By LOVETH AZODO, Lagos
Following the rise of the price of crude oil in the international market, the Chief Consultant of B. Adedipe Associates Limited, Dr. Biodun Adedipe, has called on the Federal Government to use the surplus to either reduce the budget deficit or use it to build infrastructure.
He said that for the economy to grow, the Federal government must to make insurance sector vibrant to enable businesses and individuals to take risk.
Adedipe made the call at a media parley sponsored by Boff Insurance Brokers Limited and B. Adedipe Associates Limited, in Lagos.
According to him, government’s revenue is ecpected to increase as the price of crude has been favourable to the economy.
He said “the price of crude has been favourable to us. It is either you use the gain to reduce the deficit, or alternatively, you use that gain to build infrastructure, which ultimately will also increase government revenue.”
On the effect of the 2023 election on the economy, he warned that the forthcoming election could create liquidity pressures in the economy as there will be too much money in circulation.
“In pre election years, politicians spend a lot of money and that creates liquidity pressure. You have so much money circulating and that stands to put pressure on prices, so it will be expected this year that there will be inflationary pressure.”
Adedipe lamented on the high volume of imports against exports in the country, he added that it has been creating more employment for other countries hence robbing the nation of opportunities.
He said “In recent years, imports value in Nigeria had become far greater than exports. Yes we export crude oil, we export condensates, as well as associated gas. Inspite of that, we have been importing more than exporting and that has been creating employment for other countries to the detriment of our country.”
Adedipe noted that, there is nothing wrong with borrowing, adding that, “but don’t borrow to buy food, don’t borrow for consumption, if you must borrow, borrow for anything that is investment in nature. We produce crude oil but don’t refine”
On the insurance sector, Adedipe noted that enforcement of compulsory insurances has always been an issue in the country.
He called for the need of flexibility urging that the federal government should be responsible to its insurance responsibilities by ensuring that premium is paid.
“For the insurance sector to grow, government need also to be responsible to its insurance obligations which talks about paying premium. There also must be need for flexibility and also ensuring that compulsory insurance is enforced because enforcement had always been an issue.
In his optimism he said “If the government is responsible and put a lot of effort into enforcement, then what we have today as compulsory insurance we can actually create more value from. And when insurance sector is vibrant, it will galvanize businesses and individuals to take risk and that is how economies grow.
“The freedom to take risk is on the back of a vibrant insurance sector, so the conversation should be how do we make that sector vibrant and that brings us to involve more interactions between government agencies and the insurance sector, so that all the stakeholders constantly are engaging and so whatever is needed to be done to make us deepen insurance, the government will keep making that happen.” He said
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