Nigeria’s financial services industry will grow by 8.32 per cent in 2022, according to Mr Bismarck Rewane, the Managing Director/Chief Executive Officer, Financial Derivatives Company.
Rewane, the keynote speaker at the Nigerian Economic Outlook 2022 webinar organised by First Bank of Nigeria Ltd. on Thursday in Lagos, hinged the predictions on increased partnership and collaborations by Financial Technologies (Fintechs) in promoting financial inclusion.
Rewane added that there would be rationalisation and drift within the industry, stressing that Tier 1 banks would leverage their robust customer base and balance sheet size.
He said there would be aggressive digital innovation and lending solutions as well as possible mergers and acquisitions within and across tiers to boost capital structure.
Rewane said the manufacturing sector would likely grow by 4.70 per cent in 2022.
He predicted that improved foreign exchange liquidity and increased product innovation would boost the sector’s growth.
“Players would benefit from volume and value growth. Top players (Nestle Nigeria and Unilever) will report profit growth of 20 per cent in 2022.
“Agriculture sector is likely to grow by 1.6 per cent in 2022, an efficient rail system will ease logistics constraints and boost productivity,” he said.
Rewane added that the ICT industry would likely grow by 9.72 per cent in 2022 with telephone penetration on the rise.
“There will be a surge in Fintech and mobile payments, while increased levels of activities will be supported by 5G operations, the sector will consolidate within the year,” he said.
According to him, telecom infrastructure will expand with cable acquisition.
Rewane noted that the nation’s economic performance would be largely determined by the successful implementation of the 2022 budget and the newly approved five-year development plan.
He explained that the declining inflation would be positive for consumer purchasing power, adding that monetary tightening in advanced economies could trigger capital outflows.
He also said oil price would remain relatively stable, adding that real Gross Domestic Product (GDP) growth would be sublime.
According to him, in 2022, competition between traditional banks and Fintechs will intensify, while banks with constant innovation and regional diversification will remain resilient.
He further noted that reform could be impeded by political considerations and labour union activities within the year, saying that insecurity could prove tricky to contain and would become a political campaign tool for the opposition.
Rewane also said the Central Bank of Nigeria (CBN) would likely increase foreign exchange supply to manufacturers to ease currency pressures.
He stressed that pre-election spending would be positive for aggregate demand and would as well boost corporate performance.
On the exchange rate outlook, he said the CBN would likely step up efforts towards exchange rate convergence.
He also noted that political jitters would heighten foreign demand pressures in the fourth quarter of the year.
On the risk matrix in 2022, he listed policy reversal and delayed reforms, heightened social unrest spurred by high unemployment and poverty levels and financial sector crisis, among others, as things to watch out for.
Earlier in his opening remarks, Chief Executive Officer, FirstBank, Dr Adesola Adeduntan, said the webinar provided the opportunity to assess the performance of the Nigerian economy across key indices in 2021 and benefit from expert opinions on the expectations and forecast for 2022.
Adeduntan said it would also provide excellent insights on the key factors that would shape both the global and local economic landscape in 2022.
He noted that in 2021, global outputs rebounded and recovery was strong following improved vaccination efforts, as well as support from the monetary and fiscal authorities.
According to him, the fourth wave of COVID-19 omicron variant created some level of caution, impacting the activities of the fourth quarter of 2021 and leading to the push for booster jabs and reinstatement of COVID-19 protocols.
Adeduntan said specific key lessons can be gleaned from the economic and related activities of 2021.
He noted that these lessons and other expected occurrences in 2022 were vital ingredients to the planning processes of the bank’s esteemed customers and stakeholders.
“As a bank, we have a legacy of supporting the growth of businesses as the engine for economic growth and development in Nigeria and across Sub-Saharan Africa.
“In line with our renewed vision ‘to be Africa’s bank of first choice,’ FirstBank will take the lead in driving the development of the different sectors and industries within the economies where we operate to support overall economic growth and sustainability.
“As a bank that is woven into the fabric of society, this webinar is further reinforcing our support and collaboration with stakeholders as we demonstrate our commitment and willingness to be the partner of first choice to our customers,” he said.
Adeduntan hoped that at the end of the webinar, participants would have gained valuable insights into the global and local economic direction. He said the participants would as well understand how to strategically position their businesses and personal endeavours to harness the opportunities that would arise all through the year.