As the impact of the coronavirus (COVID-19) continues to ravage various economies across the globe, Stanbic IBTC Holdings PLC, a member of Standard Bank Group, has advised that Nigeria and her citizens must take proactive measures needed to avoid the looming recession that is expected to follow the pandemic.
Speaking during the Stanbic IBTC ‘Blue Talk’ Webinar on YouTube, Akinbamidele Akintola, Head, Sub Saharan Africa Equity Sales, Stanbic IBTC Stockbrokers Limited, said that this year has been challenging for businesses globally, because of the impact of coronavirus, and if appropriate measures are not taken, the world may go into a global recession.
He advised the government to provide measures to stabilise the Nigerian economy, measures such as removal of fuel subsidy, curtailing recurrent expenditure, pursuing the privatisation programme, avoiding the raising of Euro Bonds and efficient port services. These are in addition to other interventions necessary in order to avoid a recession in the country.
He said: “Nigeria’s revenue was about N4 trillion last year and we spent N1.9 trillion on fuel subsidy, which was almost 50%. We can generate more revenue from taxation by widening the tax base to capture more people, as well as exploiting the privatisation programme to raise revenue. We also need an efficient port to move goods in and out quickly. This will help the economy grow faster.”
Akintola also recommended that the government should strategically cut down cost on recurrent expenditure, which currently stands at about 80% of the country’s income. Similarly, he encouraged Small and Medium-Sized Enterprises (SMEs) to source their materials locally in order to boost the economy.
He further advised the government against borrowing, “This is not the time to raise euro bonds, we need to focus on concessionary money, that we can earn at two to three per cent,” he said.