By Nse Anthony-Uko
(Sundiata Post) — For Nigeria to achieve the 2.5 per cent GDP growth target for this year, Small and Medium Enterprises (SMEs) would need to scale up their production.
Chief executive officer, RTC Advisory Services Mr. Opeyemi Agbaje, has urged business owners in the country to re-strategise for new and emerging opportunities in the country as the Nigerian economy is forecast to grow by 2.5 per cent.
Agbaje issued the advice at the 2018 Double Impact Platform held in Lagos last week. The event is an innovative training programme targeted at business owners and entrepreneurs who are married and are jointly in business as “Coprenuers. Agbaje said “It is important for businesses to understand the emerging opportunities in other to maximize growth”.
He touched on all the economic indices through an in-depth analysis of the 2018 economic and financial outlook, expatiating on the issues, challenges and opportunities for people in business. The financial analyst stated that the oil prices have surged to $70 per barrel beyond the 2017 expectations, offering Nigeria some respite and suggesting a better economic outlook in 2018.
“The increase in oil prices, the resumption of economic growth and other macroeconomics fundamentals which are also improving, suggests better prospects for businesses, especially as the oil sector growth diffuse into all other sectors,” Agbaje said.
Recently, there has been a steady rise in Nigeria’s external reserve. This rise is as a result of improved foreign exchange inflow occasioned by the increase in crude oil price, dollar inflow from foreign portfolio investors facilitated by the investors and exporters’ window introduced in April 2017 as well as reduction in dollar sale through Central Bank of Nigeria’s Forex intervention.
In his analysis “there is renewed interest of foreign investors in the equity segment of the Nigerian capital market which recorded an appreciable improvement in the preceding year. This performance is a proof that foreign investors, who retreated from Nigeria during the time of recession, are beginning to have confidence again in doing business in Nigeria”, he said.
Concerning the monetary policy, Agbaje mentioned that throughout last year the CBN maintained its monetary policy rate at 14 per cent and as the economy recovers to full-throttle, it is expected that the monetary policy rate (MPR) would be eased downwards. According to him, “the reduction in the MPR will be of great benefit to businesses including SMEs who need affordable credit to build their businesses and generate jobs.”
In highlighting the issues and challenges, Agbaje stated that “there is little or no growth rate in the non-oil sector. In Q3 of 2017, the growth rate in the oil sector was 25.89 per cent while that of the non-oil sector such as agriculture at 3.06 per cent, utilities at 7.84 per cent and all other sectors below 1per cent.”
He said that in Q3 of 2017, the oil sector only contributed 11.0percent to the GDP while the non-oil sector contributed 89.0 per cent. Major contributions to the GDP from the non-oil sector were Agriculture at 24.44per cent, Trade at 17.96per cent, Information and Communication at 8.69 per cent, Manufacturing at 8.55per cent and Real Estate at 7.52per cent.
According to Agbaje, strong national economic growth would happen when these other sectors also begin to record growth. Talking on diversification, Agbaje explained that there is a need for diversification from total dependence on oil as the country’s major source of revenue given that other sectors contribute more to the GDP than the oil sector.
He stated that the agriculture, trade (SMEs) and manufacturing sectors are key sectors that require growth because they contribute more to the nation’s GDP. The major challenges these sectors have are inadequate infrastructure, access to finance, inflation, political instability, and foreign currency regulations.
He summarized that the positive macroeconomic elements such as stable foreign exchange rate, receding inflation rate and an increase in the general reserve all suggest a better economic outlook in 2018.
Speaking on the programme, the convener of Double Impact Platform and executive director of Falcon Corporation, Audrey Joe-Ezigbo, said the Plan Forward programme for couples in business is designed to equip business owners with skills and knowledge required to stay competitive in their various industries.
“It offers rich content which help “Copreneurs” would become more proactive, improve performance, assess risk and opportunities and most importantly supports their vision for building legacies that foster generational and overall national prosperity. It is intended to address key elements that make businesses strong and stable such as innovations, finance, building competitive edge, all of which are critical to effective planning and execution,” Joe-Ezigbo informed.
According to Joe-Ezigbo, a key focus of the Planning Forward 2018 programme was to equip coprenuers to understand the new emerging economic growth opportunities to optimize as they build their business.