To take Nigeria out of recession the Federal Government has been called upon to take pragmatic measures with regard to legal regulatory and institutional reform as well as look for alternative sources of revenue generation to boost the economy.
Also, the Central Bank of Nigeria, CBN has been said to be overburdened with monetary policy and need to focus on its three major responsibilities.
Dr Olisa Agbakobo stated this at a Finance Correspondents Association of Nigeria, FICAN forum held in Lagos at the weekend, stressing the need for government to set up new regulatory agencies that would supervise banks’ lending and its ethics.
He said: “There is need for massive legal regulatory and institutional reform in Financial Services Sector, FSS as money is oxygen to economy but not flowing as a result of bottlenecks.
“Government needs to create a Prudential Regulatory Authority – to supervise banks to lend. Create a Financial Conduct Authority to get banks to behave. Consequently limit CBN to monetary policy. CBN should focus on lending, interest rate and exchange and take away banking supervision to new Prudential Regulatory Authority and banking ethics to new Financial Conduct Authority. If banks focus on lending and not trading, money will flood the system for productive value.”
Commenting on alternative sources of revenue, he said: “We will also need to urgently explore alternative income sources from agriculture, maritime, aviation, infrastructure, mining etc. If government’s efficiency is enhanced and the states are required to contribute as economic enablers, then there will be less strain on the national purse and states will be forced to generate income.”
Continuing, he said: “We need to create a robust mortgage private sector led market, by waking up dead capital trapped in the national housing stock valued at 7 trillion dollars. Government must get out of business and enable private sector led growth.
“The housing sector needs to be revitalized. Property consists of two values, physical and conceptual. The physical value may be fixed in say, a house. The abstract or conceptual value is fixed in property law systems. In developed nations, property law allows owners of housing, to represent their value in the conceptual realm. This possibility allows easy access to credit that in turn generates capital for development.
“In Nigeria with a very weak legal regime, conceptual representation of property to create value is missing. Yet the housing assets inventory of Nigerian property exceeds six trillion dollars. If the value of property is indexed to the banking system by massive legal reform of the property system, we can create an instant credit market in excess of our gross national domestic product multiplied by a thousand times – money will be then be available to finance development. Debt servicing will be a simple issue.”