Business
Nigeria’s financial services industry predicted to grow by 8.32%
Mr Bismarck Rewane, the Managing Director/Chief Executive Officer, Financial Derivatives Company, has predicted that the financial services industry will grow by 8.32 per cent in 2022.
Rewane, was the keynote speaker at the Nigerian Economic Outlook 2022 webinar organised by First Bank of Nigeria Ltd. on Thursday in Lagos.
He hinged the predictions on increased partnership and collaborations by Fintechs in promoting financial inclusion.
Rewane added that there would be rationalisation and drift within the industry, stressing that Tier 1 banks would leverage their robust customer base and balance sheet size.
He said there would be aggressive digital innovation and lending solutions as a well as possible mergers and acquisitions within and across tiers to boost capital structure.
Rewane said the manufacturing sector would likely grow by 4.70 per cent in 2022.
He predicted that improved foreign exchange liquidity and increased product innovation would boost the sector’s growth.
“Players would benefit from volume and value growth. Top players (Nestle Nigeria and Unilever) will report profit growth of 20 per cent in 2022.
“Agriculture sector is likely to grow by 1.6 per cent in 2022, an efficient rail system will ease logistics constraints and boost productivity,” he said.
Rewane added that the ICT industry would likely grow by 9.72 per cent in 2022 with telephone penetration on the rise.
“There will be surge in Fintech and mobile payments, while increased level of activities will be supported by 5G operations, the sector will consolidate within the year,” he said.
According to him, telecom infrastructure will expand with cable acquistion.
Rewane noted that the nation’s economic performance would be largely determined by the successful implementation of the 2022 budget and the newly approved five-year development plan.
He explained that the declining inflation would be positive for consumer purchasing power, adding that monetary tightening in advanced economies could trigger capital outflows.
He also said oil price would remain relatively stable, adding that real Gross Domestic Product (GDP) growth would be sublime.
According to him, in 2022, competition between traditional banks and Fintechs will intensify, while banks with constant innovation and regional diversification will remain resilient.
He further noted that reform could be impeded by political considerations and labour union activities within the year, saying that insecurity could prove tricky to contain and would become a political campaign tool for the opposition.
Rewane also said the Central Bank of Nigeria (CBN) would likely increase foreign exchange supply to manufacturers to ease currency pressures.
He stressed that pre-election spending would be positive for aggregate demand and would as well boost corporate performance.
On the exchange rate outlook he said, the CBN would likely step up efforts towards exchange rate convergence.
He also noted that political jitters would heighten foreign demand pressures in the fourth quarter of the year.
On the risk matrix in 2022, he listed policy reversal and delayed reforms, heightened social unrest spurred by high unemployment and poverty levels and financial sector crisis, among others as things to watch out for.