Minimum Wage: Inflationary Pressure ‘ll Heighten – Olowu


BY CHINYERE OBIORA, LAGOS –The President, Chartered Institute of Bankers of Nigeria (CIBN), Dr Uche Olowu has warned that inflationary pressure within the financial system will continue following the implementation of new minimum wage this year.

He however projected that the nation’s economy would perform better in 2020 compared to what transpired in year 2019.

According to him, the economy is expected to grow gradually but that would not be sufficient enough, because the Gross Domestic Product (GDP) will still be below three per cent on the average.

Speaking at the Finance Correspondents Association of Nigeria (FICAN), Lagos 2020 Economic Outlook sponsored by Polaris Bank Limited, Oluwo also said sustainable growth in an economy would only be achieved if banks begins to lend to operators in the real sector.

The CIBN boss said; “No economy has grown without access to capital. Every economy that have grown was as result of availability of credit facility. Without access to credit you cannot do any business “

He equally expressed displeasure with the borrowing culture in Nigeria, noting that this situation has largely contributed to the problem of Non-Performing Loans (NPLs) in the banking sector.

“The Borrowing culture in Nigeria is bad and some government policies also caused the issue of NPLs but despite the problem banks still need to lend to the real sector,” he lamented.

On sustained efforts to diversify Nigeria’s economy from dependency on crude oil earnings, Oluwo said the development will expectedly boost foreign investors’ confidence in the economy, adding that as soon as the economy is diversified, the country will see higher accretion to the foreign reserves and improved confidence in the economy. 

Furthermore, he said opportunities in the agricultural sector should be explored to improve Nigeria’s capacity to export agric products because the country has so much to gain by investing in agriculture, which will boost its foreign reserves.

Olowu, who endorsed government’s approach on infrastructure investment strategies, said for every economy to thrive, there must be huge investment in infrastructural facilities development.

He, however, expressed worries that insecurity in the country has diverse negative implications on the economy and social well being of Nigeria and Nigerians.

Also commenting on the Federal Government’s policies in 2019, Oluwo said bankers are now deploying manpower to get highest returns, adding that the banking industry is now open to creative minds that are ready to explore untapped areas in the economy.

According to him, the issue of Non-Performing Loans (NPLs) has been taken care of at the top level in the industry as there is no hiding place for serial loan defaulters.

He therefore called on the Federal Government to allow the private sector rebuild the country’s economy for optimum growth.

“The only way government can boost the country’s economic growth is to be market oriented. That is, by allowing the private sector to do more. There is no way the public sector can sustain the rebuilding of this economy. We need a level playing field, a healthy competition that will be fair, transparent and open to rule of law,” the CIBN Chieftain said

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