Adebayo Wants Financial System Broadened to Aid Sustainable Growth

James Emejo and Folalumi Alaran in Abuja

The Minister of Industry, Trade and Investment, Mr. Adeniyi Adebayo has said that the financial system should be broadened and deepened to sustain the growth of the economy.

The minister at the 2021 national workshop of the Chartered Institute of Stockbrokers (CIS) in Abuja, stressed that the financial sector was central to an economic growth.

He also said that the implementation of the Africa Continental Free Trade Area Agreement (AfCFTA) will enhance the continent’s capacity to unlock growth and create jobs by building the nation’s industrial capacity, enlarging its productivity as well as becoming competitive globally.

Adebayo said with the largest economy and population in Africa- $500 billion in GDP and a population of 200 million respectively, the country could benefit immensely from the trade agreement.

He said,”As the economy grows, the financial services sector needs to keep pace with changing industry demands, especially in terms of assessing the prospects for risk and return.

“Sustainable growth of the economy needs to be underpinned by a broadening and deepening of the financial system, capable of serving the needs of all parts of the economy.”

He said economies which had sustained long-term growth have experienced enormous structural change by shifting from being predominantly rural and agricultural to a more urban, manufacturing and service-based structure.

He said,”This was certainly the history of many industrialised countries as the countries’ economies diversified, their financial systems grew in depth and breadth.”

The minister added that now that the country is presently experiencing economic growth, there was the need for the development of a healthy financial sector.

He noted that the focus is currently on reforms that strengthen the rights of borrowers and lenders, strengthen the credit rating system, lower the costs of obtaining credit as well as streamline dispute resolution.

Commenting further on the AfCFTA, he said,”This market size allows manufacturers to increase capacity and expand into other African countries. “This will enable investors to benefit not only from the Nigerian market but from other countries on the continent as well.

“To put this in context, Nigeria contributes an estimated 76 pet cent of total trading volume in the ECOWAS region. This is made possible because of the ECOWAS treaty which provides for the free movement of people and goods throughout 15 West African countries.”

According to him, AfCFTA grants access to 54 countries with a population of around 1.3 billion and a market value of about $3.4 trillion.

He said the federal government through the Ministry of Industry, Trade and Investment recognised the importance of attracting and retaining patient investment in our economy adding that the ministry had continually engaged relevant MDAs to implement policies that will help to achieve this goal.

The minister in a statement by his media aide, Mr. Ifedayo Sayo, listed some of his ministry’s trade and investment promotion policies to include, establishment of Presidential Enabling Business Environment Council (PEBEC); Companies and Allied Matters Act (CAMA) 2020; Finance Act 2020; reform of the countr’s International Investment Agreements (IIAS); Book of States; One Stop Investment Center (OSIC) Lab; and the development of an online investment guide among others.