CIBN Urges Nigerians to Embrace Import Substitution Models to Promote Home Products

The Chartered Institute of Bankers of Nigeria (CIBN) has urged Nigerians to embrace import substitution models that ultimately promote home grown products and services, economic growth, and sustainable development in the country.

Dr. Bayo Olugbemi, President/Chairman of Council of the Institute made the call while delivering his remarks at the 2021 CIBN Fellowship Investiture in Lagos yesterday.

The CIBN at its Fellowship Investiture formally conferred its honorary fellowship awards on 14 distinguished bankers in recognition of their contributions to the banking industry and the economy; 77 Associates as Elected Fellows while 146 Senior Management Staff of banks and the academia became Honorary Senior Members of the Institute at the event themed, ‘Nigeria’s Rising Debt Profile: Issues and Implications for Sustainable Economic Development’.

Dr. Olugbemi told over one thousand participants who attended physically or connected to the event across the globe through Zoom and YouTube that the choice of this year’s topic stems from the growing concerns of Nigerians about the rising debt profile of the country and the need to educate the public on this issue as well as proffer sustainable management strategies.

He maintained that there is nothing wrong with borrowing. Public borrowing, public debt and public debt management are normal features of a modern economy. However, the major concern with borrowing be it, as an individual, organisation or a nation, is simply the purpose of the borrowing and the capacity to repay.

CIBN President stated that high debt levels cannot be overlooked. Historical accounts shows that high debt ratios could negatively impact or worse still, reverse economic growth. He cited example of the research by the World Bank confirms that a public debt-to-GDP ratio of 77% and over would result in an adverse impact on economic growth.

Dr Olugbemi also urged stakeholders in the banking and finance industry to continually support efforts and initiatives of government aimed at improving the economy toward inclusive growth and development. He, however, urged government to do all to minimize excessive borrowing.

“We must also pursue the path of efficiency, ensuring that all reoccurring costs that may potentially lead to excessive borrowing are reduced to the barest minimum,’’ he said.

In other way round, Mr Taiwo Oyedele, Africa Tax and Legal Services Leader PWC Nigeria and Guest Speaker at the event said that Nigeria’s public debt over the past five years (2015-2020) had expanded by an average of 21.02 percent while economic growth figure averaged 0.15 per cent.

Oyedele said that revenue, on the other hand, expanded by an average of 5.19 per cent. “By implication, the rate of expansion in public debt in Nigeria is fast outweighing the revenue mobilization capacity of the government.

“Consequently, the debt to GDP ratio expanded from 20.32 per cent in 2015 to 34.98 per cent in 2020 (IMF).

“This pace of increase in the public debt stock, particularly, raised the fiscal sustainability concerns on Nigeria,’’ he said.

Dr Ngozi Okonjo-Iweala, the Director-General of the World Trade Organisation, in response to the award of fellowship conferred on her said: “I’m honoured to be made a fellow of the prestigious the Chartered Institute of Bankers of Nigeria.

“I want to thank the institute for the excellent work it has done to uphold the professional and ethical standards of the Nigerian Banking Industry as well as its effort to educate new generations of bankers.

“Nigeria’s banking sector has contributed immensely to the development of the country and indeed the continent; there is still so much to be done and our financial services industry including the emerging FinTech sector has a strong role to play,’’ she said.

Okonjo-Iweala said the theme chosen by CIBN for deliberation at the event was an important one. She said this was so as the institution already had the necessary professional insight on issues on debt and debt sustainability, be it at the individual, institutional or national level.

However, Dr kingsley Obiora, Deputy Governor, Central Bank of Nigeria, said the launch of the eNaira by President Muhammadu Buhari had positioned Nigeria as a global leader in innovation in financial and payment system landscape.

“It is not a white coincidence that the president launched the eNaira spurring a historic first and introducing Africa’s first digital currency, and that is not a mean feat because it makes and positions us again as a global leader in innovation in financial and payment system landscape, he said.