The reason why upon the rising oil price and associated foreign reserves jump which now stands at N47bn are not felt by the economy cannot be unconnected with the federal government’s unexplainable stance to hold on to about N2.7tn owed contractors since the beginning of this administration.
This is as the Central Bank of Nigeria (CBN) and the Deposit Money Banks (DMBs) are working towards the disbursement of N60 billion, which is five per cent of their profit to buoy various developmental initiatives of the Federal Government.
Already, analysts say the huge debt is also impacting negatively on the capacities of Deposit Money Banks (DMBs) to do business of lending which will further drive up real sector activities and jobs creation.
Business Hilights recalls that the Central Bank of Nigeria (CBN) Governor, Dr. Godwin Emefiele, had at the end of the Monetary Policy Committee (MPC) meeting on Monday last week revealed that the N2.7tn debt remains a key factor in frustrating the strength of commercial banks in lending to the real sector to spur activities in the economy. The CBN boss used the occasion to advice the federal government to work towards immediate payment of the debts to spike the sleeping economy.
In his presentation at an award ceremony in Lagos weekend, Emefiele said the DMB’s 6 per cent contribution will soon hit the N60 billion mark, noting that the money will help address the plight of the vulnerable sectors in Nigeria that are in dire need of credit facilities.
He added that the exposure of the Nigerian economy to global shocks was a clear reflection that Nigeria cannot sufficiently produce what its people consumes, hence, the huge dependence on foreign goods.
Emefiele averred that the shocks further attributed the inability of the country to produce what it consumes to heavy dependence on oil sector to provide the foreign exchange needed to finance the country’s imports and the poor diversification of the economy as well as low productivity in key non-oil sector.