The total value of transactions in the country through electronic payment (e-Payment) channels, which included Point of Sale (PoS), the Automated Clearing House (ACH) and the Nigeria Interbank Settlement System Instant Payment (NIP) rose by 5.49 per cent to N17.3 trillion in September 2020, compared with the N16.4 trillion recorded in August. The figure also included cheque transactions.

The Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, attributed the rise to the impact of COVID-19, in a report he presented at the Lagos Business School’s executive breakfast session for October, a copy of which was obtained at the weekend.

He stated that the figures were obtained from Nigeria Interbank Settlement System (NIBSS). The spike in e-banking activities was necessitated by the outbreak of the Coronavirus, which has seen more bank customers embrace alternative banking channels, as part of efforts to avoid contracting the virus. According to the report, the figure was expected to rise to N18 trillion in the near term, adding that the NIP has surpassed pre-pandemic levels.

This, he said, was due to the convenience associated with e-payment as well as the slow foot traffic in banking halls. Reviewing economic activities in September, Rewane pointed out that the average oil price in the month fell by seven per cent to $41.89 per barrel, from $45.02 per barrel in August, while oil production was flat at 1.482mbpd. Also, the amount the Federation Account Allocation Committee (FAAC) shared in September inched up by 0.84 per cent to N682 billion, while headline inflation jumped to 13.22 per cent.

Similarly, as of the end of September, the opening balance of the banking system was N400.70 billion; cash in circulation declined by 1.25 per cent to N2.37 trillion (in August) and the stock market rallied 5.9 per cent in response to lower interest rates in the decade. “Speculative investors, foreign portfolio investors (FPI) flows trapped, and high dividend yields drawing stocks to giddy heights,” he added.

He also anticipated that third-quarter Gross Domestic Product (GDP) growth would remain negative, predicting that the rate of contraction could slow on increased economic activities.

He predicted a GDP contraction by 3.5 per cent in the third quarter of 2020 as well as a full year contraction by 3.3 per cent. “Slow and gradual recovery expected ahead of 2021 (1.8 per cent). The ICT sector will continue its reign in Q3 2020, the aviation and education growth to pick up on resumption of activities, especially international and domestic flight resumption and re-opening of schools.

“Agric sector growth likely to slow on flooding and insecurity in major food-producing states. Inflationary pressure to persist and headline inflation to maintain upward trajectory,” he projected.

He predicted that inflation rate would climb to 14 per cent in September and rise further to 15 per cent in October. “Food sub-index will remain the major culprit. Inflation in 2020 could rise beyond the Central Bank of Nigeria’s 14.15 per cent projection and consumer disposable income to remain suppressed,” Rewane, who is a member of President Muhammadu Buhari’s Economic Advisory Council anticipated.

In envisioning the possibility of a Joe Biden’s presidency for the United States of America, Rewane, in his assessment, said it would bring about tax reform – increase taxes for the wealthiest Americans; will gradually shift back to free trade from current protectionist leanings; will not undermine the US Fed – with tweets and calls for rate cuts; the US will re-join the Paris Climate Agreement; US-China rapprochement; and return to multilateralism in relationship with Africa; Iran’s nuclear deal will be revisited.

First published on Thisday