Deposit Money Banks in the country have been urged to make long term investments in infrastructure in order to fast track the development of the nation’s economy.
The Director General of West African Institute for Financial and Economic Management (WAIFCM), Prof. Akpan Ekpo, gave the advised in Lagos.
Ekpo, who was a keynote speaker on the topic, ‘ The Nigerian Economy in Distress: Policy Choices for Buhari Administration’ at the inaugural launching of Centre for Financial Journalism, said that most banks are declaring profits because they did not invest for long term, but short term like treasury bills.
According to him, the only way to provide liquidity into the system is for the Central Bank of Nigeria, CBN, to reduce Monetary Policy Rates, MPR, to encourage banks lend to manufacturers, particularly the private sectors.
He explained that the movement of macroeconomics variables such as the rates of inflation and unemployment, lending rates, growth in Gross Domestic Products, GDP, and investments/GDP ratio as well as deficit/GDP ratio would suggest whether an economy is performing satisfactorily or not.
“In addition, indices like money supply/GDP, credit to the private sector/GDP, capacity utilization would indicate the performance of the financial sector.
“In certain instances, the macroeconomic management includes the strength of the financial sub-sector which is perceived to be the hub of any economy,” he added.
On the policy choices for Buhari administration, he said investments in power particularly would enhance growth and generate employment, creates new micro and small scale industries as well as sustaining the existing ones.
He noted that the release of the fund for infrastructure in the 2016 budget would enhance liquidity in the system.
Ekpo, who said that relevant macroeconomic and social indices show that the Nigerian economy is in distress, noted that the high rates of unemployment combined with reduced output in two quarters of 2015 suggest an economy in the sphere of stagflation, a prelude to recession.