Mr Oliver Alawuba, Group Managing Director, United Bank for Africa (UBA), says Nigeria requires a double-digit Gross Domestic Product (GDP) growth to achieve the projected one-trillion dollar economy target by 2030.
Alawuba made this remark on Monday in Abuja, at the ongoing 36th Edition of the Finance Correspondents and Business Editors Association of Nigeria Seminar, organised by the Central Bank of Nigeria (CBN).
The theme of the seminar is, “Playing the Global Game: Banking Recapitalisation Towards a One- Trillion Dollar Economy”.
He emphasised the necessity of institutional frameworks and government support for banks to invest in critical infrastructure that would foster accelerated growth of the Nigerian economy.
“We need to grow at double digits to get to one-trillion dollar in 2030. We need 10 per cent growth, which is achievable,” he said.
He noted that only 12 per cent of Nigeria’s GDP is represented by the total assets of banks, while other economies have over 70 per cent to 100 per cent.
According to him, this indicates a significant gap where banks can intervene and help mobilise deposits, resources, and capital, ensuring that other sectors benefit from the banking system.
“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.
“The opportunities in Nigeria are immense. Therefore, sustainability will not be a problem.
“This is because banks will now be able to raise, even with the capitalisation we have undertaken, sufficient capital to truly elevate this economy to the next level,” the managing director added.
Alawuba also said the 50 per cent Cash Reserve Ratio (CRR) might be unsustainable for economic growth and urged its reduction, just as inflation rate was managed.
He highlighted the importance of security, financial inclusion and addressing infrastructure deficits in roads, ports and power.
He further stressed the need for tax incentives and a transition from a primary to a secondary economy to drive growth.
“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,” he said. (NAN)
