Stanbic IBTC worries about looming recession
Stanbic IBTC Holdings Plc, a member of Standard Bank Group, has advised individuals and organisations to take proactive measures needed to avoid recession expected to follow the coronavirus pandemic.
While speaking during the Stanbic IBTC ‘Blue Talk’ webinar on YouTube, the Head, Sub-Saharan Africa Equity Sales, Stanbic IBTC Stockbrokers Limited, Akinbamidele Akintola, said that this year had been challenging for businesses globally because of the impact of coronavirus, and if appropriate measures were not taken, the world could go into a global recession.
In a statement, he advised the government to provide measures to stabilise the Nigerian economy, such as removal of fuel subsidy, curtailing recurrent expenditure, pursuing the privatisation programme, avoiding the raising of Euro bonds and efficient port services.
These were in addition to other interventions necessary in order to avoid a recession in the country, he added.
He said, “Nigeria’s revenue was about N4tn last year and we spent N1.9tn on fuel subsidy, which was almost 50 per cent.
“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 recommended that the government should strategically cut down cost on recurrent expenditure, which currently stood at about 80 per cent of the country’s income.
While advising the government against borrowing, he said, “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.
“We are aware that many SMEs are worried about what the future holds for their businesses and how to manage their businesses in order to guarantee business continuity post-COVID-19 crisis.”