During a roundtable session organised by the Chartered Institute of Bankers of Nigeria Centre for Financial Studies, a subsidiary of the Chartered Institute of Bankers of Nigeria (CIBN), in collaboration with B. Adedipe Associates Limited, bankers disclosed that there may be more mergers and acquisitions in Nigeria’s banking sector in the 2019 financial period.
The roundtable session was on the fifth annual Economic Outlook with the theme, ‘Implications for businesses in Nigeria’.
The outlook, which was initiated in 2014, was designed to study both global and Nigerian economies in the preceding year, review the expectations of businesses in the current year in relation to global economic and political developments, analyse the implications of the developing economic and political trends for key business sectors, and discuss feasible business survival strategies under the prevailing economic conditions.
The outlook for the economy in 2019 was expected to be mixed in the midst of global uncertainties and domestic challenges.
A section of the report on the economic outlook roundtable on implications for businesses in Nigeria in 2019, which was presented by Olufemi Fabamwo, revealed that more unexpected events could be witnessed in the country’s baking sector.
The report read “Access bank and Diamond bank’s combination is expected to be consummated in 2019. Further opportunities and appetite for such mergers and acquisition in the banking sector may be witnessed”.
In the report, it was also noted that expectations and implications for the business sectors would also be varied. The output growth, it stated, was expected to be driven by fiscal stimulus from an increase in oil and non-oil receipts.
The report also addressed the implementation of the Federal Government’s Economic Recovery and Growth Plan, Implementation of the FG’s Strategic Revenue Generation Initiative, and Executive Order No. 7 on Road Infrastructure and Investment Tax Deal. The report explains that the initiatives will have a positive impact on growth and employment.
The bankers noted that the Gross Domestic Product (GDP) was projected to grow by 2 percent by the International Monetary Fund, 2.2 percent by the World Bank, and 2.28 percent by the Central Bank of Nigeria.
The bankers also expected a widening budget deficit, owing to recent fall in oil price, the OPEC quota cut, the new minimum wage, ASUU demands, among others.
It was also noted that deficit financing of the 2019 budget (mainly for recurrent expenditure) will further escalate the country’s debt profile and contribute to further crowding out of the private sector with the attendant negative impact on economic growth.