The Bankers’ Committee on Thursday revealed plans to stimulate growth in the economy.
Director of Banking Supervision of the Central Bank of Nigeria (CBN), Mr Ahmad Abdullahi, told the newsmen after a Bankers’ Committee meeting in Lagos that stability in the exchange rate have achieved hence the need to shift focus.
Abdullahi said that stability in the exchange rate had been sustained while Gross Domestic Product (GDP) growth was higher than 2017 record, adding that despite capital reversals in the nation’s capital market, the capital outflow in the economy was far less, compared to many emerging economies.
According to him, it is a sign that there is high confidence in the Nigerian economy.
“We are happy with the developments in the economy generally,” he said.
Also, the Managing Director of Guaranty Trust Bank, Mr Segun Agbaje, who could not agree less that the macroeconomic indicators were stable and positive insisted that the stability had created other opportunities but wondered how the economy could be more stimulated.
He said, “One of the things we always hear as bankers is that the macros are stable but how do we now stimulate the economy? He querried.
“I think the MPC meeting and the Bankers Committee is committed to this.”
Agbaje disclosed that commercial papers or bonds would be issued with its guidelines coming out very soon.
“The aim is in two folds: to stimulate certain sectors which would start with agriculture and manufacturing and allow people to do capital expenditure (CAPEX) which is more of a long term.
“It would give people single digit interest rate loans where bonds could go as far as 10 years,” he said.
He also maintained that companies involved in new capital expenditures and expansions of factories would be able to lend using some of the Cash Reserve Ratio (CRR) at nine per cent.
“These are not short term loans; they are long term loans of seven-year, two-year moratorium on principal.
“It would probably be the first time in the history of this country where manufacturers would be able to take fixed interest rate loans for seven years.
“This means they would be able to plan” he added.
According to him “the volatility that they fear for all kinds of risks would be taken out and I think these are very laudable steps in improving and growing the economy.”
Meanwhile, Executive Director, Finance, FCMB Mrs Yemisi Edun, had argued that the Cash Reserve Ratio (CRR) taken from banks would be positively deployed to grow the real sector as well as the agriculture sector in the economy.
Edun said this was positive for the economy and also positive for banks because they would be able to access those funds and earn on it, she also explained that it would be positive development for the economy because it would be coming at single digit rate.
Edun said, “For now, it would be channeled to agriculture sector and manufacturing but it is for growth, expansions and enhanced creation of jobs.
“The focus is to ensure the economy grows.
“Now that we have achieved stability, we need to now see a positive trend of growth and that is what we are committed to do at this time.”
She said the idea was to have job creating activities in the economy and also to bring interest rate down.