A leading economist and financial derivatives analyst, Bismarck Rewane, has predicted that Nigeria will start to experience a ‘slow’ but ‘painful’ recovery process from the current economic recession rocking the nation in July 2017.
He disclosed this while addressing the media on the state of Nigeria’s economy.
Rewane noted that the government’s quest to increase the sources of revenue, increase the tax net, block leakages, and emphasise spending on capital projects will have a multiplier effect and have a trigger point on the growth the economy, which is a surefire approach to take any country out of recession.
He said that the results from those various interventions the federal government has put in place to exit the nation out of recession will become ‘visible’ as from the third quarter of 2017.
The economist said the value of the Naira is in a better position today than it was a few days ago having gained almost two or three percent, because there is a move in the right direction made by the Central Bank’s determined effort to reform the foreign exchange market which was in shambles before now.
He encouraged Nigerians, as a people affected by the economic quagmire rocking the nation, to increase their productivity and go from protecting their businesses from competition to actual competing so that Nigeria can be competitive both domestically and internationally.
Rewane said: “Nigeria will start a slow but painful recovery process in the third quarter of 2017. This point in time, Nigeria is spending 34 Kobo on every Naira to pay interest on debt. This interest is being used to pay Treasury Bills, to fund a borrowing programme which is not sustainable mainly for consumption.
“The minister of finance has stated clearly that we cannot sustain this policy. So, what are they doing to increase the sources of revenue; trying to increase the tax net; trying to make sure that they block leakages; also trying to emphasize spending on capital projects which will have a multiplier effect and have a trigger point on growth. This is what is happening.
“We are in a better position today than a few days ago. About three days ago, the Naira traded at N520 per Dollar but today it trading at about N500/Dollar. Essential, it has gained almost two or three percent, because there is a move in the right direction. Baby steps were made major monumental shifts in direction
“So what we are seeing is the Central Bank determined to reform the foreign exchange market which was in shambles before now. What they should have done in June last year they are doing now.
“The road to hell is paved with good intentions but intentions can be stated but the reality; that is, the sweetness of the food is in the eating. Nigerian people have to make a conscious effort to ensure that they increase productivity and go from protection to competition so that Nigeria can be competitive both domestically and internationally.”