nigeria?’
Shettima, who was represented by Special Adviser to the President on Economic Matters, Dr Tope Fasua, said Nigeria’s challenges include insecurity, energy instability, food insecurity, and high inflation.
He, however, assured that the administration of President Bola Tinubu was tackling the problems with robust policies and initiatives designed to foster economic stability and growth.
He praised the action of the administration in addressing overdrafts accumulated during the pandemic, classifying them properly within the national debt framework, and ensuring the sustainability of new debts.
According to him, these efforts have contributed to a recent upgrade in Nigeria’s sovereign rating by leading global rating agencies.
Cardoso highlighted several global factors impacting Nigeria’s economy such as tight financial conditions due to efforts by monetary authorities to control inflation, shifts in investment flows from developing economies to safer markets amid rising risks and significant disruptions in energy and supply chains, and financial markets exacerbated by geopolitical conflicts such as the Middle East and Russia-Ukraine war.
He also outlined global economic turbulence driven by political fragmentation, increased protectionism and trade barriers that began during the COVID-19 pandemic, contributing to uncertainties in global trade as well as growing global debt levels, particularly among developing countries.
Cardoso, who was represented by Director (Risk Management), Blaise Ijebor, noted that these factors have elevated global uncertainties, impacting economic growth and financial stability.
Cardoso said CBN is committed to several key reforms aimed at stabilsiing the economy, such as tightening monetary policy to curb inflation, liberalising the foreign exchange market to enhance transparency, reducing arbitrage, promoting stability, improving liquidity and raising the capital requirements for banks to enhance financial system stability to support the $1 trillion economy envisioned by President Tinubu.
He revealed that measures are also being taken to increase diaspora remittances through official channels and improve liquidity in the FX market, adding that revised guidelines for Bureau de Change (BDC) operations are being implemented to ensure their proper role in the FX market, with licenses revoked for non-compliant BDCs.
Cardoso said as part of the CBN reforms, 14 new International Money Transfer Operators (IMTOs) have been licensed to enhance competition and efficiency in the FX market.
On his part, the Chief Executive Officer of Economic Associates, Dr Ayo Teriba, emphasised the need for Nigeria to move from income-sensitive to asset-sensitive strategies to ensure economic resilience and growth.
He said relying on GDP or income to generate the resources needed to run governments belongs to the past. He pointed out that Nigeria’s GDP has declined from $600 billion in 2015 to $350 billion currently, a trend mirrored by industrial giants like Japan and Germany.
Teriba noted global examples like the United States and India, which have successfully leveraged their assets to attract substantial foreign direct investment (FDI) and sustain economic growth despite declines in export revenues.
He said India has attracted $500 billion in FDI since 2015 by focusing on asset leverage, noting that Nigeria has valuable assets that are currently underutilised,
He called for a re-evaluation and market exposure of state-owned companies and real estate, citing Saudi Arabia’s success with Aramco as a model, now valued at over $2 trillion.
Teriba also identified Nigeria’s infrastructure, including airports and power transmission systems, as key areas where investment and asset leverage could drive growth.
“We are the only major economy that builds airports without terminals. Terminals generate 40 per cent of aviation revenue and provide numerous investment opportunities,” Teriba said.
