Experts in the financial sector have said that an economic recession looms in the third quarter of 2020 due to the coronavirus pandemic currently ravaging the global economy.
To cushion the effect of the recession, they advised, incentives and initiatives should be put in place to attract domestic private sector investments and Foreign Direct Investments (FDIs).
Besides, they said Nigeria needs to diversify into other sectors like agriculture, manufacturing and Small and Medium Scale Enterprises (SMEs), while improving infrastructure to make them work.
The experts, who spoke at an advocacy dialogue Webinar, organised by the Centre for Financial Studies (CFS) of the Chartered Institute of Bankers of Nigeria (CIBN), titled: ‘COVID-19: Tough Choices for Banking and other Businesses’, said banks needed to maintain diversified portfolio, while leveraging on digital and technology solutions to be up to speed.
Managing Director and Chief Executive Officer, Stanbic IBTC Bank, Dr. Demola Sogunle, said Nigerians needed to be merchants of hope while appealing to fiscal authorities to explore initiatives that would attract domestic investment and also FDIs. Sogunle said government’s idle assets should be properly utilised and the oil subsidy backed by law, so that such decision is not reversed all the time.
He said government at the Federal level should find creative ways to get other sectors of the economy to contribute to the Gross Domestic Product (GDP) to diversify away from oil. At the sub-national level, all States should look inward.
For the financial institutions to drive value despite the pandemic, Sogunle said banks needed to decide whether to be fully automated or manually driven because the future of banking is on digital platforms.
He advised that the government should launch fiscal policy supports targeted at the SMEs and find innovative ways to start investing in the nations creative industry, analysts, big data, and artificial intelligence specialists, among others.
The Director General, Nigeria Employers’ Consultative Association (NECA), Olawale Timothy, said employers should be conversant with legal provisions and labour law issues before taking decisions in the world of work, especially regarding health and safety.
Timothy said NECA expected businesses to voluntarily comply with rules recently reeled out for businesses to follow.He called on the Central Bank of Nigeria (CBN) to widen its scope of consultation and to always engage professionals like NECA and the CIBN before reaching any conclusion or decision that would affect the nation’s economy and its citizenry.
Chief Economist/Director Research and International Cooperation, Afrexim Bank, Dr. Hippolytee Fofack, stressed that most economic crises that has affected African countries were exogenous. For instance, the 2008/2009 financial crisis indicated that Africa has been at the receiving end of global shocks.
Fofack said it is important to put in place strategies in order to prevent systemic and direct transmission of global shocks.“As long as we diversify, we would be able to strengthen the Naira. We should also change the dynamics of FDI to long term called patient capital, which would help ensure the stable flow of foreign reserves.”
He said that the channel of remittance, through which revenues are remitted to the government, is a problem, adding that only a small part of revenues get to the government.
He reiterated the need for the government to support intra-African trade by 50 per cent and ensure collaboration between African-member states. Chief Executive Officer, Nigerian Economic Summit Group (NESG), ‘Laoye Jaiyeola, said for businesses, tough choices would also have to be made regarding digital assets as well as working remotely and increasing internal control.