FSDH Merchant Bank has called on the federal government to focus on addressing pressure points in the nation’s economy as a priority after the conclusion of the presidential election.
Making this call at the media presentation of the bank’s monthly economic and financial market outlooks, Head of Research, FSDH Merchant Bank, Mr. Ayo Akinwunmi noted that the Nigerian economy is not expanding enough to lift citizens out of poverty and it therefore it needs to expand faster than it is at the moment”.
He said: “Following the conclusion of the presidential election, FSDH Research believes there are pressure points in the Nigerian economy that the Federal Government of Nigeria (FGN) must quickly address in order to stimulate broad based and strong inclusive growth. FSDH Research notes that Nigerian economy is not expanding enough to lift citizens out of poverty. Therefore it needs to expand faster than it is at the moment.”
He said the economic pressure points identified by the bank include: weak disposable income in the country; high unemployment rate in the country; weak infrastructure development in the economy that may not support the growth ambition of the FG; economic depression in the real estate sector of the Nigerian economy; fragile foreign exchange market and weak revenue generation for the federal government leading to large fiscal deficits.
In order to address these pressure points, the bank called for removal of all administrative delays in obtaining licenses and approvals including titles to landed properties for building and agricultural purposes.
To revive the depression in the real sector, bank advised the federal government support the provision of long-term mortgage loans at concessionary terms for workers to activate the economic activities in the real estate sector in Nigeria. The bank also called for investment in data generation in the solid mineral sector, adding that government can sell the data to potential investors interested in the sector and this will help to reduce the risk inherent in the sector FSDH Merchant Bank also recommended adjustment of the electricity tariff to reflect current costs in the economy and to enable the sector attract investments and guarantee efficient metering system. It also called for removal of the “subsidy” on the Premium Motor Spirit (PMS) to free up more resources to critical sectors of the Nigerian economy and to drive competition among the operators and attract investment in the sector.
Speaking on the bank’s recommendation for reduction in duties on imported vehicles as part of measures to address the pressure points, Akinwunmi said: “This is to avoid high cost associated with brand new cars in the country so that Nigerians are not pushed to buy fairly used vehicles with their associated negative environmental impacts. While we understand the need for the government to use the import duties to encourage investments in the local auto industry, a graduated import duty policy for a few years, say five years, will be appropriate”