Take drastic measures, retrace steps to rebound economy, ICA tells govt
As the Federal Government expressed optimism that the current recession would be short-lived, the Registrar/Chief Executive of the Institute of Credit Administration (ICA), Prof. Chris Onalo, has urged government to drastically cut down on its expenditure, among other quick fixes and severe measures.
Speaking during the ICA monthly members’ credit management webinar, yesterday, Onalo said: “It sounds hard and tough, but government must quickly arrest the situation from further complicating economic lives of Nigerians, such as returning the petroleum pump price to N125 per litre, opening up the borders, putting a stop to spending relating to purchase of foreign items that undermines our scarce foreign exchange, revision of Value Added Tax (VAT) to 5.7 per cent from 7.5 per cent, removal of taxes and levies that small and medium scale enterprises have had to contend with over the years and cutting down on expenditure on the part of government, even though this could also lead to loss of contracts.”
He said due to the Coronavirus-induced recession, individuals, public and private institutions would record an increase in loan requests, adding: “Many employees have become unemployed and entrepreneurs who took loans to support their businesses were affected by the lockdown measures.
“The effect of this will be a widespread credit default in corporate and private finances.”
He encouraged Nigerians to modify their spending habit to suit the current situation, noting: “One of the villains of financial management in this technological era is the e-banking system. Mobile transactions, debit and credit cards cause more financial crises, especially for people with poor management skills.
“When trying to tighten your belt, try to go traditional with your banking…”
Director, Economic and Financial Policy at CEDAF Scotland, Dr. Chioma Nwafor, who spoke on the challenge of managing corporate credit default induced by COVID-19 and re-thinking risk management, said due to the adverse effects of the pandemic, such as increased loss of income/revenue, plunge in economic activities and pressure of cash flows, organisations would have to re-think and strengthen their approach to risk management to be better prepared for the ‘Next Normal.’
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