By Omodele Adigun
Access to finance, availability of foreign exchange (forex) and Public-Private Partnership (PPP) seem to be the priorities of stakeholders as the country opens for business this new year.
These are among the issues they expect interventions from both the commercial banks and the Central Bank of Nigeria (CBN) to enhance operating environment.
For instance, Dr Timothy Olawale, the Director General of the Nigeria Employers’ Consultative Association (NECA), who praised the CBN for encouraging lending to the real sector of the economy, said there should be close monitoring of its numerous intervention funds to ease its stringent conditions.
According to him, stakeholders are still finding access to the funds difficult. He also cautioned the banks against taking steps that could raise the level of non-performing loans(NPLs) so as to avoid crumbling the financial institutions.
His words: “With about N3.5trillion intervention measures by the CBN, this portends to have sizeable impact on the economy, nevertheless, a thorough monitoring in its disbursement process should be guided, as stakeholders are still finding access to the policy stringent. Commercial banks, developmental banks and the supervisory department of CBN should be more guided against increasing non-performing loans, in order to forestall collapse of our banking institution. Continued strict maintenance of high risk management practices regarding lending operations should be adhered to.”
As for Mr Nnamdi Okafor, the immediate past Managing Director of May & Baker Plc, forex is a major issue. According to him, “forex is the major issue because, for you to be able to import whatever, you need forex. whether it is for intervention fund or for normal operations.”
He added: “It is almost impossible to get up to 20 per cent of your forex needs. This has made our cost to go up. For instance, as against N380 per Dollar in our plan for exchange rate this year , today, we are getting Dollar for about N470; N450 . So it has given us huge exchange rate loss. We have to take care of that major loss. It is a major issue for our profit and loss. It is also making the product more expensive. Sometimes, it is also making it difficult for us to bring in our products. So there is scarcity of some of our products in the market. The most painful to me really is that for most of our suppliers who have confidence in us, some of them gave us credit, we were unable to pay them when this money was due. And there are instances, we were blacklisted in China. It is very pathetitic because it was not as if we didn’t have the Naira to honour our obligations but there was no forex. So it is a very big problem for us as business and for other companies in this space.
“What we demanded from the CBN and, of course, the Federal Ministry of Finance is to implement fiscal measures that will make locally manufactured products more competitive in the markets compared to the imported ones. For example, controlling products that come into Nigeria, the way local companies that manufacture here are able to access funds. That is what we demanded from the CBN and, of course, the Federal Ministry of Finance.”
With these and more public expectations from the banking system, the President of Chartered Institute of Bankers of Nigeria (CIBN), Bayo Olugbemi, called on the lenders to carve out new roles for themselves in achieving sustainable future for the country.
He noted that “given the recent disruption caused by the impacts of the Covid-19, the role of banks have become more important now than ever before.”
As for the Lagos State Governor, Babajide Sanwo-Olu, the banks should put their money into developing Nigerian cities and states.
He explained that the public sector could not do it alone without the cooperation of the organised private sector.
His words: “For us in Lagos, one of our primary responsibilities is to expand a space for you, the private sector; to put your money and your resources and creativity into the development of our various states and cities, Lagos inclusive. We must create an enabling environment for you to do what you do best. And as bankers and financial service providers, which mobilise and deploy capital for solving vital problems, I invite you for collaboration in creating a sustainable future.”
Even, the CBN Governor, Goodwin Emefiele, was not left out in soliciting the help of the lenders, especially, in exiting recession during this first quarter of the year.
According to him, “we do expect that the Nigerian economy could emerge from the recession by the first quarter of 2021. with sustained implementation of our intervention measures.
“The banking sector, therefore. has a significant role to play as a facilitator of growth in the agriculture sector, through its intermediation function.
These measures would help to improve productivity of farmers, reduce post-harvest losses, increase access to finance for farmers and improve sourcing of local raw materials for processing by manufacturing and industrial firms. It will also aid improved production of local goods, enable the creation of jobs, while supporting the growth of other sectors of our economy such as manufacturing, and transportation.
“Information Communication Technology(ICT) is another sector which has emerged as a significant source of resilience in mitigating the impact of COVID-19 on the economy. In the third quarter of 2020, the ICT sector made contributions of over 17.8 per cent to GDP growth, 47 per cent higher than its contributions a year earlier. The growth of startups in the fintech and health care space rose in response to the pandemic. It is important that we leverage ICT as an enabler for growth in key sectors of the economy. ICT start-ups are emerging to support SMEs, farmers, and in providing quality learning to students. It is important that the banking sector consider viable IT firms in these areas that have the potential to, not only serve the needs of the local market but are also able to export ICT-Related services.”