Business
Recession: Don Tasks FG On Quality Growth
A financial expert, Uche Uwaleke has called on the Federal Government to focus on quality growth that is inclusive for the economy to be completely out of recession.
Uwaleke, an Associate Professor and Head of Banking and Finance Department, Nasarawa State University, Keffi made the call in an interview with newsmen last Thursday in Abuja.
He said that government could achieve quality growth by emphasising more on the agricultural sector.
He said that emphasis should also be laid on other critical sectors of the economy that would promote economic diversification.
“The good news, however, is that the roadmap is already available.
“Effective implementation of the Economic Recovery and Growth Plan beginning with the 2017 Budget holds the key,” he said.
Uwaleke commended the government efforts of getting the country out of recession, describing the news as cheering, which showed progress in the economy.
“It corroborates the positive developments in the economy namely the relative stability in exchange rate, increased level of capital importation, enhanced Manufacturing Purchasing Managers index, retreating headline inflation and rebound in the stock market,” he said.
The don however noted that the journey was still far and more work still needed to be done in the economy.
He said that a GDP growth rate of 0.55 per cent would not make much impact given a population growth rate of about three per cent per annum.
“Besides, the major driver of the growth which is the oil sector is indicative of the country’s increasing vulnerability to external shocks.
“Another cause of worry is that although the agriculture sector grew 3.01 per cent year-on-year, it actually declined when compared with the first quarter of 2017 (3.39 per cent) and the last quarter of 2016 (4.03 per cent).
“Little wonder, the cost of food items have been on the rise in spite of the gradual drop in inflation rate.
“Therefore, the challenge now is to focus on the quality of growth and ensure that it is inclusive,” he said.
The National Bureau of Statistics (NBS) on September 5 reported that the country has officially exited recession.
The data showed that the country’s GDP grew by 0.55 per cent year-on-year in real terms in the second quarter of 2017.
The report said that the recovery was driven principally by the performance of oil, agriculture, manufacturing and trade sectors.
The bureau said that the figure indicated the economy was out of recession after five consecutive quarters of contraction since first quarter of 2016.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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