. GDP to grow by 1.2 per centInflation may slide to 15 per centFinancial analysts have expressed optimism that the countrys economy would experience increased activities in 2017 if innovative macroeconomic policies are deployed by the government.Managing director and chief executive of Financial Derivatives Company Limited, Bismarck Rewane foresees the economy picking up and estimates that GDP will grow by 1.2 per cent in 2017 as against negative growth of 2.24 in 2016. Rewane also expects inflation to slow to between 15 and 17 per cent in the course of the year.Manufacturing Sector Policy Is keyFormer chairman, Ikeja branch of Manufacturers Association of Nigeria (MAN), Sam Ohuabunwa, said If Nigeria pursues a determined manufacturing policy, most of our current economic challenges-high unemployment, high inflation, high exchange rate etc will abate, adding that since the decline in productivity was at the core of the recession, there was need to ramp up production. President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. Edem Bassey said fiscal policy, in the short-term, should focus on pushing down costs, especially those related to power generation as this has been shown to be a major component of production costs.He called for the liberalization of the petroleum industry and increased private sector participation in the power sector. He notes that with reduced production costs will come reduced product prices; a lower inflation rate would encourage a fall in the MPR and interest rates, effectively channeling more funds to the real sector.On food security, import substitution and the manufacturing sector, Edem said government policies should stimulate local production and processing of raw materials. Although protection of infant industries by banning foreign alternatives may be necessary to correct the imperfections in the market, the government should realize that the abrupt nature of such sudden policy shift creates uncertainty even within the industry to be protected.President Manufacturers Association of Nigeria (MAN), Frank Jacob, advocated a framework to ensure liquidity of the foreign exchange market, relaxation of tight monetary policy, review of unnecessary protectionist policies, encouragement of investments in agriculture as well as food processing among other measures that may restore investors confidence.Also speaking, director-general, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, noted that measures, such as creation of new ideas, policy design and documentation should be embarked upon to keep pace with the rapidly changing economy. He urged the government to prioritise appropriate policies to drive the economy.Higher Oil Prices To Influence Stocks GrowthThe Nigerian stock market recorded a decline of 6.2 per cent in 2016 as the index posted a loss for the third consecutive year on the back of weaker domestic macroeconomic fundamentals and high discount rate which pressured earnings of companies and also weighed on investor sentiment. Experts have noted that the developments in the global oil market, liquidity level in the foreign exchange markets, and realignments in fiscal and monetary policies would dictate trading pattern and performance of stock market in 2017.Banks To Raise Capital To Boost OperationsHead of Research at Sterling Capitals, Sewa Wusu, said We expect to see a flurry of Eurobonds in 2017 and for those whose shareholders are willing to raise their stake, there will be rights issue. Managing director of Stockswatch Limited, Mr. Abayomi Obabolujo states that performances in 2017 will be somewhat better than what obtained in 2016 in the sense that 2016 came more without notice.Liquidity as well as rising non-performing loans have been an issue for the sector in 2016 and analysts believe banks will continue to be wary of lending in 2017. This is due in part to the present economic condition of the country which has reduced purchasing power and making it harder for borrowers to meet up with their obligations.Banks are expected to raise funds through the debt market as well as through equity in 2017 to shore up their Capital Adequacy Ratio (CAR) even as operators in the financial sector hope on the proposed increased spending by the federal government this year.Experts say part of what the government must to do in 2017 in the direction of economic recovery is to ensure the closure of the wide gap between the value of the naira at the interbank and parallel foreign exchange market. This, they hope will be done through the harmonization of the various rates prevalent in the market.President, Association of Bureau de Change Operators Of Nigeria (ABCON), Aminu Gwadabe, said policy makers should try as much as possible to harmonize the different rates in the market in 2017. Various rates exist in the market: the CBN rate, the budget rate, the interbank rate, International Money Transfer Operators (IMTO) rate, Western Union rate, pilgrim rate, BDC rate.RBS Comes On, Insurance Firms To ConsolidateBarring any last minute change, the implementation of Risk Based Supervision (RBS) may commence in insurance industry this year. Already, National Insurance Commission (NAICOM) has come up with a draft to which the insurance operators are expected to make inputs in the next four weeks, after which the final copy of the new supervision template would be made public.NAICOM has intensified efforts to ensure that the new supervision template commences as soon as possible, noting that RBS will reposition insurance industry for the better. When RBS finally takes off, it will signal an end to the compliant-based supervision, currently in use. Apart from the fact that consolidation is imminent under RBS, there will also be an embargo placed on some illiquid firms to underwrite certain businesses.Commissioner for Insurance, Mr. Mohammed Kari, said Consolidation is inevitable. We have many players in the industry that do not add value to the services they provide, both in the intermediary and insurance sectors. Consolidation does not mean just an additional capital; it could be redefining and identifying the type of insurance business you want to operate, he pointed out.This will, however, translate to another form of recapitalisation in insurance industry as operators would be asked to maintain a certain level of capital base to underwrite certain businesses. To deepen insurance penetration and acceptance, NAICOM is set to introduce new channels of insurance distribution in the country this year.Director-general, Chartered Insurance Institute of Nigeria (CIIN), Mr. Olutayo Borokini, said access to foreign exchange will spring up economic activities, especially in some sectors that are driven by forex. Some investors had recently come into the Stock Exchange, they brought in money to buy shares. Of course, capital is going to be available, and if capital is available, the economy will jump-start and a lot of activities will pick up and demand for insurance will increase automatically, Borokini said.Improved Aviation Operation And Security ExpectedThere are strong beliefs that the year 2017 would be better in terms of safety and aviation infrastructural improvements. If the airport concession plan by the federal government sails through, it then means that there would be infrastructural developments at the various airports, particularly, Abuja, Port Harcourt, Kano and Lagos.It also means better operational framework for both the passengers and airline operators. With good airport facilities, the operators are bound to offer better services this year. It is also expected that there would be improved connectivity within the African region, following the grant of flight operations license to Niger Republic by NCAA. The airlines which got the designation are: Overland Air, Arik Air, Air Peace and Azman Air Services.With the issue of security and anti-terrorism strategy, which will continue to take prominence in 2017, the year may usher in the possible use of drones in Nigeria airspace.The Nigeria Civil Aviation Authority (NCAA) is collaborating with the office of the National Security Adviser (ONSA) and other industry stakeholders to articulate the use of Unmanned Aerial Vehicles (UAV)/ Remotely Piloted Aircraft (RPA) in the Nigerias airspace.It is also expected that the lingering problem of aviation fuel scarcity will give way in 2017. It can also be recalled that the President Buhari-led government recently granted forex concession to both local and foreign airlines to assist the airlines in their operations. With governments assistance in this regard, airlines operations will never remain the same in 2017.Housing : Pension Fund Can Be HarnessedAlthough the problems in housing identified decades ago have remained the same problems till now, operators in the real estate are of the view that impressive impact could be made in the sector in 2017 if the Federal Government overhauls the nations housing delivery system. The Lagos branch chairman of Nigeria Institute of Estate Surveyor and Valuers (NIESV) Mr. Offiong Ukpong, said the housing sector could witness a boost in 2017 if the pension fund is ploughed into housing sector.According to the Faculty Housing chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Elder Biodun Odeleye, N70 trillion is estimated as financial requirement for bridging the housing shortfall in Nigeria. He said the figure was based on an average cost of N3.5 million per unit of about 20 million houses being lacked in the country.
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