Adebayo: Credit Constraints Stifled Growth, Hampered Job Creation

James Emejo in Abuja

The Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, has lamented that the lack of access to credit had stifled economic growth, leading to a decline in investment and job creation.

Speaking at the opening of the national workshop on Bankruptcy and Debt Collection in Nigeria, organised by the Nigerian Office for Trade Negotiations (NOTN) in collaboration with AELEX, the minister added that the country’s credit system had been facing numerous challenges over the years.

He said many businesses have been unable to access credit, including trade due to finance scarcity, high interest rates, and the stringent lending conditions that are often imposed by the banks and other financial institutions.

Adebayo stressed the need to promote the institutionalisation of a vibrant and sustainable credit system in the country, which should sufficiently incentivise financial institutions to lend to especially Micro, Small and Medium Enterprises (MSMEs).

He said this was particularly critical to enhancing the overall competitiveness of the national economy, leading to increased productivity, economic growth, and employment generation, as well as the promotion of entrepreneurship and increased benefits from the country’s participation in international trade.

He said as part of the efforts by the present administration to enhance the use of trade policy as a veritable tool for the promotion of the growth and socio-economic development of the country, the Federal Executive Council, (FEC) in March last year, under the ministry’s Trade Policy Action Plan 2022-2026, approved the proposal to establish the Nigerian Bankruptcy Commission with Debt Collection Offices in the 36 States of the federation and the Federal Capital Territory (FCT).

According to him, the purpose of the commission and its debt collection offices is two-fold – to provide an effective legal and institutional framework to regulate business behaviour, with a view to ensuring that only viable concerns continue to operate – as well as to ensure that customers pay their trade debts on time, thereby significantly reducing the current challenges associated with the enforcement of trade -debt contracts in the regular courts.

Adebayo pointed out that if successfully implemented, the commission and its debt collection offices would not only be complementary to the ongoing reforms under the Presidential Enabling Business Environment Council (PEBEC), but also significantly contribute to the creation of a modern 21st Century credit-oriented economy for the benefit of producers, retailers, and consumers in Nigeria.

The minister said the federal government will continue to evolve measures to promote financial inclusion by ensuring that all Nigerians have access to financial services, regardless of their income level or location.

He said this will positively contribute to financial stability and enhance trade and economic growth, adding that the government remained committed to promoting financial literacy and consumer protection to enhance the confidence of both investors and consumers.

Adebayo said, “Financial literacy is required to enable the citizenry to make better and informed decisions, especially regarding how to use trade credit and debt as a source of short-term funds, including the risks that may arise from the priority distribution of a debtor’s property in bankruptcy.”

He commended the Director-General/Chief Trade Negotiator, NOTN, Dr. Yonov Fred Agah, for organising the workshop which he said provided the platform for stakeholders to engage on the important issue that has become increasingly critical in the efforts to place the Nigerian economy on a trajectory of rapid recovery and growth.

He said collective insights, experiences and recommendations by participants will significantly contribute to the development of policies and strategies that will promote the enthronement of a vibrant and sustainable credit system in the country.