17 September 2015, Lagos – The Chairman, Stanbic IBTC Bank Plc, Mr. Atedo Peterside, has highlighted ways in which Nigeria can reverse its dwindling economic fortunes, stressing that decisive policy steps were vital.
According to Peterside, decisive policies are needed because it is unlikely that an improvement in execution efficiency along the previous trajectory alone will deliver the quantum of new investment activity, economic growth and job creation that is urgently needed to meet the yearnings of the populace.
Peterside spoke in Lagos on Wednesday at the 2015 Standard Bank West Africa investors’ conference, which had the theme, ‘Nigeria: From promise to progress’.
Peterside, who noted the challenges facing the country following the end of the commodities boom and slump in crude oil prices, said the country also needed to find ways for public and private capital to effectively collaborate in order to deliver the tangible economic progress, which was urgently required.
“This has been made all the more important on account of the sharp reduction in government revenues, the high recurrent expenditures and the modest medium-term outlook for revenue recovery as the global oil supply and demand dynamics appear to have shifted permanently on account of the emergence of United States shale oil producers as the new swing producers,” he said.
He explained that of recent, the Central Bank of Nigeria had used capital controls and other forms of foreign exchange rationing as well as some innovative bail-out arrangements as the dominant economic tool for responding to a wide variety of monetary and fiscal shocks.
He, however, noted that in the process, the CBN had increased the uncertainty that investors faced “as they are unable to project or understand how some of these measures can be sustained over time in the absence of severe financial repression.”
To quickly boost investor confidence, he said the new administration must focus on adopting clear and credible policy prescriptions.
These policies, he explained, should be aimed at achieving a credible pathway to fiscal stability, framework for sustained infrastructure investment, accelerated agricultural reforms, and viable, effectively executed industrialisation plan.
Peterside, who noted that oil and gas sector investments were still critical, said there was also the need for a resilient financial sector and continued capital market development.
Commenting on the need for policies to achieve credible pathway to fiscal stability, he said revenues needed to be sourced from places beyond oil without stifling an already fragile economy, while spending must become much more efficient.
He added, “The scope for fiscal stimulus is severely limited and so the most promising changes that will impact revenues must come via price adjustments in overly distorted markets such as those prevailing in segments of the downstream petroleum sector.”
According to him, experts will try to address some of the major challenges facing the country at the investor conference, which is scheduled to end on Thursday.