The Managing Director, Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru, has said that domestic financing options, through domestic savings and private sector financing, are critical to the economic growth of the country.
He stated that while majority of developing countries relied on foreign aid as the main financing source for development, “historical experience in emerging economies reflect otherwise.”
Kuru said commercial banks and monetary authorities in Nigeria should key into domestic financing options in the growth and development process of the economy.
The AMCON managing director stated these on Thursday at the Fellows’ Luncheon of the Institute of Directors Nigeria in Lagos, where he was the guest speaker.
Kuru stated, “Financial development is a key driver of economic growth. No doubt, development finance is part of the key architecture to sustainable growth.
“Another aspect of financial development is financial inclusion. Without financial inclusion, inclusive growth will remain elusive. Similarly, financial repression is counterproductive and inimical to economic growth.”
He added, “Emerging countries’ experience shows that reforming the financial system is important to attract foreign portfolio flows and achieve stock market and banking sector development. Thus, these countries have over the years experienced fundamental changes in the structure of financial and capital flows from developed nations.
“This explains why the Central Bank of Nigeria is encouraging banks to lend to the real sector, in addition to various interventions it has embarked upon. And there is a whole financial inclusion programme going on at the CBN.”
Kuru had earlier stated that businesses were more successful when there was an enabling economic environment for economic growth.
“An important part of this environment relates to physical capital and infrastructural development of which energy is a primary component. This comes through access to electricity, which could power industrial growth,” he said.
According to him, energy availability also improves a country’s competitiveness and ability to pursue an export promotion development strategy.
“Meeting the energy needs also has implication for the welfare of the citizens. It enables the poor to participate actively in the growth process,” Kuru added.