Connect with us

Business

Double-digit GDP growth necessary to achieve $1trn goal – UBA GMD

Published

on

Group Managing Director, United Bank for Africa (UBA), Mr Oliver Alawuba, has said Nigeria requires a double-digit Gross Domestic Product (GDP) growth to achieve the projected one-trillion dollar economy target by 2030.

Alawuba made this remark on Monday in Abuja, at the ongoing 36th Edition of the Finance Correspondents and Business Editors Association of Nigeria Seminar, organised by the Central Bank of Nigeria (CBN).

The theme of the seminar is, “Playing the Global Game: Banking Recapitalisation Towards a One- Trillion Dollar Economy”.

He emphasised the necessity of institutional frameworks and government support for banks to invest in critical infrastructure that would foster accelerated growth of the Nigerian economy.

“We need to grow at double digits to get to one-trillion dollar in 2030. We need 10 per cent growth, which is achievable,” he said.

He noted that only 12 per cent of Nigeria’s GDP is represented by the total assets of banks, while other economies have over 70 per cent to 100 per cent.

According to him, this indicates a significant gap where banks can intervene and help mobilise deposits, resources, and capital, ensuring that other sectors benefit from the banking system.

“The plan so far is highly beneficial for the economy. Strong banks require strong profits. Strong banks are crucial for building the strong economy we desire.

“It’s important that banks remain profitable so they can build a very robust reserve to support the economy and the banks themselves.

“The opportunities in Nigeria are immense. Therefore, sustainability will not be a problem.

“This is because banks will now be able to raise, even with the capitalisation we have undertaken, sufficient capital to truly elevate this economy to the next level,” the managing director added.

ALSO READ:  Investors lose N318bn as bearish sentiment persists

Alawuba also said the 50 per cent Cash Reserve Ratio (CRR) might be unsustainable for economic growth and urged its reduction, just as inflation rate was managed.

He highlighted the importance of security, financial inclusion and addressing infrastructure deficits in roads, ports and power.

He further stressed the need for tax incentives and a transition from a primary to a secondary economy to drive growth.

“We need an institutional framework and government support to invest in infrastructure and other areas to support the economy.

“A 50 per cent CRR is not sustainable if we are going to talk about the growth of the economy.

“I am happy that inflation is responding to the actions of the CBN.

“So, as the inflation rate comes down, we expect the CRR to come down,” he said. (NAN)

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

‘Don’t Ask A Man With Ulcer To Fast,’ Rewane Warns Nigeria Against Cutting Spending

Published

on

The Chief Executive Officer of the Financial Derivatives Company, Bismarck Rewane, has emphasised the need for Nigeria to adopt a pragmatic and balanced approach to managing its fragile economy.

Speaking on Channels Television’s Business Morning, the financial expert cautioned against drastic expenditure cuts, highlighting the importance of security, investment, and inflation control.

His remarks follow a report by the International Monetary Fund (IMF), which suggests Nigeria’s economic outlook is marked by significant uncertainty.

When asked about cutting government spending, Rewane drew a vivid analogy, stating that cutting expenditure is not the same as optimising it.

“The IMF is advising that we optimise expenditure, as there are numerous leakages at both state and federal levels, which act as a negative investment multiplier,” he explained. “But to ask us to cut our expenditure at a time when we need to invest more is like asking a man with an ulcer to go on a fasting mission.”

However, he warned that exemption from spending cuts does not mean free spending for the government at both state and federal levels. “We must optimise expenditure, not spend like drunken sailors,” he said.

Rewane acknowledged the necessity of President Bola Tinubu’s reforms, such as the removal of fuel subsidies and currency realignment, but stressed that these measures alone are inadequate for achieving economic stability.

“We must stop looking backwards,” he said. “What was appropriate in 2023 may not suffice for 2025.”

He also highlighted the challenges posed by insecurity in oil-producing regions, which continue to hinder Nigeria’s economic recovery. Without resolving these issues, oil production—a key revenue source—will remain underwhelming.

ALSO READ:  Read Why Rwanda, Singapore Are Partnering On FinTech

Inflation and Fiscal Challenges
Commenting on inflation, Rewane expressed cautious optimism, predicting a modest rise to 25–27%, contrary to the IMF’s projection of 30% in 2025 and 37% in 2026.

He pointed out that continued liquidity in the system may force the Central Bank of Nigeria to maintain or increase interest rates to manage inflation expectations.

Rewane criticised the Debt Management Office (DMO) for reducing bond issuance from ₦1.8 trillion in the first quarter of the year to ₦1.2 trillion in the second quarter, calling it a step in the wrong direction.

“Increased bond issuance is key to mopping up liquidity and controlling inflation. This is one of the painful choices we make to control inflation,” he noted.

He also raised concerns about Nigeria’s undervalued crude oil exports, stating, “We sell for 70 cents, while our neighbours get $1.20. How long can this go on?”

While praising the Dangote Refinery for reducing local fuel prices, he warned that plans by the Organisation of Petroleum Exporting Countries (OPEC) to increase output could further depress oil prices.

On the global front, Rewane addressed US President Trump’s signal to reduce tariffs on China, noting that while it could ease pressure, uncertainty would persist.

He predicted greater stability between May and June, adding that any recession as projected by the IMF would likely be mild and not deep.

“I don’t believe the world can live with unexpected gyrations. Yes, a recession may come, but it will be mild, not deep,” he said.

Rewane concluded by stressing the need to fill Nigeria’s fiscal gap through borrowing, reducing leakages, and fiscal consolidation.

ALSO READ:  Global Energy Demand To Increase By 352 mboe/d In 2045 – OPEC

“These are serious times, and we must respond with serious adjustments,” he said.

Continue Reading

Business

Uber, Bolt, Other Drivers Plan May 1 Strike Over Low Fares

Published

on

Ride-hailing drivers in Lagos plan to halt services on May 1, 2025, accusing Uber, Bolt, Lagride, inDrive, and Rida of exploitation through low fares and high commissions, the Amalgamated Union of App-Based Transporters of Nigeria said on Tuesday.

The 24-hour shutdown, involving about 5,000 drivers, aims to disrupt Nigeria’s $273 million ride-hailing market. The drivers are demanding better wages and safer conditions, AUATON’s Public Relations Officer, Steven Iwindoye, noted in a statement shared with PUNCH Online.

Drivers face commission rates of 25-30 per cent and fares as low as N1,200 for 10km trips, compounded by rising fuel costs since the 2023 subsidy removal.

“Despite our efforts to engage in dialogue, these companies have consistently prioritised their profits over our well-being,” the union said. “They’ve ignored our pleas for fair compensation, safe working conditions, and respect for our rights as workers.”

Nigerian Uber driver shot dead in US, passenger in critical condition
As part of the action, drivers will log off their apps and stay off the roads to demand better compensation, safety guarantees, and recognition of their rights.

The protest, timed for International Workers’ Day, follows growing scrutiny of the global gig economy, with similar actions already taken in the US and South Africa.

AUATON said it plans to establish a negotiation framework after the strike, working with labour groups to push for reforms.

“This is not just about drivers being off the road for one day,” said the union. “It’s about building a united front to demand dignity and fairness for the people who keep the digital transport economy running.”

ALSO READ:  Stock market down by 0.52%, investors lose N345bn
Continue Reading

Business

FG Targets Additional 4,000MW To Grid Capacity By 2026

Published

on

The federal government says it is targeting an additional 4,000 megawatts (MW) of electricity to the national grid by the end of 2026 under a revised implementation plan for the presidential power initiative (PPI).

Bolaji Tunji, special adviser on strategic communications and media relations to Adebayo Adelabu, minister of power, announced the target in a statement on Sunday.

Nigeria’s current grid capacity is 4,919mw.

According to the statement, the administration of President Bola Tinubu has revitalised the PPI following the execution of an acceleration agreement with Siemens Energy to fast-track its implementation and improve power supply.

The new structure, Tunji said, allows Siemens to focus solely on modernising the transmission subsector using a turnkey model, while other credible engineering, procurement and construction (EPC) firms with proven capacity will be responsible for the distribution component.

“While acknowledging efforts of past administrations on the PPI, the Minister said some of the key milestones under the present administration apart from the execution of an Acceleration Agreement with Siemens Energy to fast-track the implementation of the PPI, include the approval of a new technical direction for the PPI, ensuring Siemens Energy focuses solely on upgrading and modernizing the transmission subsector through a Turnkey approach,” the statement reads.

“The president also approved that the distribution scope be delivered by other reputable Engineering Procurement and Construction (EPC) Companies with the requisite technical, financial, and financing capacity.

“The strategic decisions aim to increase grid capacity by an additional 4,000MW by the end of 2026, with an aspirational target of an additional 2,000MW, as directed by the economic management team in 2024.”

ALSO READ:  Senator Katung's Distributes 5,000 Fertilizer To Farmers

Tunji said that while the PPI was conceived in 2018 under a bilateral agreement between Nigeria and Germany, the project has witnessed significant progress since the Tinubu administration took office on May 29, 2023.

“There is no way the minister’s statement that no significant progress on the project was made until the present administration was inaugurated, can be faulted when the major milestones between 2023 till date are considered,” he said.

“This administration, under the leadership of President Tinubu, has demonstrated an unwavering commitment to the PPI, recognising its critical importance to opening up the economy and galvanising national development.

“To ensure the expeditious delivery of improved power supply to industrial clusters, households, and businesses, President Tinubu mandated the signing of an Acceleration Agreement.

“This commitment has translated into tangible results. Under the present administration , leadership, strengthened programme governance has expedited contract and financing approvals, leading to faster project implementation.”

He noted that the PPI pilot phase under the current administration delivered 10 power transformers and 10 mobile substations, manufactured and delivered in October 2023.

The spokesperson said the several transmission projects executed by FGN Power Company have also added over 700MW in wheeling capacity for industries, universities, and homes.

Tunji said electricity generation in Nigeria peaked at 6,003MW on March 4, 2025, the highest ever, with a new record of 128,370.75MWh in daily energy delivery, and generation evacuation reached 5,801.44MW on the same day.

On grid infrastructure, he said over 70 transformers were added between 2024 and 2025 through TCN’s internally generated revenue (IGR) and support from the World Bank and African Development Bank, adding over 12,000 megavolt-amperes (MVA) to grid capacity.

ALSO READ:  Women farmers wants government to address gender-based discrimination over land control

“However, the minister is the first to acknowledge challenges in the sector. Such challenges include the N4 trillion in outstanding subsidies and unsustainable tariff regimes, rampant vandalism, electricity theft, and chronic bill non-payment, poor investment by some operators, especially in the distribution infrastructure and resistance to the sector commercialisation by the electricity consumers, which is impacting on the sector’s liquidity,” he added.

Tunji said that despite the challenges, the ministry has achieved significant progress in reforming the sector, expanding access, and upgrading infrastructure.

The spokesperson added that a solid foundation has been established for long-term transformation, driven by a commitment to inclusive, sustainable, and results-focused development of the power sector.

Continue Reading