ELAN lists threats to revival of economy revamp in 2018

The Secretary of Equipment Leasing Association of Nigeria (ELAN) Mr Andrew Efurhievwe has insisted that for the nation’s economy to improve before the end of the year, it is imperative for government to take into cognizance the stability of the Naira, interest, inflation and unemployment rates; attraction of foreign direct investments and the timely passage and implementation of the 2018 Budget.

In an exclusive chat, he also noted that the foreign reserves capacity to respond to any shock in the economy must also be taken into consideration. According to him, From all indications, 2018 is not likely to disappoint as the gains of the Federal Government’s 2017 – 2020 Economic Recovery and Growth Plan (ERGP) will have started becoming evident by the third quarter of this year.

Although the economy is still fragile, there are encouraging signs emerging. The World Bank has recently projected global economy growth of 3.1% with advanced economies at 2.2%, while developing economies at 4.5% and Nigeria to grow at 2.5%, though the International Monetary Fund (IMF) projected Nigeria’s growth at 1.9%. Other macroeconomic fundamentals include receding inflation rate in last few months currently at 15%, increasing foreign exchange reserves at over $40 billion presently, far-reaching reforms to the foreign exchange market, putting the official exchange rate at N305/$ while the parallel market is N365/$.

Speaking on the leasing industry, he stated that the impact visibility of leasing is increasing, contributing to capital formation in the economy and creating wealth.  ‘In 2016, outstanding lease volume was estimated at N1.26trillion, up from N1.1trillion in 2015, representing a growth rate of 14 percent. A better performance is expected in 2017 .given the  relatively stability in  the economy compared to  2016 .The saying that leasing thrives during seasons of economic boom and recession, has been demonstrated over the years, as the industry remained resilient in challenging times, financing.assets worth over N6.89trillion in the past ten years.’’

According to him ‘the availability of cheap long term funding will no doubt enhance the capacity of lessors to deepen leasing penetration in the market. A major way to broaden the funding sources is to allow leasing companies to access pension, sovereign wealth fund and the various intervention funds for development in specific sectors of the economy.  Insurance funds and the development of specialised financial instruments can equally be important funding sources for leasing.

‘Conclusively, he noted that ‘government should continue to strengthen the capacity of the leasing industry and make it more responsive to its developmental role in the Nigerian economy. A major support Initiative was the enactment of the Equipment Leasing Act 2015. The Act brings together relevant stakeholders under a public private partnership arrangement to enhance its developmental objective with the Ministry of Finance empowered as the supervisory ministry for the leasing industry.