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Smugglers have collapse Nigerian industries , Okolo

By Franklin Alli
Dr. Simon Chukwuemeka Okolo, National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and member of the Presidential Advisory Council (PAC) bears the Association’s mind on the banking reform as its affecting the industrial sector, and other issues in the economy.

Dr. Simon Chukwuemeka Okolo

What is NACCIMA’s position on the banking sector reform initiated by CBN Governor, Sanusi Lamido?
Though we support the efforts of the CBN boss to sanitise the banking sector, yet there is need not to prolong the reform so that investors’ confidence don’t get eroded from the system.

Also, there is need for flexibility in some of his policy directives, like his core banking services advice.
Sanusi’s use of non Operating Holding Company (Holdco) model with subsidiary companies Subco, for banks that want to retain their non-core banking operations in his review of universal banking is very confusing.

It is a very complicated system that might make the financial system worse off. Sanusi’s idea of instilling corporate governance to stem mismanagement of investment funds though commendable has not really addressed the crux of the matter.

Furthermore, a situation where the country’s hard earned foreign currency is auctioned monthly through the Bureau de Change (BDC) is not very healthy for the economy, since smugglers of contraband good find BDC dollars a ready source for their dollar requirements while looters of public treasures also have taken advantage of the easy BDC dollar regime.
While the smugglers have helped facilitate the collapse of Nigerian industries, as well as create unemployment and deprive government taxable revenue, the treasury looters facilitate capital flight with BDC dollars which activity was reactivated by Sanusi.

We, therefore, counseled that the CBN should restructure its activities and monitor the banks as required because effective corporate governance couple with efficient CBN audit and monitoring will stem any unethical behaviour in the bank sector.

Are credit facilities now accessible to NACCIMA members than before?
NACCIMA members are not different from the other members of real sector operators in the economy. To be candid, it is not really clear what the CBN is doing to encourage banks to invest in the real sector.

It is the duty of the CBN to make banks see the need of making credit available to investors in agriculture, manufacturing and mining, because of their potential to  generate employment and foreign exchange earning.

As I have consistently said, the dearth of venture capital in the system has stunted investment, growth and development in the economy. Everybody is affected by the high interest rate regime in the system, for no same manufacturer can access funds from the banks at the rate of over 22 per cent as we currently have in the country.

If there is venture capital in the system members of the Organized Private Sector (OPS) may even begin to see Nigeria’s infrastructure deficit as investment opportunities to begin to invest in railroads, road construction and rehabilitation, refineries, the power sector etc.

What is your take on interest rates?
We applauded the apex bank to have brought down the interest rate to 16 per cent from 22 per cent.  Nevertheless, any interest rate that is above ten percent is still high. Efforts by the government to grow the private sector without a good monetary system may only be a mirage.

Further, he described the continued depreciation of the naira, high inflation rates ranging above 10 percent and double-digit bank lending rates as killers of businesses and stunting economic growth . No sane industrialist or investor can source funds from the financial institutions at that rate.


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