Nigeria’s Financial Service sector is expected to continue its 2021 progress and grow by 8.32%.
This was revealed by the Managing Director/Chief Executive Officer, Financial Derivatives Company, Mr Bismarck Rewane, at the Nigerian Economic Outlook 2022 webinar organised by First Bank of Nigeria Ltd. on Thursday in Lagos, according to NAN.
He stated that growth would also be impacted by increased collaboration with fintechs in promoting financial inclusion, while also citing that tier-1 banks would leverage their robust customer base and balance sheet size.
Rewane said there would be aggressive digital innovation and lending solutions as well as possible mergers and acquisitions within and across tiers to boost capital structure.
“Players would benefit from volume and value growth. Top players (Nestle Nigeria and Unilever) will report profit growth of 20% in 2022.
“Agriculture sector is likely to grow by 1.6% in 2022, an efficient rail system will ease logistics constraints and boost productivity.
“The ICT industry would likely grow by 9.72 per cent in 2022 with telephone penetration on the rise.
“There will be a 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.
He added that declining inflation would be positive for consumer purchasing power, adding that monetary tightening in advanced economies could trigger capital outflow, citing that the GDP growth perspective would be sublime as oil price remains stable.
“Competition between traditional banks and Fintechs will intensify, while banks with constant innovation and regional diversification will remain resilient,” he stated.
On Manufacturing, he forecasts that the Central Bank of Nigeria (CBN) would most likely increase supply to manufacturers to ease currency pressures.
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.
The Nigerian financial sector, which comprises the finance and insurance sectors recorded a growth rate of 23.23% in the third quarter of 2021.
Growth recorded in the sector is higher by 20.02% points from the rate recorded during the same period in 2020 and up by 25.71% points from the rate recorded in the previous quarter.
The contribution of finance and insurance to real GDP totalled 3.16%, which is higher than the contribution of 2.67% recorded in the third quarter of 2020 by 0.49% points, but lower than 3.72% recorded in Q2 2021 by 0.56% points.
The sector’s contribution to the overall nominal GDP was 2.70% in Q3 2021, which is higher than the 2.46% it represented a year before and lower compared to the contribution of 3.21% it made in the preceding quarter.