Stanbic IBTC seeks policy options for fiscal stability
The Chairman, Stanbic IBTC Bank Plc, Atedo Peterside, said for a quick return of investor confidence in the country, there must be a clear focus on espousing credible policy options that would enthrone a regime of fiscal stability.
Besides, he noted that revenue must be sourced from places beyond oil and without stifling an already fragile economy, while spending must become much more efficient.
The bank chief, who was speaking at the 2015 Standard Bank West Africa Investors’ Conference, with the themed “Nigeria: From Promise to Progress”, said the forum was focused on investors seeking up-to-date insight into market-shaping events and trends in Nigeria.
Peterside said fiscal stability has become imperative given the Central Bank of Nigeria’s recent capital controls and other forms of foreign exchange rationing, as well as some innovative bailout arrangements, which were in response to a wide variety of monetary and fiscal shocks.
“We are a populous and youthful nation that is endowed with a vibrant private sector. This presents both a tremendous investment opportunity as well as a worrying spectre of instability if resources and expectations are not properly managed,” he said.
He noted that Nigeria has gained significant political goodwill both at home and abroad on account of its unprecedented, yet peaceful political transition at the Federal level.
“Nigeria needs to find ways for public and private capital to effectively collaborate in order to deliver the tangible economic progress that is urgently required,” he stated.
He pointed out that the scope for fiscal stimulus is severely limited, saying that the most promising changes that will impact revenues must come through price adjustments in overly distorted markets such as those prevailing in segments of the downstream petroleum sector.
Nigeria needs significant investment into its agriculture sector, both in terms of research and development and capital. The sector is critical for diversifying the source of foreign exchange, food security and the support and development of SMEs.
“Oil and gas will remain critical to the government’s finances for some time to come and the ‘gas’ part of this equation needs to be far more effective than it has been in the past.
The transition from import dependency to domestic production cannot be instant, but requires a steady expansion of the productive base…as well as systematic skills acquisition, while investments need to be credible, clear and sustainable beyond the tenure of a single administration.
Financial institutions are essential to support the nation’s growth ambitions. They must be able to appropriately balance risks and returns as they grow, while attaining the resilience to support the economy, he added.