By Ikeoye Oyetoro
The Governor, Central bank of Nigeria (CBN), Sanusi Lamido Sanusi has been advised to put in place appropriate measures that will encourage banks to resume lending especially long term loan to the manufacturing sector.
The Chairman of Vitafoam Nigeria Plc, Chief Samuel Olaniyi Bolarinde who gave this advise during the annual general meeting of the company held at the Lagos Sheraton Hotel said that virtually all the banks have stopped giving credit facilities to businesses since the commencement of the banking reforms introduced by the new CBN Governor and this led to the collapse of so many companies.
According to him, the global economic crises that started early last year affected Nigerian economy so bad that the strong financial system of the early year collapsed as a direct effect of the crash in theÂ Â Â Â financial market and also revealed the unhealthy debt portfolio of the number of our supposedly strong banks.
Chief Bolarinde noted that most manufacturing companies depend largely on imported raw materials and the exchange rate of the naira to the dollar which crashed by about 30% from N118, at the beginning of 2008, to N152 towards the end of that year made so many companies to suffer heavy foreign exchange losses adding that most transactions consummated at the close of that year suffered from the unanticipated depreciation.
He also appealed to the federal government to take the opportunity of the relative peace in the Niger Delta to address the problem of energy in the Country and resolve it before long as electricity plays a major role in the development of any nationâ€™s economy.
The Vitafoam Chairman disclosed that despite the harsh economic enviroment which made it difficult for business to thrive, the company still recorded some growth as turnover increased from N8.17billion in 2008 to N9.76billion in 2009 although Profit before Tax (PBT) and Exceptional Income dropped by 13% from N883.3million to N776.9million as a result of high cost of operation especially the increase in the cost of funds and exorbitant cost of providing power to run factories.
Chief Bolarinde however announced that Vitafoam in its effort to continually provide goods and services for human use has diversified its operation into providing insulation solutions to users in Various sectors of he economy particularly , the agricultural sector(floating fish cage and poultry houses) and the construction industry(roof insulation and cavity filling) .
He however commended the federal government for the amnesty programme which has brought relative peace into the Niger Delta region and advised the government to develop the region by engaging the youths in productive activities in order to sustain peace in the region.