Banks, Insurance Sectors’ Consolidation To Spur Growth, Says Omojola
National Coordinator of Independent Shareholders Association of Nigeria (ISAN), Reverend Anthony Omojola has called on the government to streamline policies that will drive more participation of Nigerians in the capital market, to further engender robust economy.
He disclosed that the expected banking sector consolidation and the ongoing insurance sector capital raising will help to shore up the economy.
Speaking in an interview, Omojola expressed confidence that with sound political will, the Nigerian capital market will effectively be positioned to make greater contribution to the development of the nation’s economy, serving as an instrument to raise the much-needed funds for infrastructural development.
“On planned bank recapitalisation, an expanding economy require more finances hence the banks should brace up for more Capital and be able to support the economy. Our budgets are getting bigger, ditto our GDP. To finance projects l in the Oil, Rail, Air transport and Marine sectors, banks have unique roles to play hence the need to beef up their Capital. I see the different categories of banks being called upon to double their Capitals in the short to medium term. The Insurance sector should also be very supportive. With the extended re-capitalisation period, few insurance companies will emerge as a result of mergers and acquisitions” Omojola said.
The ISAN National Coordinator was also optimistic on the economic future of the country irrespective of teething challenges, such as expected weak demand of oil by 2025, when the E.U countries are expected to phase out use of petrol, Nigeria’s major foreign exchange income earner, “Let the advanced countries continue their race whilst we take our time to emerge and develop. With more agricultural advancements, we should be able to feed ourselves and then later adopt some positive measures from these countries. If we produce lesser oil, we would need more Gas for development. These should be our first priorities. But it is obvious that Nigeria needs to think ahead about its future. We should grow our non- oil exports so that our (Naira) exchange rate will improve and we can have a stable currency”.
He however emphasised on the country’s rising debt profile and the dangers of bloated debt, challenging lesser GDP or declining revenue, a trend he said, tend to give credence to the World Bank’s earlier stand that the country is living on borrowed funds. “Yes, the World Bank have spoken. We need to watch our debt levels or else we run the risk of not being able to service them. Loans should only be taken for projects that will enhance further developments and improve our infrastructure position.
Omojola expressed confidence on the government of Buhari as likely to take the country out of the prevailing economic depression, but, only if the government takes the right measures. “If he takes advice. If the security situation improves, if the business environment is more conducive” adding that further improvement in infrastructures such as power, roads, health and others will further speedy economic development. “Our Energy generation has increased but distribution is hampered because of poor infrastructures. Further improvement in the infrastructures will aid better distribution of electricity. Discos should not be sacked but there should be more compliance with rules guiding their operations”.
The ISAN boss expressed concern on the impact of border closure on SMEs and other businesses in the country, adding that the stand of the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI), portrays the hardship the border closure has foisted on businesses. “’ The concerns of the various organs of companies and employers are real, however, we equally support the Federal Government for closing the border for regulatory compliance. Issues at stake should be discussed and fresh agreements put in place. There shouldn’t be permanent border closure. Steps should be taken to open it for commerce to thrive”
Comments are closed.