President, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uche Olowu, has urged the federal government to focus on market-oriented policies and create an enabling environment favourable to the private sector.
Olowu stated this yesterday while speaking at a forum on the 2020 Economic Outlook organised by the Finance Correspondents Association of Nigeria (FICAN) held in Lagos.
He advised the federal government to initiate more policies that would increase participation of the private sector, saying this would help catalysed economic growth in the country.
“The only way government can boost the country’s economic growth is to be market-oriented, that is, by allowing the private sector to do more.
“There is no way the public sector can sustain the rebuilding of this economy alone. We need a level playing field, a healthy competition that will be fair, transparent and open to rule of law. If this is done, we will be able to get it right,” he said.
Reviewing last year’s economic outlook, Oluwu said: “In 2019, the economy enjoyed cyclical recovery and consequently there were insufficient growth drivers. And when there were no sufficient growth drivers. Definitely, this would result in imbalanced development.
“So, government should a leap from the 2019 trends. There is need for us to confront reality that our growth requires new drivers in 2020. Development needs to be more inclusive and balanced.
“From my perspective, 2019 was investment-led. That is how to jumpstart the economy and the new drivers of the economy should be investment-led in 2020.
“I support government approach of investment-led strategy and people blaming the government for borrowing are not being sincere because borrowing is necessary in order to grow the economy.”
Speaking on his expectations for 2020, the CIBN boss said: “There would be a gradual uptick in GDP growth between 2.4 to 2.6 percent. Inflationary pressure would continue because the minimum wage was approved. So, there would be an increase in consumer spending. Also, the benchmark interest rate would remain unchanged or it would reduce marginally if at all, so as not to counter the philosophy behind the idea of the government.”
He added: “Also you would have a negative return on savings, but in the long run, you find that creative ideas would see that a pool of funds would directed to the real sector. And as we become productive you would see further decline of interest rates.”
Speaking on his expectations over monetary policy in 2020, Olowu said: “The Central Bank of Nigeria will continue to support the naira and exchange rate will hover between N360 to N365. There will be an increase in consumer spending due to wage increase.
“Unemployment will still be an issue. But given the level of infrastructural development, there may be a decrease in unemployment
“In terms of foreign portfolio inflows, diaspora inflows will continue to trickle in, but foreign direct investments (FDIs) will be subject to government’s inspiring confidence.”