FG Declares Petrol Subsidy Removal Irrevocable, Rallies Banking Sector
World Bank: With right policies Nigeria can achieve 7% growth Financial sector key to actualising development agenda, says Bagudu Shonubi: Banking industry not doing enough for economy
Vice President Kashim Shettima, yesterday declared that the decision to end the petrol subsidy regime by the administration of President Bola Tinubu was irrevocable as he rallied the financial sector to support current efforts aimed at returning the economy on the path of inclusive growth.
Shettima, said the removal had already increased the amount of monthly revenues distributed among the federal, states and local governments to meet their financial obligations and enable them to serve the people better.
He added that the administration was working towards a future where no leader would grumble over the lack of funds to pay salaries or complete projects.
It came as the Nigeria Country Director, World Bank, Mr. Shubham Chaudhuri, said with the right mix of policies by the government, the potential for seven per cent GDP growth could be unleashed and further taken to double-digit, adding that subsidy removal added about 2.5 per cent to Nigeria’s Gross Domestic Product (GDP).
Also, Minister of Budget and Economic Planning, Senator Abubabar Bagudu, said the bold policy initiatives currently being implemented by the Tinubu administration would ensure a return to macroeconomic stability, promote inclusive growth as well as lay a foundation for the achievement of double-digit growth in the economy.
In his contribution, the acting Governor, Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi, tasked the banking industry to set a realisation benchmark for contributing to the growth of the economy, particularly in the aspect of enhancing credit to the private sector.
The apex bank boss said though the industry had lived up to expectations in real sector interventions during the COVID-19, its contribution to GDP at 3.6 per cent remained below average compared to the telecommunications industry’s 16.2 per cent.
They all spoke at the opening of the 16th Annual Banking and Finance Conference with the theme: “Nigeria’s Economic Growth and
Empowerment: The Role of the Financial Services Industry” which was organised by the Chartered Institute of Bankers of Nigeria (CIBN).
The vice president who declared the meeting open said the banking industry remained a strategic partner in actualising the present administration’s eight-point agenda aimed at repositioning the economy.
He said the agenda cannot be successfully implemented by the government without the cooperation of the financial sector, assuring that the government would not take their support for granted.
Promising hope, Shettima also declared that Nigeria, the “sleeping giant of Africa has awakened from slumber”, and described Tinubu as a man of courage who is determined to redefine the concept of modern leadership.
He further stressed that the bold policy actions so far taken by the government including the foreign exchange convergence and subsidy removal were taken in the best interest of the economy.
The VP said rather than the lack of potential, leadership remained the missing link adding that Tinubu was prepared to fill the gap.
He noted that the future of the country was in the ability of the youths to take advantage of digital technologies coupled with the country’s ability to apply value addition to raw materials for export.
To this effect, Shettima said the federal government was partnering with the banks to impart digital skills to the youth as well as develop the economy.
Bagudu, however, pointed out that the financial sector was indispensable in achieving double-digit growth which he said was realisable, adding that the actions so far embarked upon further buttressed the seriousness of the government to grow the economy.
The minister said the banks were well-positioned in helping to actualise the government’s promises to Nigerians, especially in the areas of enhancing access to credit that would stimulate economic activities.
He also said going forward, the nation’s budget would be plan-based and well-monitored.
While acknowledging the contribution of the financial sector to the economy, he said more was required from them.
Nonetheless, in his keynote address, the World Bank country director said for Nigeria to accelerate growth, public spending must be raised to between 15 per cent and 20 per cent of GDP, adding that it currently remained low at 12 per cent in the last five years.
He also said financial intermediation by banks to the real sector needed to be improved from the current 15 per cent to 40 per cent in peer economies.