Govt to reduce lending rates

Posted by From Bethrand Nwankwo (Abuja) and Erhumu Bayagbon (Lagos) on 2004/07/16 | Views: 410 |

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Govt to reduce lending rates


THE Federal Government is considering a reduction of lending rates by banks as a fresh path to economic growth.

THE Federal Government is considering a reduction of lending rates by banks as a fresh path to economic growth.

President Olusegun Obasanjo raised this hope yesterday at the opening of the Invest Nigeria International Fair 2004 in Abuja.

The President who was represented by his Political Adviser, Prof. Jerry Gana, said that the government would ensure that interest rates charged by commercial banks are reduced to the lowest minimum.

According to the President, government has also revitalised the Bank of Industry (BOI) to provide loans to producers, pointing out that the bank should reduce its rate to a simple digit of between eight and nine per cent.

The President also assured Nigerians that the government would boost power generation considerably by 2007.

Ironically, the occasion was nearly marred by an outage which lasted several hours and forced one of the dignitaries to address the audience without the public address system.

He admitted that there was unemployment in the country, noting: "Unemployment has become a serious problem in our society, especially among the youths."

He, therefore, declared that the focus of his administration "is to encourage small and medium scale enterprises" in order to reduce poverty in the land.

"Small and Medium Scale Enterprises (SMSEs) are the highest job creators in industrialised nations," he said, promising that government would give these industries all the necessary support to succeed.

Also, Mrs. Gloria Kunaiyi-John, the Executive Vice President of International Multi-sectoral Economic Development Organisation (IMEDO), the organisers of the event, said the fair was to empower the organised private sector, especially the SMSEs to search for new ways of playing a leading role in the economic and industrial growth of the nation.

In her own contribution, the Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mrs. Modupe Adelaja, promised her agency's co-operation in promoting a conducive environment for entrepreneurial development in all its ramifications.

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Adelaja noted that the success story of the Asian Tigers and the driving force of related economies like India, was characterised by the development of SMSEs. "Nigeria has the same, if not better potential and it behoves on all of us to support the agency to achieve its mandate," she said.

She added that the nationwide tour conducted by SMEDAN showed that Nigeria had much potential in the SMSEs sub-sector of the economy.

Meanwhile, the new capitalisation base of N25 billion for banks in Nigeria has been described by the governor of Kaduna State, Alhaji Ahmed Mohammed Makarfi, as an initiative that is capable of sanitising the banking industry.

Makarfi spoke yesterday at the commissioning of a Kaduna Community Business Centre, an event held at the Arewa House, Kaduna.

He said: "The initiative is good. I believe banks should put heads together; and no doubt, this would sanitise the industry a lot more. The issue of individuals owning banks is ridiculous. And a good development is that even the bankers are taking the new move of Charles Soludo, Governor, Central Bank (CBN) as a challenge. The truth is that if Nigerian banks consider merger, acquisition and other affiliations, over head cost will fall and they will stand to have other benefits."

The Kaduna Community Business Centre was sponsored by BATN Foundation, an independent, non-governmental charity organisation. The foundation is set up to operate throughout Nigeria on a series of local projects with focus on poverty reduction, agricultural development, environmental protection as well as health care and immunisation.

Also speaking at the event, the Chairman, BATN Foundation, Chief Olu Akinkugbe said the business centre was equipped with 25 computers that link users to the electronic super highway through the Internet.

The centre will be operated by 12 young members of the Kaduna community trained by the BATN Foundation.`

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