Experts seek increased investment in deficit sectors of economy

Experts at the 2018 Investment Advisers and Portfolio Managers (IAPM) forum/launch of Association of Corporate and Individual Investment Advisers (CIIA) called for increased investment in needy sectors to drive economic growth.

They believe that major challenges to some sector in the economy were poor funding and lack of access to finance, stating that this will be a major catalyst to drive expansion and growth in those sectors.

Bolaji Balogun, CEO at Chapel Hill Denham, in his remark urges investment advisers and portfolio managers to enhance their relevance and also take up the role of forming capital and ensuring its transmission into required areas.

Balogun says this while delivering a speech at the forum with the theme: “The Future of Investment Advisory.”

He also mentions the need for investors to invest in appropriate instruments and sectors regardless of their duration. Addressing the importance of the capital market, he says banks are important but the capital markets are much more important, as he states that there is no developed market without a good and diverse capital market.

Using an analytical data that show Nigeria has substantial deficit in education, infrastructure, healthcare and housing coupled with the rapid growth rate of the population, which is greater that the economic growth rate.

Nigeria could become the largest failed state in history if it is continually financed in the way budget is structured, but if financed successfully, the Nigerian economy has the ability to run at 78 percent annually thereby becoming the seventh largest economy in the world by 2050, which will be an upward movement from its present ranking as the 25th largest economy in the world, he says.

He further analyses that by 2050, Nigeria will also be the most populous nation on earth with a forecast of over 45 million people, which significantly means the continuous expansion of deficits, especially the housing deficit, will move from 20 million to 50 million.

Also present at the event was Abimbola Ogunbanjo, president, Nigerian Stock Exchange, who says the Nigerian pension industry is fast growing with a growth of N265 billion in 2006 to N8.14 trillion in 2018, adding that the ratio of the total pension assets to the GDP is 7 percent compared to other African countries like South Africa, which is 52 percent and Kenya at 14 percent.

“This exponential growth is a pointer to the nation’s growing interest and awareness on pension matters,” he says.

According to Ogunbanjo, bridging the gap between investment professionals and also adhering to the highest level of ethical standards can only secure the future of investment advisory in Nigeria.

Also, Abimbola Olashore, president of the council of IAPM, states that the CIIA was established to effectively serve the market and ensure no area is neglected in the Advisory services space.

Credit: BusinessDay