Wednesday, January 01, 2014

Nigeria in 2014: Looking forward to a year of Financial and Overall Inclusion

With a huge rural population that is economically challenged, financial and labour market inclusion is indispensable for the sustainable growth of Nigeria and when government at top level have identified this fact, we see it as a right step in the right direction. Inclusiveness is an explicit strategy for poverty eradication and accelerated growth and it’s highly welcomed in Nigeria. It is expected that the N4.642 trillion ($29 billion) 2014 budget, if properly implemented, will strengthen the rural base, agricultural sector, allowing for better equality in income distribution in the economy. To quote the Nigerian Minister of Finance, "It's a budget for jobs and inclusive growth…The budget supports policies that will continue to push agriculture, manufacturing, investment so that our youths can have modern jobs." Also if the SURE-P funds are well utilized as proposed, hopefully, the economically marginalized will be reached through job creation and in creating safety nets for women and children. Oil is more of a curse than a blessing for Nigeria as the video below shows and hopefully all of these will ultimately lead to an economy that will gradually (because it will not happen suddenly) move towards economic diversification away from oil. At the same time, it is expected that the existing banking infrastructure in Nigeria will be upgraded in 2014 to meet growing demands. The average number of clients per Bank branch is 3882, compare to 3922 in Kenya and 8595 in Tanzania. Central Bank of Nigeria microfinance banking policy (2005) and the CBN financial inclusion strategy (2012) are all worthwhile interventions put in place by the government to encourage financial inclusion.
It is true that the Nigerian automotive policy seem like a move that “puts the cart before the horse”, it should however be a celebrated initiative because of the enormous positive social externalities it can bring. Such initiatives allow the manufacturing sector to find its bearing as local contents are sourced for car parts (raw materials from the agricultural sector), the engineering academia (who have many internationally recognized professors) will play their practical roles in economic development, jobs are created and international automobile innovation hubs can be established in the country. Hopefully Peugeot Automobile of Nigeria (PAN) and others will trace their way back to Nigeria as the power reforms and other government reforms work to address problems that led to failure similar policy moves in the ‘70s, ‘80s and ‘90s. Let’s leave it here for this first point even though there’s temptation to stretch the inclusivity theory to cover the purported housing sector reforms under the Nigeria Mortgage Refinance Company (NMRC), the agricultural transformation program and other recent economic push. It will be interesting to see how the economy unravels in the year 2014 and certainly there will be many events to watch out for.

Read the full article here: 10 Economic Highlights to look out for in Nigeria in 2014. Want to share you thoughts on the Nigerian Economy in 2014? You can drop your comment below or continue the discussion with on twitter 

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