If the consensus reached at the Bankers’ Committee interaction held at Southern Sun Hotel, Ikoyi, Lagos with the state government recently is anything to go by, then the hope of revamping the ailing manufacturing sector might not have been lost. Concerned with the continued effect of the global economic meltdown and the biting effect of the recession which has adversely affected the manufacturing sector, especially in Lagos, being the commercial nerve centre of the nation, Babatunde Fashola, governor of Lagos State, at a parley with Lamido Sanusi, governor, Central Bank of Nigeria, CBN, and banks’ chief executive officers, advocated the creation of a development fund for the nation’s industrial sector.

At the dawn of the millennium in Year 2000, hopes were raised and goals were set both by governments and organisations and even the African continent had the Millennium Development Goals, MDGs, that by the year 2010 which looked far away then, all problems facing the country and the continent, economically and politically, would have been solved and standard of living would improve. But rather than improve, the situation has worsened as many of the goals were not met and all hopes lost.

In Nigeria, many factors were responsible to not meeting the 2010 target from bad leadership to insincerity in policy implementation, policy inconsistency and even policy somersault. All these put together hampered the growth and the eventual comatose state of the real sector. The current economic recession has not helped matters as many manufacturing firms have been forced to close shop with many permanently closed down.

1. To save the situation

and revive the lost hope, Fashola came up with the infrastructural renewal programme to create the enabling environment for businesses in the state. “There were manifestations of dwindling infrastructure. There was less waterworks. We felt that if we don’t address the desperation, the consequences of desperation will manifest itself in corruption, aggression, crime. That is why we are building and I am happy to report that we are mitigating the desperation,” the governor said, noting that   the state government was reacting to a programme where the United Nations population agency characterised cities by size and classified cities with 10 million people and above as mega cities. The status comes with its consequences when there are more people than the resources can satisfy and this was why the government is tackling the issue of infrastructure in the state.

With Lagos being the economic nucleus of the country, a little leaven in the manufacturing sector in Lagos will spread across the nation. This was what prompted the governor to convene the Bankers’ Committee forum and lay to their charge the responsibility to come up with strategy to revive the sector. “We must put on our thinking caps in 2010. All the creativity, the experiences of our business and financial schools is what I think should be brought to the table in 2010,” the governor said but urged that this must be done in a way “that does not take you out of business and that helps the real sector to grow?”  

Although he stated clearly that the state of infrastructural decay in the country at present is as a result of 40

40 years of neglect during which banks declared huge profits amidst so much poverty in the country; when individuals built their own homes in very poor environment and drive very expensive cars on the worst roads. “We have tried to build our own power, boreholes and security but commonsense has shown that it would not work that way. If you have water in your own home, what about your cousin who is indigent?” he queried.

To the governor who is passionate about addressing the infrastructural gap, development fund is the only viable way to grow the nation’s economy. “I don’t think we do not have the mental and human acumen or capacity to do what is right. It is just to invite everyone to log on to a common purpose and understanding of why we are doing this. What we are about to embark upon may affect your balance sheets in a not-too-pleasant way in the short term; but the reality is that if we don’t do it, there may be no balance sheet at all,” Fashola stated.

It is actually a laudable idea that gives the banking sector an opportunity to work with the state government, especially one that is willing to work with the organised private sector in providing a conducive environment for businesses to thrive. Sanusi, who sees Lagos as the economic capital of Nigeria like Jakarta in Indonesia and Tokyo in Japan said it is an opportunity to work with a government that is committed to the development of Lagos to provide comfortable environment but pointed out a challenge. “It will require the cooperation of different segments of the economy, the ministry of power, infrastructure and others with a hard working, implementation-focused

technical team to achieve the goal,” he said.

The CBN governor explained that he had already taken it upon himself to play the role of a catalyst in Abuja by bringing all the parties together. “I guarantee you that the banks are committed to this. I understand that we must shore up this economy based on the ability of the financial institutions to play their roles as the transmission channel of all the institutions within the economy,” he stated and added that the central bank, will do all it could to support moves to improve the economy “so that six months from now, we would not be where we are today.”

To forestall a scenario whereby the situation could get close to what currently prevails in Somalia, Darfur or Zimbabwe, Rotimi Oyekan, the finance commissioner reeled out the tripod stand upon which the state’s financial strategy is hinged upon. Debt issuance programme, multilateral financing and public-private partnership, adding that the state government will continue to adopt any or a combination of these financing options to meet the challenges of transforming Lagos into Africa’s model mega city.

Responding to the call for the creation of a development fund, the CBN governor gave the government assurance to consider the option. “Your Excellency, we do understand that the future of this economy rests on the ability of financial systems and once we can structure financial products such that depositors’ funds are not placed at undue risk, we would work towards that,” he said.

 

Fashola: Advocates creation of development fund for industrial sector<

sector

Sanusi: Relishes the opportunity to work with Fashola