President Goodluck Jonathan has said that once the restructuring of the Development Finance Institutions is concluded, the interest rates on loans will drop within the next 18 months, as access to finance will become easy and competitive.
Jonathan, who was represented by Dr. Ngozi Okonjo-Iweala, coordinating minister for the economy, on Thursday at Lagos Chamber of Commerce and Industry (LCCI) independence anniversary lecture said, “We have decided that the best way to go is to set up a development finance institution to wholesale money to commercial banks and specialised banks.
“We will create this institution in the next 18 months. The ADB is putting in another $400 million. We are trying to raise the money to do it long-term, 20-year money, 30 years, 10 years of grace and reasonable interest rate so that we can down the cost of borrowing.
“When we get this, it will drive down the cost of finance. We are not going to dictate to banks how much they charge; we will simply put up a system that will provide enough resources for long-term financing. A lot of multi-lateral institutions are supporting us and this thing is going to happen. So give us 18 months,” she added.
The minister also debunked claims that the economy was in a fragile state, stating that the nation was not shielded from global shock, but hds done a lot in terms of recovery.
She said “The economy is doing well. We may experience cash flow that is not frequent; that does not mean the country is not doing well. Nigeria is an asset-rich country and is strong. Anyone with contrary data should come forward with it. This has been checked with the macro-economic policies.
“The economic indicators are positive. We expended a lot of energy on the macro-economic framework in order to ensure that the nation is doing fine and this is obvious, going by the way the euro-bond was over-subscribed.”
Goodie Ibru, LCCI’s president emphasised the need for the country to diversify the economy, describing the state of the economy as “too dependent on the oil and gas sector; weak in domestic production and local value addition.”
According to him, as the country celebrates its centenary, the diversification of the economy has become imperative and compelling if the nation hopes to mitigate the risks of shocks and vulnerability.