• Friday, March 29, 2024
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Banks to commit part of their balance sheet to fund Creative, IT, power sectors

Hebert Wigwe

Nigeria’s Commercial lenders on Thursday announced their decision to commit part of their profit – up to 5 percent- to support four critical sectors of the economy, including the movie, music, fashion, Information Technology as well as the power sectors.

The lenders announced the decision arising from the 342nd meeting of the Bankers Committee in Abuja.

Chief Executive Officer of Access Bank, Hebert Wigwe who spoke at a media briefing said the nature of the funding would be long term debt at reasonable interest rates and could be as cheap as 5 percent which is quasi equity and enough to support them.

He said whether industry participants would bring in some equity would be looked at on a case by case basis, and may not be significant.

“There are four significant sectors that would be supported with a lot of resources, the music, movie, fashion and IT industries.

“In  terms of the total funding required, the specific amount has not been determined, but the final details would be determined and agreed this coming week, eventhoiugh though there are rough estimates,” Wigwe explained.

“But I am sure the funding would be just enough to create the quantum leap required in the market place”, he stated, assuring that the infrastructure that would be built would be of world class standard.

“We basically found out that that sector will generate significant amount of employment and GDP given how Nigerian creative sector has done well, it can help the country become the heart of tourism if that sector is handled properly.”

“It could also be a major source foreign earnings if we invest significantly in those sectors.”

He specifically said that what the bankers committee wants to do is to help provide relevant infrastructure or rather funding that industry participants would use to create relevant infrastructure and shared facilities for each of these sectors.

He said in the music sector, there could be creation of a music academy, in the IT, we could see several tech hubs being created and ofcourse funding for people, creation of a world class shared facility do that people in that sector can have access to a facility that can enable them produce at world class standards.

“All of these would happen before the beginning of the next quarter and the different participants are working with international institutions can standard building people in that sectors can begin to infrastructure to support the different things that they do. Buttressing Wigwes’ statement, CBN Director of Development Finance, Mudashiru Olaitan said the most critical challenge that the Nigerian SDMEs face today is power apart from access to funding.

He said the bankers committee “is now looking at the rural electrification authority, the CBN to see how finance can be deployed to those we call power service providers that want to provide services and upgrade power to the SMEs.

He said already, the process has started and that there have been pilot projects in Ariaria market, Sabongari, Sura and Iponri in Lagos.

“What we are looking at is how we can deploy about 10,000 mini up-grids to the SMEs and it is going to boost our fashion, the creative industries’ with the hope of a huge impact on job creation.

Director, Banking Supervision, Central Bank of Nigeria (CBN), Ahmad Abdullahi, speaking on the economy, although the IMF has already reviewed downwards the growth forecast for 2019 Nigeria’s outlook remains strong with recent growth figure of 2.38 percent.

“There is stability in the forex market, reserves are over $40 billion as we speak. For us, the focus for 2019 may look good. The US fed is likely not going to hike rates and that is good news for emerging economies because it means that the dollar is not going to strengthen any further.”

Tomi Somefun as Unity Bank MD/CEO, shared the bankers’ belief that the initiative is also about youth empowerment, looking at the demographics which show that a lot of players in these sectors are youths.

She said they are also of the view that the initiative would provide kno0wledge sharing among these groups.

“We are passionate about this as bankers’ committee and we hope to do this very fast to have a lot of impact on the economy.

CBN Director of Corporate Communication, raised confidence that the initiative would help boost export, conserve foreign exchange earnings and reduce pressure on the naira.

 

Onyinye Nwachukwu, Abuja