BY MICHAEL EBOH

…Says firms losing 30% sales revenue to insecurity
Industrialists and members of the organized private sector have called on the federal government to tighten its control over the Central Bank of Nigeria, CBN, and the Governor of the apex bank, by increasing the number of independent director on the Board of the bank.

Speaking at its second quarter press conference on the economy, President of the Lagos Chamber of Commerce and Industry, LCCI, Mr. Goodie Ibru, however, warned against the removal of the autonomy of the CBN, saying it would hinder it from effectively and promptly discharging its functions.

He said, “However, we concede that the autonomy cannot be absolute. In any events, no institution should have absolute powers. Therefore, what is necessary is to strengthen the existing structures of controls within the framework of the CBN Act 2007.

“We know for instance that the CBN Governor is an appointee of the President; therefore the President has some oversight responsibilities over the CBN Governor. The Board of directors also has powers of checks and balances even though the governor is the chairman of the Board.

“To make the Board play this role effectively, the number of independent directors, (who are also appointees of the president) could be increased. And they should be men and women of high intellectual and moral standing and truly independent. We are of the view that the Deputy Governors of the CBN should remain on the board in order to provide the desired technical input into the board’s deliberations.”

Ibru further lamented the spate of insecurity in some parts of the country, saying it is negatively affecting companies, especially in the area of sales, raw materials sourcing and funding, among others.

According to him, many firms have lost up to 30 per cent of their sales as they can no longer access most part of the northern market while manufacturing firms sourcing raw materials from the north are now facing serious challenges.

He further stated that projects funded by banks in the affected states are now at risk; while inventory and stocks of many companies have been trapped in some locations in the affected states.

“Serious perception problem has been created for the country; many bank branches have been closed, while the working hours for others have been drastically reduced; sales representatives of many companies have fled the affected states; many projects under construction in the north have been abandoned; while security budgets have been scaled up by many firms,” he maintained.

Continuing, Ibru declared that the current dearth of credit facilities for investors is putting the economy of the country in jeopardy, saying that the situation will worsen the country’s unemployment condition.

According to him, the situation has been further compounded by the fact that government treasury bills and bonds have returns of between 13-17 per cent, declaring that the consequence is that available funds have been mopped up by government.

He said, “It is clearly more attractive now to invest in government securities than invest in ventures that would create jobs.

“Even banks now would rather buy treasury bills and government bonds than give loans to investors. This credit and interest rate structure would continue to create distortions in the economy, which will only perpetuate the phenomenon of jobless growth and further depress the stock market.”