Stakeholders Echo Concerns For Private Sector Financing, Blame CBN
Stakeholders within the Organised Private Sector (OPS) have accused the Central Bank of Nigeria for not being transparent in many of its intervention funds to the real sector of the economy.
According to them, the volume of billions of naira the CBN claimed is disbursing by way of interventions to the private sector are not getting to their members, as those money are being hijacked by faces not of the OPS members.
The stakeholders also expressed worries that access to bank’s loans remain a hard nut to crack for many businesses operating in the private sector.
Coming under an umbrella organisation of business interest, the OPS which comprising the Manufacturers Association of Nigeria (MAN), Nigeria Employers Consultative Association (NECA), Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Association of Small Scale Industries (NASSI) and Nigeria Association of Small and Medium Enterprises (NASME), made the submission at the 1st National Stakeholders Conference organised by the Association of Corporate Affairs Managers of Banks (ACAMB), held on Wednesday.
The event, themed ‘Promoting Synergy between the Banking Industry and the Organised Private Sector’, was used to lay emphasis on how both sectors could cement a mutual understanding and fruitful relationship for the overall benefit of the Nigerian economy.
Speaking, the National President of NACCIMA, Ide Udeagbala, lamented that the banking sector has not been living up to channelling funds for productive investment to promote economic growth, stressing that if the critical issues of policy formation and access to finance are resolved, it would cascade into areas that would promote private sector productivity and growth.
Concerned over the bureaucratic bottlenecks in accessing funds, he said, “There is a need for the banking sector to further enhance investment by identifying and funding good business opportunities and facilitating exchange of goods and services as a means of contributing to the growth of the private sector.”
On his part, the President MAN, Mansur Ahmed, lamented the decline in the volume of loans to the manufacturing sector over the years, noting a report from the CBN shows the shares of commercial loans to the manufacturing sector grew by 0.1 per cent between 2017 and 2021.
“This no doubt limit the performance of the manufacturing activities in the country terms of investment and production,” Ahmed said, noting also that the total sum of commercial bank loans to the economy from 2017 to 2021 N92.81 trillion but that loans to the manufacturing sector was N93.21 billion for the same period.
“This accounted for 0.1 per cent of the total loan to the economy. Prime Lending Rates averaged 15.3 per cent and Maximum Lending, 29.2 per cent from 2017 to 2021,” stressing that most manufacturers borrowed in between prime and maximum lending which averaged 21.7 per cent from 2017 to 2021.
“There is no doubt that the current performance of the industrial sector, particularly manufacturing, is due to the limited funds available which does not allow for significant investment and expansion in productive activities. For instance, the growth of the sector averaged 0.25 per cent 2020 to 2021 with an average capacity to real Gross Domestic Product of 9.0 per cent just as manufacturing capacity averaged 52.7 per cent for the same period. The trend no doubt shows that the sector is facing doubting challenges including high cost and limited funds,” Ahmed added.
The Deputy Director, Banking Services at CBN, Egboagwu Ezulu, hinted the CBN has available trillion of naira on its table for the real sector but that the banks were supposed to approach the CBN on behalf of the customers (OPS) for funds.
According to him, CBN has had the issues of people borrowing not to pay back. “If we borrow to pay back we will not be having the issue we are facing now.”
Ezulu, however, urged the OPS to put pressure on the Bank of Industry (BOI) and the Development Bank of Nigeria (DBN) to source more funds.
He said, “When we see a lot more pressure from those two entities the CBN will provide the intervention funds through the commercial banks. Rather than go to the commercial bank that will give you an interest rate of 18 per cent or 19 per cent, approach those two entities to get funding.”
Earlier, ACAMB President, Rasheed Bolarinwa, said, “The conference offers a unique platform for the private sector players and the banking community to share perspectives on how the synergy, communication cooperation and mutual understanding between these critical segments of the Nigerian economy can improve.”
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