For the umpteenth time, financial experts have called for policy harmonisation between the two sides of the country’s decision makers, in order to reach a sustainable point and avert looming financial crisis.
A former Deputy Governor of the Central Bank of Nigeria (CBN), Obadiah Mailafia, who led the renewed call for proper monetary and fiscal policies’ coordination, said it had become exigent.
Mailafia, in his paper titled: “Economic and Financial Instability’’, presented at the 23rd yearly conference of Certified National Accountants organised by the Association of National Accountants of Nigeria (ANAN), noted that structural reforms are vital as well as strong ethical codes, to avert the imminent crisis.
He suggested that international cooperation should be actively pursued and noted that “prevention is better than cure. As a lesson for Nigeria, financial crisis derive from various complex sources and uncertainty is a real challenge.
“Financial crisis can lead, not only to economic collapse, but also political upheaval. All nations are vulnerable. There is need to strengthen micro and macro prudential regulations.”
Mailafia listed currency crisis, sudden stops, foreign and domestic debts crisis and banking crisis among the current looming challenges.
He noted that elements of financial crisis comprised money demand outstripping supply; when banks ceased to advance credits; demand for early loan repayment; liquidation of financial assets and increase in collateral requirements and frozen financial markets as elements of financial crisis.
However, from the regulators to industrialists in the manufacturing sector, came the calls for more financial support and a conducive operational environment for Micro, Small and Medium Enterprises (MSMEs).
While calling for a review of SMEDAN Act 2003, with respect to how MSMEs should be funded, the Director-General of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Dr. Dikko Radda said that the MSMEs were being encouraged to play the role of interventionists in order to shore up the economy.
He lamented that 37 million micro enterprises face major predicaments, as lack of access to funds to produce quality products for global competition still remain unsolved.
But in a move to absolve the Federal Government from blame, he said a lot of work and encouragement had been given to MSMEs by reducing their costs of registration from N10,000 to N5,000, as well as the establishment of the National Council on MSMEs.
A discussant and Director-General of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadiri, said that there is need to diversify the nation’s economy, build the sources of income and foreign exchange.
“MSMEs are regarded as the engine and supporter of the manufacturing sector. The sector represents about 90 per cent of the manufacturing and industrial sector and employ almost 70 million workers,” but added that the Federal Government has a lot to do to enhance the relevance of the sector in the nation’s economy.
The National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Iyalode Alaba Lawson, said that MSMEs are the energies of every economy all over the world, reiterating that MSMEs engaged about 84 per cent of the total workforce of the nation.
“MSMEs must be given adequate attention to help the economy to grow. MSMEs contributed about 48.47 per cent to the GDP but only 7.27 per cent go for exports,” she added.
The Executive Secretary, Association of Small and Medium Enterprises (NASME), Eke Ubiji, said that the issue of quality products was key in producing goods that are of international standards, so that Nigerian products will not be rejected outside, adding that MSMEs still stand the chance of creating more employment for Nigerians.