CBN governor, Sanusi Lamido Sanusi

Nigeria Needs More Banks – Ekpo

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With about 19 commercial banks and close to 900 microfinance banks, Nigeria still needs more banks to end an era of oligopolistic banking and drive down lending rates.
This is the opinion of the Director General of the West African Institute for Financial and Economic Management, Professor Akpan Ekpo.
According to him, lending rate in the country has risen to an extent that has left the engine of the economy, the real sector in  comatose.
He noted that at close to 24 per cent, lending rate in the country does not encourage a thriving industrial sector.
Ekpo explained that whilst the country has banks with good branch network, there was  need for more banks to come on board and increase the competition in the banking sector.
“Our banking sector is oligopolistic. What we have is good branch network amongst the banks and the microfinance banks can only give micro loans to micro businesses. They cannot serve the entire real sector,” he stressed.
He also urged that the monetary policy be relaxed, saying that further tightening of the monetary policy to curb inflation would  not help the economy. He noted that while inflation had continued to drop due to a tight monetary stance, it was not necessarily a good sign for the economy.
Professor Ekpo explained that the effect of the single digit inflation was yet to be seen by the economy, adding that the focus should be on other factors that make up the economy.
“A country can have high inflation rate and still grow its economy, what the government should focus on is the threshold.
“They should work on bringing down lending rates. In 2013, the real sector was in comatose and the country cannot do well with high lending rates. The manufacturing sector contributed five per cent to the GDP and that to me is unacceptable. We need the real sector to create jobs and bringing down lending rates is key to achieving this” he stated.
Ahead of 2014, he also urged that the mortgage sector  be among the focus point of the government, just as he expressed hope that the Mortgage Refinance Company would kick-off in the coming year.
He also stressed the need to start planning outside the oil sector and diversify the economy, adding that the quality of the leadership structure also needs to change in the new year.
While lauding the transformation agenda of the President Goodluck Jonathan-led government, he said “I know the president means well for the economy, but he needs to look at those helping him and know how committed they are to growing the economy.”

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