How to revamp Nigeria’s economy — Expert

From left: the Registrar, Bowen University, Iwo, Mr Babatunte Adetona, the vice chancellor of the institution, Processor Jonathan Babalola, Professor Olayinka Adenikinju and the university's Deputy Vic Chancellor , Processor Oluwatosin Atobatele , during the 11th inaugural lecture of the university delivered by Professor Adenikinju , held on Tuesday.

A Professor of Economics and Fellow of the Institute of Chartered Accountants of Nigeria, Olayinka Adenikinju, has declared that looking inwards remains the best and most effective way to revamp the Nigerian economy.

Adenikiju, from the College of Management and Social Sciences, Bowen University, Iwo, Osun State, made the recommendation while delivering the 11th Inaugural lecture of the institution.

She noted that the need to enhance corporate performance of firms operating in the country had become inevitable at this crucial time.

In her paper entitled ‘Act of God, or Looking inwards: Unraveling the Drivers of Corporate Performance in Nigeria’, Adenikiju observed that the drivers of corporate performance depend on internal and external factors which she listed as revenue growth, profitability, liquidity as internal factors, and macroeconomic environment, growth rate of GDP, interest rates, inflation exchange rates and international tradeas external factors.

She also included competitive forces, consumers preferences, sustainability issues, reputable management as external factors that drive corporate performance.

She also noted that there are many issues in corporate governance In Nigeria that had remained unresolved, due to poor quality of data.

The professor of economics also observed that corporate income tax levied on companies has negative effect on the performance of business firms in Nigeria, adding that many firms had experienced financial problems leading to mergers, acquisitions and liquidations.

According to her, Nigerian firms are suffering form hostile external factors originating from exchange rate volatility, high inflation, difficult operating environment, inconsistency of government policy and poor infrastructure, which she said led to many international firms to exit from the country.

Mrs Adenikinju suggested that the Nigerian government must put in place policies to reverse the trend if the country wants to address the issues of poverty, unemployment, high inflation and low economic growth.

She argued that it is important to reverse the current corporate government codes to ensure that companies adopt the best practices that will enable them adjust, adapt and mitigate the constraining external environment prevailing in Nigeria.

She further spoke of the need to deepen the stock market in Nigeria, especially in the areas of long-term instruments.

According to her, the absence of variety in long-term debt instruments has reduced the proportion of long-term debt in the capital structure of companies in Nigeria.

“The establishment of more platforms for trading other securities such as bonds commodities and derivatives combined with other initiatives; dematerialisation of shares certificates , e-dividend, direct cash settlement and multiple account regulation will contribute to the growth of the Nigerian capital market.

“Moreover, the issues around data and cost of access to data should be addressed by the relevant regulatory agencies in the sector to ease the comprehensive study of corporate governance in Nigeria,” she added.

In his own remarks, the Vice Chancellor of the university, Professor Jonathan Babalola, asserted that while Nigerians commit themselves to prayers, effort should also be made to look inwards to fix the economy.

“Government must make efforts to develop a good structure and policies that will revamp the economy. Corruption must be dealt with in Nigeria,” he said.

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