Local savings can help reflate Nigeria’s economy, stakeholders say

The Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, has canvassed the need for the mobilization of local savings to help reflate Nigeria’s economy post-COVID-19.

Ahmed, who spoke during the inauguration of the National Savings Strategy Working Group, in Abuja, weekend, urged members to develop easy instruments that are safe and capable of attracting ordinary Nigerians to key into the strategy.

The terms of reference for the Group include; to study the National Savings Strategy Paper and advise the Federal Government on the feasibility of the proposals or with recommended changes. They are also to identify “ways and means of mobilizing and channelling corporate and individual savings to accelerate domestic capital formation in support of entrepreneurs and enterprise development in the urgent task of diversifying the economy while deepening the capital market.”

It is also expected to draft a National Working Paper that outlines a detailed roadmap on the implementation of the National Savings Scheme, to be submitted for approval to the Federal Executive Council.

Recall that the Capital Market Master Plan proposed the National Savings Strategy (NSS), is one of the key initiatives to drive capital formation and investment necessary to support entrepreneurs and enterprise development for economic diversification and deepening the capital market.

Ahmed said: “Let us not forget the average Nigerian that wants to save and does not have huge sums; we need to develop easy instruments that are safe to be able to attract them. Also take a look at creating a retail savings scheme to allow these Nigerians to save quickly by being able to enter and exit without unnecessary rigors.
 
“We need to mobilize local savings to reflate the economy, increase productivity by creating new enterprises, and ensure that existing ones also thrive.”

She commended the Ag. Director-General, Securities and Exchange Commission (SEC), Mary Uduk, her team, and members of the Capital Market Master Plan Implementation Council (CAMMPIC), for their dedication and commitment to the implementation of the plan.

She expressed optimism that current efforts to review the Master Plan to align assumptions and projections, would redefine the road map for stakeholder participation in the Nigerian capital market.

She expects that when the review is concluded, “we would have a strategic document that provides a clear pathway that would enable the Nigerian capital market to achieve the goal to be Africa’s deepest, most liquid, and largest capital market contributing not only to Nigeria’s socio-economic development but also serve as a global financial hub offering opportunities to other parts of Africa.

In her remarks, Uduk said the Commission had launched a 10-year Capital Market Master Plan in 2015, as a market-wide strategic blueprint that had the buy-in of all stakeholders, aimed at making the market deeper, more vibrant and effective.

Uduk said the implementation of the Master Plan would transform the Nigerian market, facilitate the diversification of the economy, encourage savings, and create wealth.

She added, “This will no doubt grow investors’ confidence, improve the depth and breadth of the market in terms of product offerings, engender market integrity, and contribute to the country’s economic growth.

“I am glad to report that we have taken up the initiatives outlined in the Master Plan document in a systematic manner while engaging with the government, and other critical stakeholders to successfully implement key initiatives while driving the execution of others.”

Uduk further said that the establishment of a National Savings Strategy as outlined in the Master Plan is one of the key strategies to enhancing capital formation by mobilizing domestic funds for investment to drive rapid economic growth.

Also speaking, Chairman of the Working Group, Fola Adeola, noted that savings is one of the fundamentals of highly developed economies, and pledged the readiness of the Group to help drive the Nigerian economy.

“This assignment is coming at a most difficult time as people are worried about the effect of COVID-19 on the economy. But if we get it right now, by the time we ease into good times, we will be better for it,” he added.