Prof. Christopher Onalo is the Registrar/Chief Executive Officer, Institute of Credit Administration. In this interview with JOSEPH UMUNNA, he says the Federal Government must relax stringent conditions to enable investors and entrepreneurs easily access credit facilities, for investment opportunities in the country. Excerpts:
What is your advice to the government on economic management strategy for the masses?
When we talk about economic strategy, we are talking of the enabling environment for the masses to raise their shoulder high. With the maximum economic comfort, government should be responsible to their function by creating jobs for the citizenry, providing infrastructure like roads, electricity, affordable housing scheme and good educational system. Government should completely reduce inflation through the prices of goods and services.
The Federal Government has just passed the 2018 budget; what is your view on the credit culture of the economy?
The budget is the parameter for measuring economic performance of the Federal Government; it is also the instrument that connects the people and their leaders. In relation to the credit culture of the economy, the government should be able to provide enabling credit policies that can stimulate and encourage investment culture which could boost production, develop infrastructure and job creation. This can only be achieved if access to funds is made easier through favourable, lower interest rate. It will then enhance the citizenry’s borrowing culture, which will increase the output of industries.
We also note that other government institutions like the Bank of Industry, micro-finance banks, commercial and merchant banks should relax stringent conditions to encourage entrepreneurs to easily access funds for investment opportunities in the economy. This can be made easier if the Federal Government, through the instrument of the budget, canvasses favourable monetary and fiscal policies to financial institutions operating in the economy.
We must not forget to add that if the credit culture is boosted through the operational apparatus of the budget, the Federal Government’s revenue will generally rise in the system, because our people have been empowered significantly.
Without the availability of credit, it would be difficult, if not impossible, to purchase homes, automobile, furniture, major appliances and other modern accessories. Without credit facilities, the financial institutions will cease to exist
In what ways has your institute’s output, policies and dialogue efforts contributed to the advancement of the economy?
As the registrar and chief executive officer of the institute, my voice is already the view of the association. In the economy, we can only sit and proffer remedy to various issues that bother on economic stability of the nation. We can advise but note that it may or may not be adopted by the sitting administration.
We send our proposals and advice to the required quarters of the government for adoption. It must be noted that we are regularly doing this and do not wait before proffering solutions in the development of the economy. That is the very best we can do in the area of our output, policies and dialogue efforts to the advancement of the economy.
Moreover, it is critical and important to note that the institute I represent, develop good credit ethics in the economy of Nigeria. This will help build asset, enhance entrepreneurship development and reduce bad debts.
The importance of credit on the economy as stated by Daniel Webster is that, credit has done more to enrich mankind than all the gold mines in the world. Credit is the lubricant that enables the wheel of commerce to turn.
Without the availability of credit, it would be difficult, if not impossible, to purchase homes, automobile, furniture, major appliances and other modern accessories. Without credit facilities, the financial institutions will cease to exist.
Have you considered the trust aspect before giving out credit?
The provision of credit facility implies trust on the part of the person providing the credit and the responsibility of the provider or borrower who promises to abide by the terms under which the credit was obtained. Before giving out credit, it must be documented, following laid down procedures.
How would you rate the Federal Government? Have they really done enough in the area of credit issuance, in the economy?
We appreciate the effort of the government in expanding the credit institutions in the economy with various establishments of financial institutions, such as development banks, and others that exist in the system. We also appreciate the fund inflows from the government, strictly to encourage the development of small, medium and large-scale companies in this regard. The idea is boosting their capacity to lend, in order to create employment, increase output and boost the Gross Domestic Product. While the effort of government is noted, we ask for favourable accessing climate to this credit for the firms, individuals and the corporate entity at large.
We want the people to be able to effectively to compete at the local and international level in the area of goods and services. This is only possible where small and medium-scale enterprises are fully developed. We add here that an economy without small and medium enterprise development is dead. So, we advise the government to involve various stakeholders, such as the Ministries of Finance, Industries, and Labour and Productivity respectively, to evolve policies to the government that can help to enhance favourable monetary and fiscal policies for the purpose of expanding the credit windows in the economy.
What is your view on the organised private sector?
The organised private sector needs to be proactive and profit-driven. What we have seen or what is operating in the system is that all are operating within their respective domains.
The organised private sectors are all pursuing different agenda. They need to really become a policy think-tank for the economy and stop the habit of playing politics by belonging to camps on who becomes President or Governor. We cannot continue to work this way. Please note that not everyone must be a President or Governors in a country. They must act according to their mandate and objectives of their respective bodies. The organised private sector needs to be contented; they should be committed to the objectives of the private sector.
They must assist the government to enhance the micro and macro-economic indices of economic, growth which helps in boosting the gross domestic output of the economy. The country has just exited from recession, and they must act fast so it doesn’t go back. They must help to rebuild the economy with productive efforts and this can only be achieved if we are not distracted but focused.
