• Thursday, May 30, 2024
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Bank directors challenge lenders on impact of dwindling oil price

Oil & Gas

Bank directors have challenged the deposit money banks to think outside the box and fund the identified sector or real economy as an antidote to the current crisis resulting from dwindling oil price.

Analysts in corroboration say banks can fund some sectors that have already been identified during the GDP rebasing including telecoms, entertainment and service, among others.

“The banks depend on taking money in and lending it out. So, anything that depresses income or taking money in is bound to affects the banks bottom-line. The banks have to think out of the box and look for ways of doing business properly and that is funding the real economy,” Sonny Kuku, president, Bank Directors Association of Nigeria (BDAN), said in an exclusive interview with BusinessDay at the association’s annual forum in Lagos.

He admitted that the oil price saga was expected and predictable but was concerned that government did not take it into consideration before fixing the price for the budget.

“We should reduce the cost of governance, reduce unnecessary cost of importation, things that we do not need. We should look inward like the India, China did. It means there will be no luxury goods or it will be reduced only for those who can afford it so that we can conserve that foreign exchange and use it to develop,” he said.

According to him, the real economy should be developed by focusing on small and medium enterprises and investing in infrastructure.

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“And government should take their hands off these businesses and do regulation. They should do regulation, security, infrastructure and social development; every other thing should be left for the private sector to do,” he said further.

Presenting a paper on ‘Competing Globally From The Boardroom: Reviewing Benchmarks For Nigeria Bank Directors’ at 2014 BDAN forum in Lagos, Ayodele Othihiwa, partner, KPMG Professional Services, said to compete globally from the boardroom, an organisation must put its ‘governance house’ in order.

“With effective, sound and well respected board, lenders both local and offshore will recognise the competitive advantage that this creates for the institution particularly with respect to access to capital,” he said.

According to him, local and foreign investors will respond positively to evidence of an effective management of the institution and this would support the institution’s ability to compete and excel in the global market space.

HOPE MOSES-ASHIKE