Both the National Bureau of Statistics (NBS) and Bankers’ Committee on Thursday agreed that Nigeria’s economy was likely to have exited recession and moved to the path of growth at the end of second quarter of this year.
This disclosure came as the Bankers’ Committee concluded their August meeting in Abuja, where they also announced the inauguration of the governing board for the Agricultural and Small and Medium Equity Investment Scheme (SMIES).
As at the end of 2016 financial year, N26BN billion had already been contributed into the fund by deposit money banks out of their annual profit.
According to Statistician-General, Dr Yemi Kale “intuitively, we might be getting out of recession in the second quarter, but I can’t say until all the numbers are in.”
“If it doesn’t happen in the second quarter, it will be a much more reduced negative, and it will definitely happen in the third quarter unless we have a new round of shocks in the later weeks.”
Kale noted that of the six industries that make up more than half of the economy, manufacturing and farming will grow in the second quarter, trade and real estate will probably contract, while crude and telecommunications might shrink or expand marginally adding that more rice farming will help agriculture continue its expansion.
Data from the Organisation of Petroleum Exporting Countries shows production averaged 1.68 million barrels daily in the second quarter, more than the 1.55 million barrels a year earlier.
Managing Director, Union Bank Mr Emeka Emuwa who spoke on the N26 billion fund said the fund will finance agricultural and small businesses through equities participation.
“Banks are expected to set aside a portion of their profits, which will be made available for equity investment in agriculture and Small and Medium Enterprises so the board was inaugurated today as well as the project review committee of the fund so basically the fund is going to start functioning and over the course of the next few weeks there will be more communications as to how to access those funds.
“The import of that to the economy at large is that those who are interested in accessing funds by looking for equity to support their agricultural ventures and SMEs should approach their banks now and apply so the banks will do a preliminary review and pass these requests on to the project review committee of this fund.”
Membership of the SMIES board include managing directors of GTBank, Zenith, Access First Bank UBA, Director Banking supervision at the CBN and the Director of Development Finance at the CBN.
In addition, a project review committee that will appraise projects was inaugurated at the meting.
Chief executive officers of FCMB, Unity and Sterling banks were added to the board members to constitute the Projects Review Committee.
Any business that is involved in agriculture or qualifies as small or medium scale enterprise are all encouraged to approach their banks with what their concerns are.
He therefore advised interested entrepreneurs to immediately approach their banks to obtain forms and commence preliminary assessment too before disbursement will commence in “a few weeks.”
Director Banking Supervision of the Central Bank of Nigeria (CBN) Mr Ahmed Abdullahi who led three other bank chief executives at the briefing said “the committee noted the turnaround in the economy regarding the progress that has been made in getting the economy out of recession, we have strong belief that the second quarter of the year may have seen the economy emerging out of recession.
“There are reasons to believe this, the non oil sectors have witnessed growth although the numbers are not yet out from the National Bureau of Statistics but the fact that major non oil sectors have witnessed positive growth and the growth is driven largely by the oil sector, then there is this belief that a number of analysts believe that the economy could have been out of recession by the second quarter of 2017.
“If you look at the confidence in the economy, if you look at the upsurge in the capital market, stability of the forex market, you will know that a lot of efforts have been made in getting the economy out of recession.”
Managing Director, FSDA Merchant Bank, Mrs Hamda Ambah who corroborated Abdullahi said although some of the figures on the positive turn of the economy are not yet out “we do know that NBS had released figures that show the Purchasing Managers Index (PMI) months after months for four consecutive months that things are improving in the manufacturing sectors, all these together helps to buttress the point that we may not be totally out of the woods but things are certainly looking up and in the right direction.”
Mrs Mobola Faloye, Executive Director at Standard Chartered Bank stated that investors and exporters windows at the foreign exchange market have seen a N4 billion volume of trade in the forex window.
“In fact there is one particular single ticket that was done on the first of August, the value of the transaction itself was $240 million so we think that things are going to be looking up and we are very hopeful that we are going in the right direction and we’ll eventually get to a stage where the rates will truly converge which is where we want to get to and things are looking up for us.”
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