NDIC Promotes Doing Business In Recessed Economy

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For over 12 years running, the Nigeria Deposit Insurance Corporation (NDIC) has passionately kept faith with its media partners and stakeholders. Amidst continuous criticisms that the governing All Progressives Congress (APC) does not have a viable economic blueprint to take Nigeria out of recession, the Corporation moved to engage Business Editors, Finance Correspondents and other stakeholders on issues in the banking sector. COBHAM NSA and CHINYERE OBIORA report on some experts’ postulations at the annual NDIC workshop tagged: ‘Economic Recession and the Nigeria Banking Sector; Opportunities, Challenges and the Way Forward’

As expected, this gathering of NDIC management officials, journalists covering the financial sectors, some civil society organizations and other stakeholders had no qualms agreeing that the Nigerian economy in recession has adversely affected business activities with the attendant drop in productivity and profit profiles of most companies and individuals in the country.
Presentations after presentations as well as some interventions easily acknowledged that globally, many countries are experiencing hard times due to unstable global oil price and drop in foreign exchange earnings.
But most upsetting for discussants and participants was the distressing stories of innocent Nigerians whose hard-earned funds are currently trapped in the popular MMM (Mavrodi Mundial Movement) Ponzi scheme. However, it was noted that many failed to heed the warnings about the inherent dangers in such fluid and fraudulent investment operations.
But that Nigerians inadvertently lost a whopping 18 billion Naira to these schemes and their sneaky operators in a recessed economy is completely heartrending for NDIC as a major stakeholder in Nigeria’s financial system. This is so because the Corporation’s Managing Director and Chief Executive Officer, Alhaji Umaru Ibrahim remained a prominent voice of key financial sector regulators and supervisors that repeatedly warned against the fraud-ridden and bogus money-making plan. For him, Nigerians patronage of these visual financial institutions, called ‘wonder banks’ despite the huge risk public alarm was not only unfortunate but an unexplainable reckless financial gamble in a tottering Nigerian economy.
He said the decision to ring the alarm bell was reach because necessary because by existing statistics, no fewer than three million Nigerians are hooked on the deceit of these wonder banks with over 1.3 million people investment in the latest entrant of the wonder banks popularly called MMM (Mavrodi Mundial Movement).
He however sought effective media partnership to create awareness and sustained sensitization of unsuspecting members of the public on the likely losses whenever they patronize the phenomenon of illegal fund managers or ‘wonder banks’.
Away from the highlighted dangers of the Ponzi schemes, Director, Special Insured Institutions Departments (SIID), Central Bank of Nigeria (CBN) Mr Joshua Etopidiok admitted that oil price depreciation has impacted negatively on the operations of Primary Mortgage Banks (PMBs) and Micro Finance Banks (MFBs) with their non-performing loans rising above the 30 per cent and five per cent threshold respectively. He however, said for MFBs and PMBs to counteract the effect of rising prices of oil, they should focus on identifying and implementing solutions with the government, regulators, and supervisors playing stronger role in unleashing renewed dynamism towards economic diversification, especially through building infrastructure facilities, deepening regional integration, ensuring healthy urbanisation and creating tomorrow’s talents hub.
For the Chief Executive Officer, B. Adedipe Associates Limited, Dr Biodun Adedipe, the first thought in a recession is to refrain from spending, adding that manufacturers, wholesalers and retailers suffer massive decline in sales as profits would either shrink or disappear with the stocks piling up.  He said in recession, consumers are apprehensive about jobs loses and they readily withhold funds by not spending or borrowing for business transactions. He said the recipe to kick start recovery is for government to provide leadership through ‘abnormal fiscal stimulus’. Adedipe further said the business cycle impacts on banks more intensely in their lending operations, stressing that the current state of the economy has adversely affected lending activities of banks and the safety of risk assets.

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