Abuja: Mr. Oliver Alawuba, Group Managing Director of United Bank for Africa (UBA), has emphasized the need for Nigeria to attain double-digit Gross Domestic Product (GDP) growth to meet its one-trillion-dollar economy target by the year 2030. Alawuba shared these insights during the 36th Edition of the Finance Correspondents and Business Editors Association of Nigeria Seminar, organized by the Central Bank of Nigeria (CBN).
According to News Agency of Nigeria, the seminar, which focuses on the theme ‘Playing the Global Game: Banking Recapitalisation Towards a One-Trillion-Dollar Economy’, provided a platform for Alawuba to highlight the critical role of institutional frameworks and government support. He stressed that banks need to invest in essential infrastructure to accelerate the growth of the Nigerian economy. Alawuba noted, “We need to grow at double digits to get to one-trillion dollars in 2030. We need 10 per cent growth, which is achievable.”
Alawuba pointed out the disparity between Nigeria’s banking sector and those of other economies, stating that only 12 per cent of Nigeria’s GDP is represented by the total assets of banks, in contrast to over 70 per cent to 100 per cent in other countries. This gap, he suggested, represents a significant opportunity for banks to mobilize deposits, resources, and capital, thereby benefiting various sectors through the banking system.
He further explained, “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.”
Alawuba also addressed the current 50 per cent Cash Reserve Ratio (CRR), expressing concerns about its sustainability for economic growth and advocating for its reduction in line with managed inflation rates. He underscored the importance of enhancing security, promoting financial inclusion, and tackling infrastructure deficiencies in areas such as roads, ports, and power.
Moreover, Alawuba called for tax incentives and a shift from a primary to a secondary economy to stimulate growth. He stated, “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.”