PRESIDENT Bola Tinubu said his administration plans to float a National Credit Guarantee Company (NCGC) to expand risk-sharing instruments for financial institutions and enterprises.
The company, which is expected to start operations before the end of the second quarter (Q2) is a partnership among government institutions such as the Bank of Industry, the Nigerian Consumer Credit Corporation, the Nigerian Sovereign Investment Agency, and the Ministry of Finance Incorporated, the private sector, and multilateral institutions.
Recall, businesses have struggled to have access to finance at a favourable interest rate, with the Central Bank of Nigeria’s (CBN) monetary policy committee last interest rate benchmark for banks in November 2024 put at 27.50 per cent.
The interest hike at 27.50 per cent put lots of businesses enterprises at huge risk with banks lending at almost 35 per cent, but President Tinubu believes the scheme is a relief to easier access to finance for business and the manufacturing sector.
“This initiative will strengthen the confidence of the financial system, expand credit access, and support under-served groups such as women and youth. It will drive growth, re-industrialisation, and better living standards for our people,”the President said.
While conceding that 2024 posed numerous challenges to Nigerians and households, the President said 2025 will bring brighter days.
The President harped on increases in foreign reserves and the prospects for the Naira rebound, noting that these are indications that the economy will stabilise in 2025.
“Economic indicators point to a positive and encouraging outlook for our nation. Fuel prices have gradually decreased, and we recorded foreign trade surpluses in three consecutive quarters.
“The stock market’s record growth has generated trillions of naira in wealth, and the surge in foreign investment reflects renewed confidence in our economy. Nevertheless, the cost of food and essential drugs remained a significant concern for many Nigerian households in 2024,”he stressed.
He also expressed the government’s commitment to intensifying efforts to lower the cost of living by boosting food production and promoting local manufacturing of essential drugs and other medical supplies.
The President further reassured on his plans to reduce inflation from its current high of 34.6 percent to 15 percent, adding that, “with diligent work and God’s help, we will achieve this goal and provide relief to all our people.
“In this new year, my administration will further consolidate and increase access to credit for individuals and critical sectors of the economy to boost national economic output.
He also urged the governors and local council chairpersons to work closely with the central government to seize emerging opportunities in agriculture, livestock, and tax reforms and move our nation forward.
The ICIR reported that CBN’s hawkish and unrelenting orthodox monetary policy boosted banks’ earnings, but inversely affected the operation of other sectors of the economy including manufacturing and small and medium-sized enterprises (SMEs).
“What manufacturers and other investors need at this time is some oxygen and stimulus, not policy measures that would worsen an already suffocating situation,” an economist and former director-general of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said.
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.