Babalola Rolls Out Strategies For Economic Recovery

PHOTO: MINISTER OF STATE FOR FINANCE, MR. REMI BABALOLA.

UYO, AKWA IBOM April 15, (THEWILL) - For Nigeria to be on the path of economic recovery, commercial banks in the country must resume lending apart from measures adopted by the Central Bank of Nigeria and the Federal Government to help stabilize the system, Minister of State for Finance, Remi Babalola has said.

Banks in the country are yet to take steps to increase lending according to Mr. Babalola who spoke Thursday at the commencement of the National Council of Finance and Economic Development conference (NACOFED) holding in Uyo, the Akwa Ibom State capital.

"With bad loans running onto several billions of naira still in their books, many banks continue to hoard cash and turn down loan applications and this squeezes both small and large businesses which often rely on credit to meet payroll, order supplies, invest and grow," he said.

Babalola noted that there was need to re-awaken confidence in the financial system, stating that Nigerians remain gloomy, with most consumer-confidence surveys showing only modest raise from low points hit during the downturn.

"Confidence is a perplexing psychological phenomenon and economists aren’t sure what it will take to make consumers upbeat enough to propel a robust recovery," he added.

He regretted that an improvement in the unemployment situation has been “Painfully slow largely due to the poor state of our infrastructure in the country, but expressed confidence that corporate profits are strong owing to the aggressive cost-cutting over these past years of economic downturn.

He said however that the downturn exposed serious cracks in Nigeria’s money and capital market, affirming that inflation is slowing, driven by lower food costs and helped by low risk from price pressures in advanced economies.

He projected that the overall GDP growth for 2010 is projected at 7.53 percent, higher than the 6.9 percent recorded in 2009.

Acting President Goodluck Jonathan who was represented by Abia State Governor, Theodore Orji said, "A key component of the government’s strategy is to attract private sector funding and experts as Government is taking far reaching economic reforms that are anchored on the 7-point agenda and the vision 20:2020 strategic development initiative."