Economist Urges Bailout Funds To Manufacturers

An Economist, Dr Mike
Onodje, has urged government to provide bailout funds to manufacturing companies during periods of major macro-economic instability to revitalise the sector.
The Director, Economic Management Centre for Management Development (CMD), Lagos, said this while delivering a lecture at the Nigerian Institute of Social and Economic Research (NISER), Ibadan, Tuesday.
Onodje spoke on the topic: “Capital Structure and Performance of the Nigerian Manufacturing Sector”.
He advised government through the Central Bank of Nigeria (CBN) to adopt credit control measures to ensure that manufacturing companies don’t carry excessive leverage ratios.
Onodje said the Financial Reporting Council should make it mandatory for financial statements of manufacturing firms to include a note on whether or not they consider leverage thresholds excessive in the year reported.
According to him, the effective capital structure policies should be put in place by manufacturing companies to guard against excessive leverage thresholds.
“Smaller and growing companies should restructure their capital through mergers and acquisitions to shore up their equity.
“Statistical analysis indicates that leverage ratios of Nigerian manufacturing companies are high by global standards; there is negative impact of falling manufacturing sector performance on the economy,” Onodje said.
The Chairman of the occasion, Prof. Rufus Akintoye, said no country could grow without strengthening the capital structure, adding that there will be stability of the economy if the capital structure was gotten right.
“Our policies will not make sense if we don’t get the fundamental rights; we need to put in place policies that will bring growth to the nation’s economy.
“If we don’t get the capital structure right, we can’t optimise the manufacturing sector,” he said.
The Acting Director-General of NISER, Prof. Frank Odumosu, said the topic was apt given the fact that the economy was in shambles.
According to him, Nigeria will not be better if the manufacturing sector does not perform well.
Odumosu said the monthly seminar which is part of the institute’s mandate, is the third edition in 2016.