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Delay in budget presentation, passage not healthy for economy – Former CIBN president

By on December 12, 2014

A former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mr Okechukwu Unegbu, Wednesday said delay in the passage of federal budget was not healthy for the nation’s economic development.

Unegbu said this in Abuja in an interview with the News Agency of Nigeria (NAN).

He said because of delays in the passage of budget, the federal government depended largely on funds it borrowed from the Central Bank of Nigeria (CBN).
He said such a practice was not good for the country’s economic growth.
“What this means is that there is no development planning; there is nothing the country can work on and the country will depend on borrowing temporarily from the CBN.

“This money we borrow from the CBN is funding only recurrent expenditure without anything being done in the capital expenditures.

“That is why I wonder how the Federal Executive Council (FEC) funds the projects that are approved every week at the FEC meetings,’’ he said.
He said the authorities concerned should put their acts together and avoid delays in budget presentation, adding that it was affecting the nation’s development.

“The various inputs that make up the national development plan will be affected greatly.

“It is something that disturbs those of us in the economy, those of us that understand what is called public financing.

“As the giant of Africa, we are supposed to be far ahead of where we are today; so we should work together to grow our economy,’’ Unegbu said.

On the drop in interbank lending rate to 50 per cent from 70 per cent, Unegbu said it was not good enough for the country ‘because we were still not yet out of trouble.’

According to him, interbank lending rate is the rate at which banks lend money to one another overnight.

“If you went to the bank to borrow, the interest you will pay will still be as high as 60 per cent because there is scarcity of funds in the Nigerian economy.

“We are in a spending season but some people will not even get their funds kept in the banks now because there is serious liquidity in the country.

“Also the rate of dollar exchange to Naira is N182.

“This means that in the other market or what I call the under-table market, you will get a dollar for about N190 and that’s not good for the country,’’ he said.
He advised CBN not to be in a hurry in formulating policies for the banking sector to avoid inadvertently creating more challenges for the economy.