The leadership of the Equipment Leasing Association of Nigeria (ELAN) has identified five key areas where the federal government must work very fast to boost the morale of both local and foreign investors in the 2018 business year.
In an interview with the Secretary of the body, Mr. Andrew Efurhievwe made it clear that government must give urgent attention to issues surrounding the stability of the Naira, interest, inflation and unemployment rates.
Other areas of need include boosting ease of doing business so as to raise traction of foreign direct investments and the timely passage and implementation of the 2018 Budget.
He said though the booming status of foreign reserves currently has the capacity to respond to any shock in the economy, there is need for caution so that the gains so far made from the Federal Government’s 2017 – 2020 Economic Recovery and Growth Plan (ERGP) will not be shattered.
Efurhievwe observed that “Although the economy is still fragile, there are encouraging signs emerging. The World Bank has recently projected global economy growth of 3.1% with advanced economies at 2.2%, while developing economies at 4.5% and Nigeria to grow at 2.5%, though the International Monetary Fund (IMF) projected Nigeria’s growth at 1.9%”.
“Other macroeconomic fundamentals include receding inflation rate in last few months currently at 15%, increasing foreign exchange reserves at over $40 billion presently, far-reaching reforms to the foreign exchange market, putting the official exchange rate at N305/$ while the parallel market is N365/$.
Giving insights on the growing trend of the leasing industry, he ELAN scribe noted that “The impact visibility of leasing is increasing, contributing to capital formation in the economy and creating wealth,” saying “In 2016, outstanding lease volumes was estimated at N1.26trillion, up from N1.1trillion in 2015, representing a growth rate of 14 percent. A better performance is expected in 2017 .given the relatively stability in the economy compared to 2016”.
According to him, “The saying that leasing thrives during seasons of economic boom and recession, has been demonstrated over the years, as the industry remained resilient in challenging times, and growing financing assets worth over N6.89trillion in the past ten years.’’
He said “The availability of cheap long term funding will no doubt enhance the capacity of lessors to deepen leasing penetration in the market. A major way to broaden the funding sources is to allow leasing companies to access pension, sovereign wealth fund and the various intervention funds for development in specific sectors of the economy. Insurance funds and the development of specialised financial instruments can equally be important funding sources for leasing”.
Efurhievwe added that “government should continue to strengthen the capacity of the leasing industry and make it more responsive to its developmental role in the Nigerian economy. A major support Initiative was the enactment of the Equipment Leasing Act 2015”.