L-R: Business Editor, Lagos Television Joshua Morakinyo, Head, Strategy and Research, Nigeria Inter-Bank Settlement Systems plc, William Uko; Chairman, Finance Correspondents Association of Nigeria (FICAN) Chima Titus Nwokoji; Deputy Director, Bank Examination NDIC Emma Udechukwu, Group Chief Financial Officer, Parthian Partners, Olayinka Arewa and Divisional Head of Services, Bank of Industry, Isa Omagu, at the Finance Correspondents Association of Nigeria (FICAN) 2024 annual conference, in Lagos recently.
Finance and banking experts convened at the Finance Correspondents Association of Nigeria (FICAN) 2024 annual conference, discussing the feasibility of Nigeria’s vision to achieve a $1 trillion economy by 2026. The panel, comprising industry heavyweights, explored the implications, challenges, and the pivotal role of the banking and fintech sectors in realizing this ambitious target.
The session featured insightful contributions from Business Editor, Lagos Television, Joshua Morakinyo; Head of Strategy and Research at Nigeria Inter-Bank Settlement Systems plc, William Uko; Chairman of FICAN, Chima Titus Nwokoji; Deputy Director of Bank Examination at NDIC, Emma Udechukwu; Group Chief Financial Officer of Parthian Partners, Olayinka Arewa; and Divisional Head of Services at the Bank of Industry, Isa Omagu.
The central question posed to the panel was, “How feasible is it to have a $1 trillion economy by 2026 given the current volatile economic situation?”
Visionary Leadership Needed for Economic Growth
Joshua Morakinyo highlighted that President Bola Tinubu’s audacious vision for a $1 trillion economy could set a positive tone for the nation. “There’s something about leadership that raises the bar beyond technicalities. The president’s vision is bold, and although it seems challenging, it’s possible. Leadership like this sets a tone that pushes everyone to bring their best efforts forward,” he stated. Morakinyo underscored the importance of a collective effort from all sectors to actualize the president’s vision.
The Role of Bank Recapitalization
Chima Nwokoji focused on the importance of bank recapitalization in achieving the economic target. “Recapitalization is vital for financial intermediation, which is necessary for economic growth,” he said. According to Nwokoji, a buoyant banking sector is essential to support credit extension and investment in the real economy, especially as Nigeria navigates the challenges of growing to a $1 trillion economy. “If banks are undercapitalized, they cannot support the real sector effectively,” he added.
Fintech’s Contribution to GDP Growth
William Uko emphasized the role fintechs play in digitizing financial transactions and reaching underserved markets. “Fintechs are crucial for driving GDP growth, especially by supporting small-scale enterprises and increasing financial inclusion. They enhance agility in the economy, driving up productivity and contributing significantly to the GDP,” he said.
Uko drew comparisons to past recapitalization efforts, noting how a fragmented banking system was transformed into globally competitive financial institutions through decisive actions. “We did it before in 2004, when people thought it was impossible. Today, our banks compete globally, and fintechs are a critical part of that evolution,” he explained.
Challenges in the Real Sector
Emma Udechukwu, Deputy Director of Bank Examination at NDIC, focused on the challenges facing Nigeria’s real sector. “Without the real sector functioning effectively, we can’t achieve significant economic growth,” Udechukwu explained. He highlighted issues in manufacturing, agriculture, and other productive sectors, calling for targeted policies that address the specific challenges hindering growth in these areas. Mr Udechukwu also pointed out that the Central Bank of Nigeria (CBN) and the NDIC have introduced policies like the Loan-to-Deposit Ratio (LDR) to encourage banks to support the real sector. “Banks are now required to allocate a certain percentage of their deposits to support the real sector, and this policy has helped channel credit to the right areas,” he added.
The Importance of Real Sector Revival
According to Olayinka Arewa, Nigeria’s pathway to a $1 trillion economy requires reinvigorating the real sector. “Many companies have shut down, and small producers are struggling. To move towards this $1 trillion goal, we must eliminate barriers and challenges facing our industries and households,” he said. Arewa also called for policies that encourage production and infrastructure development to drive growth.
The consensus from the FICAN 2024 panel was that while the $1 trillion economy goal is ambitious, it is achievable with the right mix of leadership, financial sector reforms, and a focus on revitalizing the real sector. The banking and fintech sectors, along with robust policies to support industries, will be key drivers in Nigeria’s pursuit of this economic milestone.
Ultimately, the experts agreed that achieving a $1 trillion economy is not just about hitting a financial target; it’s about creating a more resilient, productive, and inclusive economic landscape for the country.
