Experts Advocate Policies To Restructure Existing Debt, Repayment Period

To bail out the nation’s economy from financial distress,  experts have stressed the need for government  to urgently embark on policy measures that would restructure existing debt and extend the repayment period of its credit obligations with the rising debt-service burden.

This was stated at the Financial Derivatives Company (FDC) forum on the theme, ‘Corporate Resilience: Economic Recovery Against Unforeseen Pandemics’ held in Lagos.

The managing director/chief executive officer of Financial Derivatives Company, Bismarck Rewane,  said , government needs to lessen its debt burden through  restructuring  and  seeking other better options to enable flexibility on payment.

Rewane said, another factor that would sustain nation’s economic growth is to ensure that government  deploys  funds approved  for developmental projects  for the purpose intended.

According to him, government must restructure the debt, reschedule it and seek what better terms for repayment.

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To him, “the trust deficit is there, it is cumulative pattern of bad behaviour which has left us where we are in the last  60-70 years, it has become a pervasive nature of our leadership and followership, they have come to accept falsehood as part of DNA of Nigeria, we must change that and it has to start with some drastic steps.”

Rewane disclosed that economic growth is expected to  remain low throughout year 2023 to 2027 forecast period owing to  limited fiscal space, high infrastructure deficit and monetary tightening.

He stressed the need for government to rev up  investment in telecommunication services, infrastructure and  financial technology to drive up the economy into a perfect market.

Rewane described corporate resilience as an integral part of strategic building, noting that  most African countries, especially Nigeria had structural problems which were exacerbated by covid19-induced shocks.

With global shocks becoming imminent and inevitable, he urged corporates to build contingent capital and embark on revenue diversification as buffers for unforeseen pandemics and shocks.

He also listed increased investment in work from home facilities, technology and information infrastructure, timely update on business plan and strategies to reflect economic realities, enhance supply chain network through increased digitisation and investment in backward integration to protect businesses from exogenous shocks as growth induced factors for corporate organisation.

Furthermore, he underscored the need for institutions to prioritise Environmental, Social and Governance  (ESG) goals in order to attract investment and drive equitable growth in the long run.

According to him, Small and medium enterprises (SMEs) with a strong ESG focus will be in a better position to attract interest, drive sustainable growth and garner supports effective regulatory compliance.

On multiple taxation, Rewane said: “we must be more efficient in the collection of taxes but also reduce the number of taxes. The burden of tax is a problem, the lower the tax rate, the more complaint people are going to be.”