Gross Domestic Product (GDP) growth rate has been envisaged to grow to 1.22 percent and 1.02 percent, largely driven by improved agricultural output and productivity, and a strongly expanding manufacturing sector, according to economists.
The most likely case in terms of expectation in crude oil prices is $55bbl in 2017. Also in 2017, nominal interest rates to remain at upper double digits (MPR 11 percent, and lending still 22 percent. The analysts said inflation rate would rise to 22.4 percent until third quarter of 2017, and the official exchange rate to remain at N335 per dollar in 2017 and 2018.
Biodun Adedipe, an economist and facilitator at the ongoing workshop for Business Editors and Finance Correspondents organised by the Nigeria Deposit Insurance Corporation (INDIC) in Kaduna State, based his outlook for the economy on three premises – the structure and trajectory of the key sectors, the direction of government policy and spending.
Speaking on the impact of recession on the Nigerian banking system, Adedipe said generally, banks were highly vulnerable to economic recession, financial crisis and mortgage crisis.
Non-performing loans will mushroom as the business space for them also shrinks and their profits decline. Profits in the Nigerian banks are not plummeting because OF several aberrations in the banking system, including high interest rates and spread as well as the counterproductive foreign exchange management system, he said.
He urged banks to scale up controls and cyber firewalls, build capacity for fraud and forgeries detection and control.
He advised the Federal Government to adopt Chinese model, to build more roads and effective rail system in the country, while calling for protective policies for the nation’s economy and industries.
He further challenged the President Muhammadu Buhari-led administration to borrow a leaf from China, whose roads and rail systems were now the best.
According to Adedipe, China came up with a 30-year infrastructure development model in 2004 to build roads that will out-competes US.
The US has 75,000km of expressway, but China set a target of 85,000km expressways to be delivered in 30 years from 2004 to 2034, he said. By 2007, China already has 53,000km of expressway. So, they reviewed the target date backward to 2010 and by 2010, they achieve their target.