In order to revamp the nation’s ailing economy, The Chairman of African Centre for Business Development Strategy and Innovation (ACBDSI), Mazi Sam Ohuabunwa, has urged government to liberalize access to finance.
Speaking at this year’s independence anniversary lecture organized by The Business Club Ikeja (BCI), Ohuabunwa expressed serious concern over the present state of the nation’s economy.
With the theme: “A toast to Nigeria at 56, the way forward for the economy,” he noted that our economy is in recession following negative GDP growth in the last two quarters of 2016, -0.36 per cent and -2.06 per cent in Q1 & Q2 respectively. Inflation seems to be galloping reaching 17.5 per cent in July. Interest rates remain high nevertheless as the CBN struggles to contain the galloping inflation, maintaining the MPR at 14 per cent. Much of the inflation is driven by the steep depreciation or devaluation of the Naira against foreign currencies, especially the US dollar. Before the Independence holidays, the US dollar exchanged for 475 Naira in the real foreign exchange market.
On liberalization of access to finance, he said ‘government should make it extremely easy for businessmen and investors to access funds in the economy at single digit interest rates; simplify the existing funding programs from CBN, BOI, Agric Bank, Infrastructure Bank and other such financing institutions; offer longer tenures and get existing loans to commercial banks restructured under the supervision of the CBN.
Speaking further, he said: “At the core of the recession is decline in Productivity. To reverse it therefore, we must quickly ramp up productivity. To achieve this, we must put capital to work through extensive and intensive Public sector capital and social sector spending. Hence the government must find creative ways to fund the 6.6 Trillion 2016 budget. If revenue shortfalls persist or intensify, then we must borrow fiercely and if borrowing is slow or becoming difficult, then let’s us sell poor performing assets and create new assets.
He also urged government to invest in agriculture and manufacturing sectors. According to him ‘The lowest hanging opportunity for Nigeria to ramp up Productivity and reduce unemployment is to increase agricultural productivity through a harmonization of the several programs and initiatives started with the Agricultural Transformation Agenda of Akinwumi Adesina and the Green Alternative Roadmap of Minister Audu Ogbe; promotion of commercial Agriculture and the development of the value chain. Next is the linkage to Manufacturing and all forms of value addition. Here the directive by the CBN to the Banks that 60 per cent of forex should be preferentially allocated to the Manufacturing sector must be enforced.
Finally, he urged government to adopt a strategic stable policy environment and also address issue of security.