By Chinwendu Obienyi
TO enable Nigeria boost capital repatriation by its citizens in the diaspora, the Federal Government and the Central Bank of Nigeria have been enjoined to enhance the sources of FX inflow sources including crude oil sales, capital importation and diaspora remittance through supportive fiscal and monetary policies.
According to Afrinvest’s 2023 Nigerian Banking Sector Report titled; “Getting Nigeria to Work Again” which is to be launched in Lagos today, a supportive fiscal and monetary policy will incentivise new investment in the oil & gas sector, restore foreign investors’ confidence, and encourage more capital repatriation by the Diaspora.
The yearly report, which has, for years, shaped the direction of market developments and given clear guidance to domestic and foreign investors on the state of the economy, in a bid provide the same advantage to financial market players and economic managers, noted that over the last 12 months to September 2023, CBN’s regulations have largely focused on improving the operating environment for banks and OFIs in line with changing global dynamics, incentivising financial services integration, and restoring sanity in the post-botched Naira redesigned policy implementation.
The report said that the potential gains from these moves would only crystallise if major FX inflow sources – crude oil sales, capital importation, and diaspora remittance – are enhanced by supportive fiscal and monetary policies that would incentivise new investment in the oil & gas sector, restore foreign investors’ confidence, and encourage more capital repatriation by the Diaspora.
The report, providing a way out of current economic difficulties faced by both government and some private sector operators especially with the ongoing acute dollar crunch, believes that the same approach coupled with efforts to checkmate insecurity, curb oil theft, tame inflation, anchor market yield on Monetary Policy Rate (MPR), will improve the business environment.
“Also, we believe that the sustained high demand for FX in the parallel market due to lingering weak supply in the official market, coupled with inefficient processing time, would continue to undermine the objective of these measures. As regards the impact of the measures on the banking industry, we expect the re- introduction of the willing buyer, willing seller model to support a modest positive upside for the FX transaction income of banks going forward,” the report said.
The report also highlighted the need for the new CBN leadership to be geared towards reversing the unorthodox policy measures of the last administration, restoring market confidence in the CBN’s autonomy, and prioritising the core goals of price and exchange rate stability.
“Nonetheless, we believe that achieving all of these in a short-term would be a herculean task, given that complementary fiscal policy actions are required for the CBN to record gains,” it said.
The launch of the report is expected to attract dignitaries from private and public sectors, market leaders and stakeholders in the financial sector, who will discuss key issues necessary to get the country’s economy back to the path of growth.
The Special Guest of Honour, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, will use the opportunity to present steps being taken by the government to stabilise key segments of the economy.
Panelists for the event include Founder/Chief Executive Officer, Outsource Global, Amal Hassan; Chief Executive Officer, Pinnacle Oil & Gas, Robert Dickerman; Co-founder/Chief Operations Officer, Piggyvest, Odunayo Eweniyi; Head of Service, Edo State Government, Anthony Okungbowa and Director, Corporate Affairs, TGI Group, Sadiq Kassim.
Managing Director, Afrinvest West Africa Limited, Ike Chioke, said the report would provide insight on global economic review and outlook, global monetary policy review and outlook, global banking sector performance and outlook, evolving trends in the global banking industry and domestic macroeconomic review and outlook.
Issues will revolve around domestic forex market performance and indicators, price stability, insight on the strategic agenda for new Central Bank of Nigeria Governor, Dr Olayemi Cardoso.
“As the new CBN leadership takes over, Nigerians and the banking industry are on the lookout for a positive and timely turnaround of stifling banking regulations and major monetary indices – exchange rate, inflation rate, and Foreign Portfolio Investment & Foreign Direct Investment flows,” the report said.