WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2010-04-05 Time: 20:00:02 Posted By: News Poster
Lagos – THERE IS no gainsaying the fact that governments the world over through their fiscal policies constitute the driving force behind economic development. In most developed nations, the government provides the broad policy planks upon which the private sector – whose main motive is profit making and therefore more likely to be a more efficient allocator of resources – builds to propel the economy forward.
However, in most developing nations, such as Nigeria, the government is not only responsible for providing broad policy planks but as the sole custodian of financial resources it is also largely responsible for translating its own vision into reality, with the private sector playing only a very limited role. The end result has been that governments in developing nations are unrealistically saddled with the responsibility of financing every social and economic activity while the private sector restricts itself to just ‘doing business.’
Rampant corruption and misapplication of financial resources by successive regimes in most of these developing nations, Nigeria not excluded, have culminated in a situation where available resources can no longer meet gaping infrastructure needs. The increasing inability of governments in developing nations to meet the infrastructure needs of their citizens have led to heated public debates on the best way forward.
In Nigeria, the government has responded by creating the Infrastructure Concession Regulatory Commission (ICRC) to superintend all activities involving its Public-Private Partnership (PPP) programme. However, as well intentioned as the PPP is, the private sector has not been able to actively play its expected role for a number of reasons. These reasons range from the crowding-out effect by the government and lack of consistency in policy implementation to the existence of untenable interest and foreign exchange rates, among others.
Fortunately, the Central Bank of Nigeria (CBN) has initiated a policy that is aimed at addressing one of the major shortcomings of the PPP. The apex bank – working in concert with the nation’s 24 universal banks through the Bankers’ Committee – recently announced the establishment of an Infrastructure Finance Office that will enhance a sustainable financing framework by giving fillip to the ability of the private sector to access long term capital on concessionary terms.
It is no secret that there has been – and continues to be – a dearth of low-priced long-term funds in the nation’s money and capital markets. In funding long-term gestation projects the nation’s banks have tended to break a cardinal rule – never fund long-term assets with short-term funds, otherwise known as tenor mismatch. This practice encourages gapping and speculations about interest rate movements that are in dissonance with the risk-averse conservative nature of banks. Little wonder that banks that have faced serious liquidity and solvency problems are those whose managements made the unpardonable error of ‘betting’ their banks.
This newspaper highly commends the CBN and the participating banks for thinking out of the box in a very positive manner. There is no doubt that the CBN’s initiative would indubitably act as a much-needed catalyst for actualizing the vision of the government in bridging the nation’s infrastructural gap through making long-term funds available at concessionary rates to the private sector. It is also important to note that the plan calls for both the Infrastructure Finance Office and the Infrastructure Concession Regulatory Commission working closely together to achieve set targets.
Having said the foregoing, we believe that the CBN initiative still constitutes a stopgap measure and should be more appropriately seen as a means to an end rather than an end itself. The real acid test lies in providing an enabling environment for the private sector to flower the deepening of the nation’s money and capital markets. Prevalent interest and foreign exchange rates are stifling to business growth and viability.
It behoves the CBN and the government to fashion out monetary and fiscal policies that would facilitate the creation of a sustainable long-term financial framework for real economic growth and development. It is with this in mind that we conclude that the CBN initiative is a small step for empowering the private sector and a giant leap in providing an economic stimulus for the nation’s aggregate economic activity.
Original date published: 4 April 2010
Source: http://allafrica.com/stories/201004050455.html?viewall=1