COVID 19: CIBN urges FG to diversify the economy from over-reliance on crude oil

By Atevure Princess,

Chartered Institute of Bankers of Nigeria

The Chartered Institute of Bankers of Nigeria on Tuesday called on the Federal Government to diversify the economy and review its policy to stir the country away from import dependence and increase non-oil revenue.



The Past President, CIBN & keynote speaker, Mr Laoye Jaiyeola, made the call at an advocacy dialogue Webinar, organised by the Centre for Financial Studies (CFS) of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.


The CIBN Advocacy Dialogue, Series 1.0, was centred on the theme COVID 19: “Tough Choices for Banking and other Businesses”. Other speakers at the event were; Mr Demola Sogunle, HCIB, Managing Director/CEO, Stanbic IBTC Bank Plc, Mr Olawale Timothy, DG Nigeria Employers Consultative Association (NECA), Dr Hippolytee Fofack, Chief Economist/Director Research and International Cooperation, Afrexim Bank.


Mr Jaiyeola, Past President & Director-General of the Nigerian Economic Summit Group (NESG) said the economic outlook for Nigeria was not favourable considering the sharp fall in global oil prices and the impact of the coronavirus on the economy.

He projected a higher inflation rate going forward against the background of forex exchange shortages, devaluation arising from diminishing forex reserves and increase spending by the government to reinflate the economy.

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Jaiyeola called on the government to review its economic policy and ensure a quick diversification of the economy to stir the country away from import dependence and increase non-oil revenue.


Dr Sogunle stated that ‘Nigeria has been hit by twin shocks – the COVID-19 pandemic and declining oil prices.


“In order for us to mitigate the negative impact of the twin shocks, we need to as a country, maintain a delicate balance between saving the lives of our people and growing the economy.” These twin shocks are not necessarily mutually exclusive, and both can be pursued simultaneously.


Dr Sogunle also stressed the need to diversify the economy from over-reliance on crude oil as a source of revenue and focus more on the real sectors such as Agriculture, manufacturing, and SMEs. Besides, Sogunle said that digitization was clearly the way to go and future of banking going forward”


“At the sub-national level, the state governments need to look inwards more to significantly increase their Internally Generated Revenues. ” Of course, there is a need to consistently improve on the level of infrastructure in the country to make these things happen,” he said.


Dr Hippolytee Fofack, Chief Economist/Director Research and International Cooperation, Afrexim Bank urged banks to maintain a more diversified portfolio to avert concentration risk and a spike in Non-Performing Loans.


He urged the sector to focus more on efficiency as well as strengthen control environment to check against the anticipated increase in frauds and operational losses.


For other businesses, Jaiyeola urged them to rethink their strategies and models saying they would also have tough choices to make going forward.


He advised them to ensure proper cashflow management, as cash remained king while synergising and collaborating with other players within their industry.


For consumers, Mr Timothy, DG, NECA advised that they reconsider their consumption pattern and build savings culture as a precautionary measure.

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He, therefore, urged the Central Bank of Nigeria, Bank of Industry among other institutions, to jump-start activities in the real sector, particularly among the SMEs.


According to him, these institutions have significant roles to play in reflating the economy. He said: “The current position in the country is cyclical and will not be permanent.


“Despite the crisis, there are some opportunities. For example, we still have certain industries thriving in the country, such as Information Technology, Communications, Power, etc.


“Our core challenge as a country is to progressively diversify the economy, grow the real sector and create a conducive environment for business.


“By doing this, we will not only be able to stimulate significant investment from local players but will also be able to attract more of foreign direct investments rather than Foreign Portfolios investments, with a view to ultimately move Nigeria from a “vicious cycle of poverty” to a “ cycle of boom and prosperity.




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