CBN Governor explains high interest rate

Odidison Omankhanlen, Lagos - updated: Monday 16-06-2008

Chukwuma Soludo, CBN GovernorTHE Governor of Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, has explained that the present high interest rate is to control the growing inflationary trends in the economy occasioned by the fiscal spending of the three tiers of government.

Soludo made this disclosure last week in Lagos at an interactive forum between the Manufacturers Association Nigeria (MAN) and the Central Bank of Nigeria (CBN).

According to him, it was necessary for the CBN to intervene to avoid inflation, stressing that manufacturers cannot operate under a regime of high and volatile inflation.

The CBN Governor also said that the Small and Medium enterprises Equity Investment Scheme (SMEEIS) was scrapped because the scheme was no longer a long-term sustainable approach of funding Small and Medium Enterprises (SMEs), adding that apart from its inability to fund the SME sub-sector on a long-term basis, the equity side of the scheme was nothing to write home about.

According to him, “The way the scheme was being run was not in line with the objectives of the banks. It was diverting and distracting the attention of the commercial banks, hence the scrapping of the scheme by bankers’ committee to give way to the micro-credit funds scheme.

According to Soludo, the replacement of community banks with micro-finance banks in the country was to give room for competition, stating that they lacked enough capacity to carry out the statutory role expected of them.

He was optimistic that the micro-finance institutions would achieve its desired objectives, stressing that the level of acceptability and statistics of performance since inception showed that they were on track.

Skye Bank to spend N6b on transport scheme in P/H

Odidison Omankhanlen, Lagos

Akinsola Akinfemiwa, MD, Skye BankIn continuation of its industry leadership in project financing expertise, Skye Bank has concluded arrangements to invest N6 billion in a mass transit scheme in Port Harcourt, Rivers State capital.

Addressing newsmen in Lagos at the weekend, the General Manager, Risk Management & South South, Mrs. Ibiye Ekong, noted that the bank was partnering with Rivers State government in the transport sector in line with Public Private Partnership (PPP), adding that they were committed to bringing to bear the bank’s unmatched pedigree in project financing in such sectors as real estate, education, agriculture and health, among others.

Ekong noted that the first phase of the project kicked off recently with the inauguration of 20 buses at the cost of N500 million, stressing that 35 buses were being expected next month.

“We are in partnership with the Rivers State government for the development of the transport sector. This is clearly in line with our expertise in project financing.

“We have started with land with the provision of mass transit buses in Port Harcourt. The first phase has taken off with 20 buses. We are expecting another 35 before the end of July. So far, the responses have been great and quite encouraging. We are fully committed to the success of the scheme,“she said.

On what informed the choice of Port Harcourt, Ekong explained that it was part of the bank’s strategic plans, disclosing that the bank was also holding high level partnership discussions with some other state governments across the country on infrastructural development.

“We are not limiting ourselves to Port Harcourt alone. We are already participating in Lagos. After Lagos, Port Harcourt comes next as next high economic area. We are also discussing with some state governments. As soon as we conclude talks we move in,” she stated.

She lauded the commitment of the Rivers State government and law enforcement agents to the success of the scheme in the state, saying that some of the infrastructural challenges facing the scheme such as bus stops, shelters, dedicated routes, roads, and traffic congestions were being addressed.

She attributed the growth of the bank in recent times to the harmonisation of synergies and competencies of the constituent banks and sound management team, adding that the bank’s services and products have remained unique in the industry.

“There is no reason why we should fail. On daily basis, we are thinking of how to improve our operations. We are led by a good board and supportive management team. We have the capacity regarding finance.

“We keep improving on our operations which are IT driven, saying yes to our customers and indeed all stakeholders. We are certainly looking beyond the sky,” she said.