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Dependence on imports will deplete external reserves – Experts

By on July 20, 2014

Experts in the financial and real sectors have said the Federal Government needs to address the growing dependence on imports, which puts pressure on the country’s external reserves, in order to prevent the reserves from being depleted further.

The experts spoke at the 2014 half-year economic review organised by the Lagos Chamber of Commerce and Industry in Lagos on Thursday.

While presenting data on money market and other macro indices, Dr. Biodun Adedipe of B. Adedipe Associates Limited, said efforts should be made to strengthen the manufacturing sector, which was plagued with challenges.

According to him, that will reduce the country’s dependence on imports.

He said, “The economy’s heavy dependence on imports and fledging confidence in the national economy – with mounting unresolved security issues – will continue to urge capital outflows and put pressure on external reserves,” he said.

While he said inflation was likely to rise, Adedipe explained that it would remain in single digit by the year-end as the Central Bank of Nigeria continues with tight monetary policy in order to checkmate expansionary government expenditure.

He added that the pressure would deepen as the tempo of political activities towards 2014 and 2015 elections increases.

Adedipe also called for increased investment in infrastructures and improvement in governance as part of measures to improve social welfare.

He said, “Nigeria, with the rebased GDP is now ranked number 26 with regards to the size its economy in 2013; but ranked 147 out of 189 countries profiled in the World Bank’s latest ease of doing business report. The country’s ranking in the UNDP Human Development Index is 153, out of 210 countries.

“This is a graphic illustration of disconnect between the growth and development; and between growth and quality of investment climate. These are critical gaps that we need to fix urgently for economic growth to be inclusive and impactful.”

Also, The Chairman, Lead Securities and Investment Limited, Mr. Abimbola Olashore, said the country remained an investment destination for foreign investors going by their continued dominance of the nation’s capital market despite tapering by the United States Federal Reserve authorities.

 

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