Nigeria’s determination to grow its economy to $1 trillion mark remains a bold vision that is achievable with the strategic alignment of policy, investment, technology, and, most importantly, collective will to innovate and grow, Group Managing Director, United Bank for Africa (UBA), Oliver Alawuba has said.
He spoke at the weekend, during the 2024 Finance Correspondents Association of Nigeria (FICAN) Annual conference held in Lagos.
Alawuba, who was the keynote speaker at the event with theme: “Nigeria’s Journey Towards $1 Trillion Economy: Impact of Banks’ Recapitalization, Opportunities for Fintechs, and the Real Sector”, was represented by Ugo Nwaghodoh, Executive Director, Finance and Risk Management at the UBA Plc.
Alawuba listed key policy steps government and banks needed to take to actualize the $1 trillion economy vision.
He said the ongoing recapitalisation of banks, driven by the Central Bank of Nigeria’s policy initiatives, was designed to fortify the banking sector, making it more resilient and capable of driving sustained economic growth.
“In recent years, Nigerian banks have faced challenges from both external shocks (such as the global pandemic, volatile oil prices, and global monetary tightening) and internal pressures like inflation and Naira depreciation. This recapitalization initiative is not just about compliance with regulatory requirements, but about equipping the banking sector with the financial strength to be a reliable engine for economic transformation,” he said.
Alawuba also spoke about stabilising the financial system, insisting that having banks with stronger capital base, will provide the cushion for them to withstand both external and internal shocks.
For him, recapitalization policy must further lead to a significant expansion in the provision of credit to the real sector, particularly in Agriculture, Manufacturing, and Infrastructure.
According to him, the banking system must be attuned to global trends such as digitization, application of artificial intelligence, ESG (Environmental, Social, and Governance) criteria, and Sustainable Finance.
“International Banks are already capitalizing for these trends, and Nigerian banks should position themselves to take advantage of these emerging opportunities by offering products and services that align with global best practices,” he said.
Alawuba further explained that Nigeria has the largest fintech market in Africa, with a rapidly growing number of start-ups offering solutions that address the inefficiencies of the traditional banking sector.
“Fintech has already transformed how Nigerians access financial services – from mobile payments to lending platforms, the scope is vast. As we march towards a $1 trillion economy, the Fintech Sector is poised to play a crucial role in expanding financial access, driving innovation, and stimulating competition within the broader financial system,” he said.
He also spoke on the role of the real sector, adding that for Nigeria to achieve its $1 trillion economy goal, the real sector (which includes Agriculture, Manufacturing, and Services) must become the true engine of growth.
“A vibrant real sector will drive employment, foster innovation, and strengthen the overall economy by reducing dependency on the oil sector,” he advised.
He said that agriculture remains one of Nigeria’s largest employers, yet productivity levels are among the lowest in Africa.
He also spoke on the role of manufacturing, which plays a critical role in driving industrialization.
“To increase its share of nominal GDP beyond 12.68 per cent, we need a coordinated approach that includes expanding local production, enhancing export capacity, and improving access to power and logistics infrastructure. Nigeria’s manufacturers face high operational costs due to poor infrastructure and energy challenges. Solving these issues is key to unlocking the sector’s potential to create jobs and foster economic growth,” he said.
The Small and Medium Enterprises (SMEs) were also not left behind. Alawuba said SMEs are the lifeblood of Nigeria’s economy, representing over 90 per cent of businesses and contributing 48 per cent to the GDP, according to the Nigerian Small and Medium Enterprises Development Agency (SMEDAN). However, they often struggle with access to finance, particularly long-term, affordable credit.
“This is where the recapitalization of banks and fintech innovation must converge. By creating products specifically targeted at SMEs, such as flexible loan packages, digital banking tools, and access to markets, Nigeria can unlock their potential for exponential growth,” he said among other recommendations.
Credit: thenationonlineng.net
