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Govt can leverage more partnerships to tackle infrastructure deficit – Rotimi, MD GMB

By Guardian Nigeria
26 May 2023   |   7:29 am
Greenwich Merchant Bank Limited (GMB), a leading bespoke financial solutions provider with commitment to create value for its stakeholders has re-echo the need for governments (both the federal and the state) to champion strategic partnerships to combat infrastructural deficit..

Rotimi

Greenwich Merchant Bank Limited (GMB), a leading bespoke financial solutions provider with commitment to create value for its stakeholders has re-echo the need for governments (both the federal and the state) to champion strategic partnerships to combat infrastructural deficit in the wake of increasing debt levels.

The Managing Director/Chief Executive Officer of the bank, Bayo Rotimi disclosed this during a parley with newsmen in Lagos. He stated that “In light of Nigeria’s overwhelming debt burden totaling ₦77 trillion and the huge cost of servicing that debt, one of the most effective options the country can adopt now in financing infrastructure is by identifying investors who are willing to support capital projects under a mutual partnership agreement.”

According to him, GMB is currently engaging Federal and State Governments to change its debt strategy to partnerships because significant revenue is not generated to tackle the challenge.

“GMB has strategic partnerships with local and foreign development finance institutions and investors who are interested in specific sectors such as housing and healthcare, while some are focused on capital infrastructures such as airports, seaports, and toll roads,” Rotimi said.

He stated that Nigeria does not have enough cash flow to support continuous borrowing, hence the prompt for GMB to commence advising the governments on strategic partnerships.

“As bankers, one of the criteria for lending is the mode of debt servicing. Currently, Nigeria’s revenue has spiralled towards debt servicing, therefore, capital expenditure and social investments are suffering. However, there is always an opportunity to reset and do things differently. So, for us at GMB, we are not dwelling on mistakes, rather, we are focused and committed to supporting a positive economic turnaround.”

The MD/CEO further explained that the bank is currently advising one of the state governments on a toll road concessioning and this is expected to be replicated in other states when completed.

Raising funds for government
While noting that GMB’s focus is now on alternative financing, including non-interest financing such as the issuance of Sukuk instruments, Rotimi said the Bank has raised more than $2 billion for the Federal Government over the last two years.

His words, “We have raised an excess of $2 billion subscriptions for the federal government. Additionally, we are also proud to support the Federal Government via its agency in the housing sector for the Family Homes Fund Limited (FHFL).

“GMB, supported in the issuance of two series of Sukuk for FHFL totaling N30 billion, both of which were over-subscribed, again making an impact while deepening the financial markets. The FHFL Sukuk was the first ever corporate Ijarah Lease Sukuk issuance registered by the Securities & Exchange Commission (SEC) in Nigeria.”

“We have taken our alternative financing pedigree beyond just the Federal Government. Recently, GMB advised and aided TAJBank Limited, the third non-interest Islamic bank to be licensed in Nigeria – on the first Mudarabah Sukuk Issuance in Nigeria.

“TAJBank Limited raised N11.35billion from the Nigerian capital markets under a N100billion Sukuk issuance programme. Currently, we are advising another non-interest Islamic bank, other financial and non-financial institutions on alternative financing. So, we have positioned ourselves as a leader in the issuance of non-interest financial products,” he added.

Further speaking, the bank chief said: “The upscaling of our operations into mainstream banking aligns with our strategic vision to build an enduring institution that provides holistic services for our shareholders.”

Owned by reputable corporate and private investors, GMB’s operations cover Corporate Banking, Private Banking, Investment Banking, Asset & Wealth Management, Treasury & Global Markets and Securities Trading.

The bank is rated BBB (NG) Long Term and A3 (NG) Short Term with Stable Outlook by Global Ratings Agency (GCR). Its deep knowledge of the market, nimbleness, smooth and reliable processes driven largely by technology and the high-quality personnel put it on the cutting edge of strategic importance to its select clientele.

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