Try as much as you want to put a positive spin on the issues of the Nigerian economy, the reality of the situation is that your outcome would not really impress the discerning.
This much came out at the presentation of the 14th Annual Nigerian Banking Sector Report (2019) by Afrinvest West Africa.
Themed Beyond the Precipice: Pulling Back from the Brink, the report is broken into five sections.
Expousing its continents, Afrinvest’s CEo, Ike Chioke observed that quite significantly Nigeria’s 2.2 percent projected growth rate for 2019 was a drag on the continent’s cumulative 3.4 percent projection. As a country also, he noted that the reality was that we may have progressively gotten poorer despite that we have pulled out of formal recession, no thanks to demographic bulge.
He noted that even more recently also, the rate of inflation had begun to risen once again since the border restrictions policy was introduced even as efforts to raise the quantum of government revenues through Production Sharing Contracts, PSC reforms and VAT increases would only in his view at best bring in marginal progress.
The financial services sector player also lamented the expanding security challenges in the country using the example of his technical assistant, Segun Afolabi who was reportedly murdered in his own home earlier in the month, saying the reality of the times in which we live in was that we really needed to find quick and urgent ways to fix the exploding avalanche of problems besetting us as a society so as to yet retain the society overall.
He urged a deemphasis on doing the wrong things, and a shift towards a new focus on doing right and smart things. According to him, the economic prognosis for the year 2020, drawing from the progression through the years was that recurrent expenditure and debt servicing numbers are rising even as capital budget spend would yet go south.
On banks, he noted that Tier 1 banks in particular clearly would have more non-performing loans to contend with particularly in the current era when the Central Bank was engaged in higher Loan-to-Deposit-Ratio LDR targeting on account of their traditional focus on maintaining credit quality. Still on banks, he said that there was also something to be said as regards the relatively skewed sectoral allocation of resources to sectors by banks in their lending patterns relative to the GDP contribution of the sectors. Two sectors that come up for mention here are agriculture and the oil and gas sectors.
He noted that though bank assets and loans disbursements for the essentially 13 publicly traded banks covered in the report were much improved over the outcome from previous years, but it was yet not good enough relative to those in other countries against which they were being benchmarked, and also our real needs as a nation