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Still Far From the Promised Land

Posted by Anthony Akaeze on 2006/10/08 | Views: 387 |

Still Far From the Promised Land


In Nigeria's 46-year existence, as an independent nation, 2006 will go down in history as an unforgettable year. This is because of the achievements recorded by the country in the economic and financial sector.

Nigeria has recorded some economic successes in 46 years, but poverty has refused to go away

In Nigeria's 46-year existence, as an independent nation, 2006 will go down in history as an unforgettable year. This is because of the achievements recorded by the country in the economic and financial sector.

In April 2006, Nigeria successfully negotiated its way out of the record books as a debtor nation. Ngozi Okonjo-Iweala, the former Finance Minister, led the Nigerian government team that negotiated the deal. Nigeria had been indebted to donor agencies like the International Monitoring Fund, IMF, World Bank and Paris Club to the tune of $30 billion dollars.

The inability of successive administration in Nigeria to meet its obligation to the creditors was regarded as an albatross. Even then, the country, in the bid to save face, deployed part of its earnings, over the years, to service the loans. The debt had piled up over time because of the failure to redeem it. This became a source of worry to the Olusegun Obasanjo administration. To free the country from the grip of the creditors, Okonjo-Iweala was given the backing to seek out the best means to clear the debt.

Okonjo-Iweala, a former World Bank Vice-President, successfully negotiated the deal that earned for Nigeria 60 percent cancellation of the total debt, a development that paved the way for the country being expunged from the book of "highly indebted poor countries."

In the banking sector, the government also made its impact felt. On January 2, 2006, the Central Bank headed by Professor Charles Soludo, announced the 25 banks that qualified to carry out banking services in Nigeria. These banks met the government's December 31, 2005, deadline to raise their capital base from N2 billion to N25 billion or forfeit their banking licence as first-rate financial institutions.

Initially, the directive was greeted with pessimism by many Nigerians who thought it was too stringent a condition. The government was not unaware of this. However, it offered a lifeline to the banks by stating that two or more banks could merge. As the December 31, 2005, deadline approached, and with government not ready to shift ground, the banks had little choice but to merge. This resulted in new banks like Skye Bank, Spring Bank, First Island Bank, Unity Bank, Platinum /Habib Bank and others coming on board.

According to Soludo, Nigeria now has a more reliable banking system. He said that the banks, as currently constituted, are better placed to act as a catalyst for economic growth in the country's key sectors. The impression is that with a formidable N25 billion capital base, the finance houses will be able to support those who need financial assistance, with less risk to themselves. Also, interest on borrowed funds will expectedly be low.

The CBN also recorded some strides in the foreign exchange market. Unlike in recent years when the naira and dollar exchanged for different rates in the finance houses and parallel market, it is to the CBN's credit that the naira now exchanges at the current rate of 130 to 1 dollar, both in the banks and parallel market.

Such developments have led the Obasanjo administration to insist that it has recorded a great success. Although some Nigerians may not disagree with the government's position, others do not think so. Critics insist that, even for these noted efforts, the gains have not had impact on the generality of the people. This is in view of the fact of a high cost of living. Damian Osaretin, an insurance broker, said: "The government's economic policies make little or no sense to the average Nigerian who is not sure of when his next meal might be. For instance, how many people have access to dollar or Euro? The government should come up with policies that will truly touch the lives of Nigerians. People are suffering,'' he added.

Some others, however, believe that the government has merely created a platform that might help kick-start the economy. Chiazo Oluchi, a teacher, while appraising the developments, said: "These should serve as a bedrock for future progress, especially the clean slate we got from the creditor clubs."

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Comments (24)

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ur so boring(To, Northern Territory, Australia)says...

have u ever thought the garbage or the toilet might be jealous? Ur so full of shiz- white piece of shiz BET lol. That's where ppl like you belong (toilet garbage etc), ik the truth hurts but dont take it as an insult im just trying to describe you; ik im good at it ty-The truth hurts right. JSYK black ppl aren't nerds were just smarter than you oops Btw BLMM!!!

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ur so boring(To, Northern Territory, Australia)says...

@robloxian

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emilia(Lagos, Lagos, Nigeria)says...

Wow,trying to get across to Ekene jnr he happens to be my old friend,lost his contact.any info would do me good

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Valarie(Nairobi, Kenya)says...

What’s your point?

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robloxian(Bangor, Maine, US)says...

hahahaha u r a wierdo…hehehe

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ur so boring(To, Northern Territory, Australia)says...

have u ever thought the garbage or the toilet might be jealous? Ur so full of shiz- white piece of shiz BET lol. That's where ppl like you belong (toilet garbage etc), ik the truth hurts but dont take it as an insult im just trying to describe you; ik im good at it ty-The truth hurts right. JSYK black ppl aren't nerds were just smarter than you oops Btw BLMM!!!

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robloxian(Bangor, Maine, US)says...

wow so bad.