Experts in the financial sector have called on the Federal Government to improve the nation’s energy sector, value addition for agricultural products and provide suitable business environment to rebound in 2023.
They on Sunday in Ibadan while reviewing the 2022 economic performances.
A financial expert, Mr Tunji Adepeju, said that the country still has the carryover effect of COVID-19, after the lockdown, the ongoing Russia and Ukraine War.
“It has affected a lot of economies, not only Nigeria, but the rest of the world,” Adepeju said.
He said that some of the challenges facing the country grappled included flooding in some states.
According to him, this forced a lot of farmers to abandon their places and led them to the IDP camp; with these, we had a lot of problems as far as food is concerned.
“Coupled with the Academic Staff Union of Universities (ASUU)’s strike, which extended for eight months, affected not only the students, but businesses operating in the school’s environment and many people were out of jobs due to this.
“Also, a high rate of oil theft came to light officially, which was one of the setbacks for the Nigerian economy; even, to the extent that some pipelines were diverted, some were created from the upstream and people were just bunkering oil.
“It affected what the government had budgeted as oil production per barrel per day, as this target couldn’t be met; this, in turn affected the revenue projection,” Adepeju said.
According to him, in 2022 the country also had problems arising from the political parties’ primaries and toward the end of the year, we redesigned the Naira. All these had their effect on the economy.
“To a large extent, one will say poverty is still very much with us. While some people are living in the opulent, majority of the people are living in poverty,” he said.
“On ways forward, Adepeju said the new administration coming on board after the general elections, have a lot of work to do.
“It may have to remove fuel subsidies and people would have to pay the real price; even, now, lots of people are not buying at N175 or N180, but as high as N250 per litre or N300 per litre in some places.
“As Nigerians, we may have to prepare our minds for the removal of subsidies, because, in the end, it will pay us better.
“The government cannot find education alone. The incoming administration has to do a lot to improve transportation; on road, rail and water and provide energy for the populace.
“Government should not pay lip service to agriculture; roads to the farms have to be in good shape.
“Stop turning farmlands into GRA, that is Government Reservation Area, which would be shared among top government functionaries and civil servants, to be sold later on at very exorbitant prices.
“To provide inputs for farmers and encourage value addition, even animal husbandry, government needs to make policies that will make it viable,” he said.
On foreign exchange rates, Adepeju said there was nothing much that the government could do until our refineries were working, because “a lot of dollars go into importation of petroleum products”.
He said, “If our refineries start to work in the first quarter of the year 2023 most likely the exchange rate will drop.”
On currency redesign, Adepeju lamented that some bank executives were not making things to work well, because not many Nigerians have seen the new naira notes.
“If things will go on well, the banks need to push out the bulk of these new naira notes into circulation. The ATMs are still dispensing the same old naira notes.
“Those who want to frustrate the CBN’s Naira redesign project should rethink,” he advised.
Another financial expert, Mr Sola Famakinwa, said that the country’s economy faced a great challenge in 2022 due to high inflation rate and insecurity.
“Others are low revenue in oil, effects of Russia and Ukraine War leading to a hike in food and oil prices,” Famakinwa said.
He cited the World Bank Report that puts Nigeria’s inflation rate as the highest in the world.
“The Report also says an additional six million are now below the poverty line. In 2023, the government should come up with policies that would help the country to overcome the present challenges.
“Also, government should encourage small businesses and the private sector by reducing the tax rate, raising capital with low interest rates, as well as improving the energy sector.
“Increase its export to gain more foreign exchange, improve oil production and reduce oil theft and improve security in the country.
“And fight corruption in both public and private sectors. All these would help to rebound the Nigerian economy,” Famakinwa said.
Also, Dr Kingsley Obiora, the Deputy Governor, Central Bank of Nigeria (CBN), identified COVID-19 as part of the issues affecting the global economy, including Nigeria, as it metamorphosed from a public health crisis to a global economic crisis.
Obiora said that inflation had remained above comfortable levels and that the exchange rate had been under pressure for a while.
“While some have been scapegoating the CBN for the recent dollar exchange rate, it is good to bear in mind that exchange rate mostly reflects our collective decision and action, rather than the policies of the CBN itself,” he said.
Obiora noted that the demand and supply of U.S dollars in the 70s and 80s, compared to now, had increased significantly, hence, the high exchange rate.
The CBN deputy governor said that data from the UNESCO Institute of Statistics, indicated that the numbers of Nigerian students studying abroad increased from less than 15,000 in 1998 to over 71, 000 in 2015 and by 2018 the number had risen to 96,702 students, according to the World Bank.
“Today, a sizable amount of foreign exchange requests, received by Nigerian banks for school fees and even, for primary and secondary schools education are from the neighbouring African countries.
“In light of the above, it is no wonder that foreign education cost the country a whopping 28.65 billion dollars from 2010 to 2020, according to the CBN balance of payments statistics.
“Even, with this staggering amount, it all appears that we are still ever willing to send our children abroad for education that they can acquire at home,” Obiora said.
He said that, according to the UK’s Home Office, which monitored students’ visas to UK, Nigerian students received 8,354 visas in 2019, “and by June 2022, this same office had issued 65,929 visas to Nigerian students.
“If you assume that each of these students needs 40,000 dollars per annum for tuition, flight, accommodation, clothing, food and educational materials, as well as general upkeep, it means that we, as a nation, would need to send an additional £2.3 billion to UK every year.
“These are the realities that put our exchange rate under pressure,” Obiora said.