FirstBank and the Culture of Promoting Dialogue for Economic Prosperity

As a leading financial institution in the country with over 30 million customers, First Bank of Nigeria Limited (FirstBank), which also holds the title as Nigeria’s oldest financial institution, has been repeatedly seen expressing interests and concerns that can lead to economic growth for the country.

As its primary assignment, FirstBank provides various financial services to boost financial inclusion in Nigeria and consequently raise the bar of the economy functionality through access to its products and services.

Beyond this however, the financial institution deploys various other initiatives to create economic intelligence, not just for its customers but for all stakeholders in the wider spectrum of private and public sectors.

Its annual Nigeria Economic Outlook fits into its culture of promoting dialogue to engender economic prosperity and for the new 2023 fiscal year, it recently held the event with the theme: ‘A Look Ahead 2023’, where industry experts addressed salient economic issues and charted way for a prosperous 2023.

According to Ini Ebong, Executive Director of Treasury and International Banking at FirstBank, who gave the opening remarks at the event which held virtually, FirstBank is committed to leading the discourse on pertinent issues of national and global interests.

Mr. Ini Ebong

“Hosting this webinar, therefore, affords our Bank the opportunity to provide the platform for interested players to analyze the nation’s economy in retrospect, draw lessons from the gains and pains of past years, and chart a course for adjustments, consolidation, and strategic decisions for the common good.

“There is no gainsaying that one of the most effective ways to make projections is to look back and appraise previous scenarios. The theme for this year, “Nigeria Economy Outlook webinar 2023 – A look ahead”, is very instructive. Looking at 2022 in retrospect, a lot of developments around the world fiercely challenged whatever gains were made from the major recovery from the impacts of COVID-19 in 2021,” he said.

Reasons for the 2023 Dialogue

The need to take a look ahead for 2023 became imperative as the aforementioned various developments around the world made 2022 a turbulent year for many businesses and nations.

One ways this has manifested is that the global economy, for example, witnessed all-time high inflation rates and unabated increase in high costs of living and doing businesses. Nigeria economy was not spared from this burden as the country closed the year 2022 with 21.34% inflation rate.

The Russian-Ukraine War, which still persists, created trade tensions across the globe just as the fourth wave of the COVID-19 – Omicron Variant – that surfaced towards the end of 2021, has continued to generate increasing concerns with alarming statistics.

In Nigeria, the rising monetary policy rates, increasing debt portfolio, volatile revenue from crude oil and brain drain due to talent emigration, amongst many other factors, also became a wake-up call for proper dimensioning of issues to drive fiscal and other policies that will be instrumental to ensuring the gains of previous years are sustained and that the economy wades through the seemingly consistent challenges.

More importantly, 2023, being an electioneering year, has increased the chances of macro and micro economic challenges that may exacerbate the attendant hiccups of changes in political administration, especially at the federal level.

Economic Concerns

To provide useful insights and guidance for navigating these challenging times, FirstBank assembled a team of well-rounded experts led by the Keynote Speaker, Dr Abiodun Adedipe, Founder and Chief Consultant, B. Adedipe Associates Limited (BAA Consult) to demystify the components of the subject matter, and point to germane areas for progressive conversations in the country.

Dr Abiodun Adedipe

In his keynote address, Adedipe drew intelligence from global economic scenarios such as supply disruption of major commodities, increased global energy prices amidst shortages that triggered global inflationary pressure, Slowing Chinese economy due to zero-Covid policy and soft real estate sector; and Stagflation reality and impending economic recession in 2022/2023.

Other economic concerns of note addressed by the lead speaker include strong US dollar causing currency crisis in many countries including Nigeria, changing workplace dynamics, global debt upswing to $295 trillion in 2021, being 320% of GDP in 2019 and 355% in 2021 and upward adjustment of policy rates that raised borrowing cost for governments, corporates and households.

In the local environment, Adedipe did not only dissect economic bottlenecks of the recent years but also identified the bright spots during the period.

For instance, he hinted investors that the Nigerian economy is diversified and there are business opportunities in every sector of the Nigerian economy, given that annualized average of 2.97% GDP growth in Q1-Q3’2022 of the Nigerian economy presents business opportunities still.

During the period, he noted that oil accounted for 79.1% of foreign trade but only 6.21% of GDP in Q1-Q3’2022 due to external vulnerability, while Agriculture (29.67%), Trade (15.35%) and ICT (15.35%) remained dominant in Q3’2022.

Global Outlook for 2023

Latest forecasts by BBA Consults indicate a sharp, long-lasting slowdown in the economy, with global growth declining to 1.7 percent in 2023 from 3.0 percent expected just six months ago. This is in tandem with projections of international institutions such as the International Monetary Fund (IMF) and the World Bank. The deterioration is broad-based, that is in virtually all regions of the world, with per-capita income growth slowing than it was during the decade before COVID-19.

The expert warned at the FirstBank virtual forum that the setback to global prosperity will likely persist. By the end of 2024, GDP levels in emerging-market and developing economies (EMDEs), such as Nigeria will be about 6 percent below the level expected on the eve of the pandemic. “Median income levels, moreover, are being eroded significantly—by inflation, currency depreciation and under-investment in people and the private sector.”

Forecasts for Nigeria

Speakers at the FirstBank’s 2023 Nigeria Economic Outlook further dissected the theme of the forum during various panel sessions that focused on sub-topics such as Key takeaways from the 2022 Economic Year; the effects of currency devaluation and forex to the GDP; Domestic issues likely to affect how we live and spend; Major developments that will shape Nigeria’s Economy in 2023 and Policy Responses; and 2023 Growth Projection for Nigeria’s Economy.

These discussions pointed to forecasts summarised as follows:

• Positive Gross Domestic Product (GDP) growth in 2023: slight improvement over expected 3.19% for 2022: Improve to 3.27-3.32%%.
• Inflation rate is expected to moderate, but still double digit. Expect 17.76%.
• Monetary policy normalization could start as early as Q2, but assured for H2, with downward adjustment of MPR certain for H2. Expect 13.5%.
• Bank lending rate will remain double digit, but continue to respond to the rate of inflation.
• Accelerated manufacturing and focused export promotion will bring some stability to the Naira exchange rate. Official likely at about N480/$ and roadside at N705/$.
• Improvement in infrastructure will begin to positively impact the cost of doing business.
• Intensified digitalization and ascendancy of the digital economy.

Last Line

As a bank woven into the fabric of the society, FirstBank has a legacy of supporting the growth of businesses as the engine for economic growth and development in Nigeria, across Sub-Sahara Africa and beyond.

“In line with our renewed vision “to be Africa’s bank of first choice”, we will take the lead in driving the development of different sectors and industries within the economies where we operate, to support the nation’s overall economic growth and sustainability,” said Folake Ani- Mumuney, Group Head, Marketing and Corporate Communications at FirstBank.