The group managing director of United Bank for Africa, Oliver Alawuba has said Nigeria needs to take deliberate efforts to address major challenges facing the country, including insecurity, high inflation pressure, enhancing ease of doing business and access to finance for her to achieve the $1 trillion economy target of the current administration.
The UBA boss said the authorities should do something to significantly improve the nation’s infrastructure deficit and create access to finance for businesses to thrive and create wealth. He stated that Nigeria’s high cost of energy and 27.5 percent interest rate are part of the factors that confront businesses in the country.
Alawuba said for Nigeria to attract the needed investment, it must also deal with the issue of cyber insecurity which he said poses a major challenge to the banking sector. “We need a lot of collaboration to stop the high rate of cyber insecurity,” He stated yesterday in a paper presentation titled: Banking Recapitalisation Towards a One-trillion Dollar Economy – The Industry Perspective’.
However, he disclosed that the banking community is already collaborating with the Office of the National Security Adviser on raising special purpose funds to curb the losses to cyber insecurity. He said there is a need for the NSA’s office to collaborate with the regulators and the Bank’s to build a strong platform against internet fraudsters.
He said, by 2029, the GDP of Nigeria will be $260 billion, hence, a gap of $740§billion if the country continues to grow its GDP at the current pace. This, he said, makes the targeted $1 trillion economic target far from realisable.
He requested the fiscal and monetary authorities to work at a faster pace to reset the economy through policies and policy implementation that will push the country to realise its targeted $1 trillion economy.
The doyen of bank MDs urged the Central Bank of Nigeria to give incentives to the banks for long term lending. “Long term lending is very critical for this economy to grow. We can incentivise long term funding through CRR maybe 20 per cent of it. We need some incentives that will enable the industry to operate smoothly,” he stated at the 36th edition of a CBN-organised seminar for Finance Correspondents & Business Editors in Abuja.
“Power is a major challenge for us to attain a $1 trillion economy,” he stated while also pointing to Nigeria’s low financial inclusion situation as a problem. He said Nigeria needs to get everyone into the financial sector, adding that a situation where a large chunk of the nation’s currency is outside of the banking system would help to deny the country of its $1 trillion target. “It will become difficult for monetary tools to work when a large chunk of money is outside the banking system,” he stated.
Alawuba said Nigeria must urgently change from a primary economy that only exports raw materials to a manufacturer or producer of finished goods. “If we have to achieve a $1trn economy, we have to move from a primary economy to secondary, tertiary economy by adding value to our raw materials to create jobs,” he said at the event.
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