By Ademola Alawiye

Monday, 3 Jan 2011

A former Deputy Speaker of the House of Representatives, Mr. Chibudom Nwuche, has blamed the crisis that rocked the financial sector in the last two years on monetary and fiscal authorities.

Nwuche, who is also a member of the Presidential Advisory Council, said in a statement on Wednesday that many public companies recorded losses in the 2009 financial year because government did not take proactive steps to stem the effects of the global financial crisis.

He said, ”Many countries over the world, especially advanced countries, introduced different packages and stimulus programmes to reduce the effects of the financial crises. The financial authorities waited for a long time before intervening.”

He added, ”The Nigerian financial market remains a major source of short and long-term funds and should not be neglected. Government should have acted faster to avert the global crises. Other countries have already recovered from the crises, while we are still struggling to recover.”

Nwuche urged authorities to formulate policies that would enhance the successful operations of the Asset Management Corporation of Nigeria to aid the growth of banks and listed companies at the Nigerian Stock Exchange.

He, however, explained that, with the current policies put in place, many companies would return to profitability at the end of the 2010 financial year.

He pointed out that companies should be encouraged to source for funds at the capital market, given the prevailing interest rates in banks.

He said, ”There is a need for government policies to be checked to ensure that local industries are encouraged through easy access to funds instead of groaning under heavy interests from banks‘ loans so that they will be able to drive the economy.

The only place where such funds can be accessed is through the capital market. The private sector should be the driver of the economy if well encouraged to participate actively.”

Source: Punch