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Nigeria’s economic survival rests on BoI, BoA, experts say

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Nigeria’s economic survival rests on BoI, BoA, experts say

The only means of early revival of the present economic crisis is for Nigeria to deliberately devote the two special banks: Bank of Industry, (BoI) and Bank of Agriculture (BoA) to increase percentage of their loans to new investors in the related fields.

There is no defined portion of the banks’ loans designed for upstarts in Nigeria, unlike in other developing countries that had once suffered similar economic meltdown.

This was a position taken by experts in Abuja on Wednesday, at the International Mining Investment Conference.

They said the economic recession provides Nigeria the opportunity to find lasting solution to the oil-sector-dominated economy, which will be by promoting policies capable of increasing the volume of foreign direct investment (FDI), said to be $3, 0804.90 billion in 2012 and now $887.62 million.

But bankers said the prevailing interest rate in commercial banks, which stands at 14.2 per cent works against the Small and Medium Scale Enterprises(SMSEs), adding that for the programme to work, a seed fund should be domiciled with the banks.

Read also: Economy: The times are confusing, but we’re focused, Adesoun declares

However, in the policy makers’ circle, there is said to be a new scheme in the works that will have young school leavers and those venturing into agriculture and solid minerals benefitting from the banks, said an official of Ministry of Mines and Solid Minerals.

But economists express fear that the rising percentage of nonperforming loans in the conventional banking system may not allow the new scheme to see the light of the day.

They cited the recent statement by CBN Governor, Godwin Emefiele that at last May, non-performing loans (NPLs) in Nigeria had risen from 68 per cent in 2015 to 78 per cent with N649.63 billion with the Assets Management Company of Nigeria (AMCON) as a factor that may be running against such policy.

Managing Director, BOI, Mr. Washed Olagunju (CBN), speaking on the issue in Abuja said the CBN had given his bank clean bill of health to support the solid mineral sector.

“Our non performing loan ratio is 3.87 per cent, which is below the CBN ration of 5 per cent.

Also, as at June this year, the collection from MSMEs was N2.97 billion as against N2.19bn for last year. This shows that on a sustainable basis, our promoters are paying back,”he said

By Emma Eke…

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