ByÂ Â Michael Eboh
The Nigerian Stock Exchange (NSE),Â has blamed banks for the current challenges threatening the stability of the countryâ€™s financial system.
NSE also blamed the crisis in the economy to the over N700 billion margin loan facilities granted by banks to real estate speculators.
Speaking during a town hall meeting with chief executive officers of quoted companies, NSE’s Director-General, Professor Ndi Okereke-Onyiuke, exonerated stockbrokers from the crisis, noting that of the trapped N1 trillion margin loan granted by banks, only N300bn was in the hands of stockbrokers, while the remaining N700bn was given to investors in the real estate sector.
She said, â€œIt should be noted that we at the NSE and the Central Securities Clearing System (CSCS) are in possession of data of margin loans facilities in the economy due to the role played by us in this regard.
“From the records in our system, from the over N1 trillion margin loans granted by banks, only N300bn are in the hand of stockbrokers. The remaining N700bn were advanced to real estate investors and speculators.
“The global financial meltdown negatively affected the servicing of these loans as the banks could no longer advance more credit to these speculators to finish their housing projects, leading to the abandonment of these projects.
“A case in point is the Banana Island and Lekki Phase One and Two Housing projects.
“Many of the houses in these locations and other locations were built with funds from the capital market.
“It now became very difficult for the investors to service the loans collected from the banks, thereby causing serious liquidity crisis for the banks,â€ she added.
She also called on the Federal Government to abandon the seven-point agenda and focus on a single agenda, especially on power generation.
She noted that the major challenge confronting quoted and non-quoted companies in the country is the issue of power, advising the government to focus on improving power supply.
If this is done, she argued, a lot of other problems would also be addressed, as the quoted companies would also contribute significantly in providing basic infrastructure facilities in their areas of operations, if their cost of operation is considerably reduced.
Speaking in the same vein, some of the chief executives of the companies supported the call for the abandonment of the seven-point agenda, tasking the government on the need to effectively address the epileptic power situation in the country to save the economy from total collapse.
Chief Gbade Giwa, Managing Director, Tripple Gee and Company Plc, called on government at all levels to give power generation priority in their agenda, so as to help businesses reduce their cost of operation.
He tasked the governments to consider developing alternative sources of power generation.