Akpan Ekpo, professor of Economics and Public Policy at the University of Uyo, Akwa Ibom State, has said that some deposit money banks have funds at seven to eight percent interest rates but small businesses can hardly access them.
Speaking at a February Breakfast Meeting organised by the Nigerian-American Chamber of Commerce (NACC), Akpan urged banks to ensure that the micro, small and medium enterprises (MSMEs) have access to cheap loans like well-known names in the country.
He stressed that this would create jobs and have multiplier effect on the economy in terms of job creation and GDP growth.
He said there was no bearing between the Monetary Policy Rate (MPR) and actual lending rate, as banks lent at 20 to 30 percent even when the MPR was 14 percent. MPR is the benchmark interest rate set by the central bank.
In his review of 2018 Nigerian economy and projection of 2019, he said economic performance of Africa’s largest economy would be determined by the outcome of its elections.
“Investors are watching,” he said.
“If everything goes fine, election takes place, and everybody accepts all the results, we may have an economy to forecast,” he said.
He said Kenya was yet to recover from the aftermath of its presidential election despite that the country was now calm.
He projected that the economy might grow at three percent, but said that it was not enough to haul the majority of the citizens out of poverty trap.
“We have to grow at 10 percent or more, sustain it for 15 years to reduce poverty,” he said.
He said most economic indices in the about country now were not good enough, pointing out that if the numbers did not change, the country might find itself in twin recession.
Twin recession or double-dip recession is used to describe a situation where the gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth.
“No economy survives from twin recession,” Akpan said, adding that it was only an economy earning foreign exchange outside of crude oil that would survive.
Nigeria is going into election on February 16 as the poverty capital of the world, with 87 million extremely poor people. According to the Brookings Institution, Nigeria is now the poverty capital of the world, with a record 87 million people living in extreme poverty and 8,000 people sliding into extreme poverty on a daily basis.
Akpan said the political environment must be secure for investors to come.
“The greatest problem with forecasts is the polity and governance,” he said.
On his part, Oluwatoyin Akomolafe, president of NACC, quoted the World Bank as saying that Nigeria GDP growth remained largely unimpressive and still exhibited the same pattern of the pre-crisis period of 2017.
“As at the third quarter of 2018, the combination of unemployment and underemployment rates reached an all-time high of 43.3 percent, with an estimated 49.1 percent of the country’s population living below the poverty line,” he said.
“Hence, staying well-informed and understanding the implications of the changes that had occurred, the measures to be employed and the prospect for the future is important to us all,” he added.