A FORMER Secretary to the Government of the Federation, Olu Falae, has described the involvement of the Central Bank of Nigeria (CBN) in retail banking as “a financial heresy.”
Falae, who spoke today in a monitored broadcast in Abuja, said the apex bank’s involvement in retail banking business had fault lines.
As had been reported by The ICIR, the CBN had expressed worry over the repayment of loans issued farmers through its Anchor Borrowers scheme. This is a key concern from Falae, who faulted the retail banking methods by the apex bank.
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He said, “I was astounded and shocked when a few years ago I read in the papers that the Central Bank of Nigeria was doing retail banking to farmers. The CBN hasn’t got the kind of people with the training and orientation to do retail banking.
“When the apex bank puts out lots of money that it cannot get back, problems begin to arise. Also, when we cannot deal with the security situation, agricultural production is negatively affected.”
Speaking on his near-death experience with kidnappers, he said that never deterred him from his farming activities.
“As you pointed earlier, I was kidnapped for four days, and my farm was attacked again and again, but because I am who I am, I didn’t give up. The government must address this concern,” he said.
Commenting on the economic situation in the country, Falae said the right people must occupy the right positions in the economic field to get the right results.
He posited, “The Central Bank, the Ministry of Finance, and other economic ministries must have the right set of people. These are the issues.
“And then, the interest rate is not just not right, and the power situation which triggers the economy is not available.”
Stressing the importance of security, Falae suggested that state police and other security measures that must ensure people live peacefully should be encouraged.
The former Finance minister also expressed concerns on the current interest rate regime, insisting it could disincentivise a productive economy.
“You cannot be lending at 25 per cent for people and expect them to produce goods that must be sold for profit,” Falae stressed.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.