Rewane Expresses Worry over Nigeria’s Fiscal Deficit of N8.92trn
By Dipo Olowookere
Renowned economist and Managing Director of Financial Derivatives Company Limited, Mr Bismarck Rewane, has expressed worry over the fiscal deficit of Nigeria.
Speaking on Monday at a webinar hosted by Stanbic IBTC Holdings Plc, a member of Standard Bank Group, the member of the Economic Advisory Council (EAC) of President Muhammadu Buhari said Nigeria’s expenditure currently stands at N19.63 trillion while its revenue stands at N10.71 trillion. This means Nigeria’s fiscal deficit stands at N8.92 trillion.
He further disclosed at the event themed 2022 Virtual Economic Outlook- Investing and planning in an election cycle that the fiscal deficit translates to an increasing level of poverty, inflation, unemployment and the number of out-of-school children.
Mr Rewane noted that the number of fully employed Nigerians had dipped by 54.41 per cent in the last five years and the working population grew by 18.45 per cent, while 50 per cent of Nigerians remain idle.
Highlighting Nigeria’s fiscal position in five years, he noted that while oil prices increased by 62.36 per cent; currency and balance of trade weakened by 239.76 per cent and 35.95 per cent respectively, with gross external reserves gaining 39.29 per cent.
According to him, sustained supply concerns have helped to shore up global oil prices above $80 per barrel while the Central Bank of Nigeria (CBN) has continued to step up its intervention programme in the forex market as the nation’s gross external reserves continue to dwindle. Also, he said, the naira has continued to witness increased pressure due to excess liquidity.
“The nation’s economy is expected to continue its rebound as witnessed in the last quarter of 2021 while oil prices are likely to remain high as major economies re-open fully and oil demand picks up.
“Furthermore, the advent of COVID-19 vaccines has continued to discount the impact of Omicron on oil demand while the effect of the Iran nuclear deal is expected to push up the nation’s oil supply to the global market. This is expected to provide more support to Nigeria’s earnings,” said Mr Bismarck.
“To boost the manufacturing sector, the Central Bank of Nigeria (CBN) is likely to intensify its forex intervention as it seeks to increase supply to manufacturers,
“Also, the CBN is expected to step up efforts towards exchange rate convergence, increase its intervention in the forex market while the postponement of the fuel subsidy removal will dampen the anticipated spike in inflation for the year as trade policies are expected to become less protectionist,” he added.
Also speaking at the event, the Executive Director of Corporate and Investment Banking at Stanbic IBTC Bank, Eric Fajemisin, noted that the lender, through its business advisory services, has continued to help its customers make good investment decisions and provide them with business financing.
On the part of the Executive Director of Business and Commercial Clients at Stanbic IBTC Bank, Remy Osuagwu, the organisation has continued to partner with the CBN in its various intervention programmes such as the Real Sector Fund, Anchor Borrowers Fund, and the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), amongst others.
Commenting, the Chief Executive of Stanbic IBTC Pension Managers, Olumide Oyetan, said the company, through its investment management vehicle, has continued to provide avenues for investors to profitably invest their funds short and long term while ensuring the safety of invested funds.
The Executive Director of Client Solutions at Stanbic IBTC, Bunmi Dayo Olagunju, in her concluding remarks, stated that the economic ecosystem can improve during the election cycle if digital technologies can be leveraged effectively.
Earlier in his opening remarks, the Chief Executive of Stanbic IBTC Holdings Plc, Mr Demola Sogunle, thanked the customers for the confidence and trust reposed in the organisation through their patronage.
He assured Nigerians of valuable and exciting opportunities despite the likely headwinds as the nation prepares for its general elections.
The event was put together to reflect on the economic trends that shaped 2021 and give projections of what to expect in 2022. It also afforded participants the opportunity to learn directly from economic experts on the importance of planning and investment.