Business
CBN Lending Policy Will Normalise Credit Market, Economic Growth – LCCI
The Lagos Chamber of Commerce and Industry (LCCI) says the lending policy of the Central Bank of Nigeria (CBN) will normalise the credit markets, spur economic growth and broaden the interface between entrepreneurs and the banking industry.
Director-General of LCCI, Mr Muda Yusuf said this in an interview with The Tide source, yesterday in Lagos.
Yusuf said this while reacting to CBN’s letter dated July 3, to all Deposit Money Banks (DMB) mandating them to maintain a 60 per cent Loan to Deposit Ratio (LDR); in effect, the banks are required to give minimum of 60 per cent of their deposits as loans, with effect from September 30.
The CBN said the policy was to encourage SMEs, Retail, Mortgage and Consumer lending, adding that it would soon provide a detailed framework for classification of enterprises or businesses.
Yusuf said the new lending policy was a timely corrective measure to improve credits to the private sector, which had for years grappled with issues of credit access, cost of credit and tenure of funds.
“These challenges are more severe for Micro, Small and Medium Enterprises in the economy.
“The economy was characterised by profound crowding effect of the private sector in the financial markets owing to the diversion of credit to government through the instrumentalities of treasury bills and Federal Government bonds,” he said.
The LCCI boss expressed optimism that the new lending policy would impact the economy through quality financial intermediation while bridging the funding gaps in many sectors.
He said it would improve economic inclusion of more SMEs and promote economic diversification in line with the Economic Recovery and Growth Plan (ERGP).
Yusuf noted that the policy had the probability of reducing interest rate as supply of credit would increase and improve lending creativity and innovation by banks.
“This will result into a broader and more diversified sectoral coverage of lending,” he said.
The economist urged the CBN and the fiscal authorities to adopt measures toward addressing some possible risks in the lending policy.
He proposed the strengthening of the Collateral Registry to enhance the profiling of borrowers in the banking system, adding that the character of borrower had been identified as a major risk factor to lending in the economy.
Yusuf called for scaling up corporate governance practices in the banking system to prevent insider abuse and compromise of credit assessment processes.
He submitted that credit guarantee framework should be strengthened to give comfort to the banks and also promotion of the use of credit insurance.
Yusuf urged the fiscal authorities to effectively address enabling business environment issues, particularly infrastructure deficit and quality, in order to reduce credit risk.
The LCCI boss tasked the CBN to ensure alignment of the new policy with extant monetary policy actions, especially with regards to Cash Reserve Ratio and the Liquidity Ratio which are currently at 22.5 per cent and 30 per cent respectively.
Yusuf stressed that the detailed guidelines of the policy should take the recommendations into account while imploring the CBN to collaborate with stakeholders to ensure impactful outcomes of the policy on the economy.
Business
Food Vendors, Others Relocate To New Site At PH Airport
The raging controversy between the Port Harcourt International Airport Management and restaurants/canteen operators and theirallies over relocation has been brought under control, as the operators have commenced relocation to their structures at the new site.
Recall that there had been serious feud over a directive by the Manager of the airport, Mr. Michael Area, for food vendors and their allies to relocate to the new site.
They insisted that the new site was too distant and hence, would negatively affect patronage from customers, with possible loss.
They further also insisted that it wouldcost them much money to put up another structure, given the economic situation in the country, since the airport management did not build any structure for them, apart from providing the empty land they have to also pay for.
The situation had led to flexing of muscles, which made the Airport Manager to order for sealing of all shops, resulting in scarcity of food, as airport users could not find a place to eat, apart from the only Genesis fast food spot available.
As at last Friday, The Tide observed that most of the food vendors had transferred their structures to the new place, and had started doing business there already.
Meanwhile, customers have started settling down at the new location as they were seen patronising shops for foods and drinks, in spite of the distance.
Few of the remaining structures at the old site, The Tide further gathered, will also be removed as quickly as possible, and the owners are making efforts to get funds for the job to be done.
One of them, Mrs Aka Love explained that she was going to relocate to the new place before the end of March.
Currently, business activities at the old site have come to null, as the place which was usually a beehive of food, drinks and relaxation, has completely winded down.
By: Corlins Walter
Business
MOWCA Strengthens Maritime Crime Prevention
Secretary General of the Maritime Organisation of West and Central Africa (MOWCA), Dr. Paul Adalikwu, has stepped up interaction with the United States Government to lift restrictions placed on some member countries allegedly implicated in illicit shipping activities.
Adalikwu, who led a delegation from the MOWCA Secretariat to the US Embassy in Abidjan for a first leg of the strategic consultation aimed at promoting seamless participation of MOWCA countries in international trade within the global maritime space, reiterated the organisation’s commitment to the best ethical and lawful maritime practices.
Addressing the U.S Ambassador to Côte d’Ivoire, H.E Mrs Jessica Davis Ba, the MOWCA SG stated the organisation’s interest in promoting the International Ship and Port facility Security (ISPS) code which aims at enhancing security of vessels and their ports of call.
He expressed the commitment of MOWCA in promoting environmentally friendly, safe and cost effective shipping without any encumbrance that may limit the economic potential of member countries.
Dr Adalikwu recalled that at the instance of the U.S. Department of State invitation, MOWCA participated in the 2023 Registry Information Sharing Compact (RISC) Conference in Larnaca, Cyprus, on February 28–March 1, 2023, and a virtual meeting held on June 6 2023, with Mrs Jennifer Chalmers, Officer in change of Counterproliferation Initiative.
He recalled The U.S. DOS willingness to support MOWCA’s effort for preventive maritime security through the establishment of the Center for Information and Communication (CINFOCOM) with the aim to ensure a maritime situational awareness domain within MOWCA’s member states’ waters.
He added that MOWCA under his watch is committed to training and retraining of maritime practitioners and experts to enhance the human capital capabilities of member states.
The CINFOCOM will help prevent transnational crimes committed at sea like sanctions evasion by North Korea and other state actors, who exploit poor enforcement due diligence by ship open registries to circumvent United Nations and U.S. trade restrictions.
By: Nkpemenyie Mcdominic, Lagos
Business
Nigeria’s Public Debt Hits N97.3trn – DMO
The Debt Management Office (DMO) has hinted that Nigeria’s public debt increased by 10.7 per cent from N87.87 trillion in the third quarter of last year, to N97.34 trillion as at December 31, 2023.
DMO, in an update data released last Friday, said the increase in the debt stock was largely due to new domestic borrowing by the Federal Government to part finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.
The office noted that the N97.3 trillion public debt comprises of domestic debt of N59.12 trillion and external debt of N38.22 trillion. The sum of $3.5 billion was used to service external debt during the review period.
“Nigeria’s Public Debt Stock as at December 31, 2023 was N97.34trillion or $108.229 billion. This amount comprises the domestic and external debt stocks of the Federal Government of Nigeria (FGN), the 36 States Governments, and the Federal Capital Territory (FCT).
“There was an increase of N9.43 trillion over the comparative figure for September, 2023, which was largely due to new domestic borrowing by the FGN to part finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.
“At N59.12 trillion, total domestic debt accounted for 61 percent of the total public debt stock, while external debt at N38.22 trillion accounted for the balance of 39 percent.
“Consistent with the debt management strategy, Nigeria’s external debt stock was skewed in favour of loans from multilateral (49.77 percent) and bilateral lenders (14.02 percent) or total of 63.79 percent which are mostly concessional and semi-concessional.
“Whilst the DMO continues to employ best practice in public debt management, the recent and on-going efforts of the fiscal authorities to shore up revenue will support debt sustainability”, DMO stated.
By: Corlins Walter
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