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Nigeria cannot develop without borrowing – Bismarck Rewane

By on October 7, 2011

The Managing Director and Chief Executive Officer, Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, Thursday said that Nigeria cannot develop without borrowing funds internally or externally.

Rewane who made these remarks while presenting a speech titled: “Nigeria: A Fresh Start,” at a financial market conference organised by Access Bank Plc in Lagos, lamented the country’s low debt to Gross Domestic Product (GDP) ratio. He said that the country’s 17 per cent debt to GDP, ‘is a disaster.”

Rewane said: “I think that Nigeria now has a phobia for borrowing, both in their personal life, corporate life, public life and even in their speculative life like going to the stock market. No country has been able to develop without debt. We have to understand that we cannot develop without borrowing.”

The economist urged Nigerians to discontinue to see corporate governance as a private sector issue, saying that corporate governance should start from the public sector so as to help grow the economy.

He however, stressed that with the consolidation in various sectors of the economy such as banking, brewery, communications, among others, the country was on a path to growth.

“You cannot develop without saving, that is why we must allow the Sovereign Wealth Fund (SWF) to stay. The economy is on the threshold of growth, but we need hard work,” he added.

Earlier, in her keynote address, the Deputy Governor of the Central Bank of Nigeria (CBN), Dr. Sarah Alade, said that the impact of the reform embarked on by the apex bank had been very positive.

Alade, whose address was read by the Director, Branch Development, CBN, Mr. Charles Morde, argued that the reforms in the banking industry would provide businesses with the opportunities to plan better and have greater opportunities.

She said that the CBN would continue to pursue policies aimed at growing foreign direct investments in the country.

“A growing a dynamic banking sector is essential for the growth of any economy. Banks must lend to projects and manage depositors’ funds properly.

Banks must ensure that they have the right kind of people driving their systems. Banks must not only take steps to reform their images, but must ensure that they manage their image properly. The industry must ensure that their is in existence, a robust risk management process,” Alade said.