Lending crucial to post Covid19 prosperity

By Bayo Ogunmupe Contrary to the fears of many, Nigeria has only been mildly hit by the corona virus epidemic. However, normal, preventive measures to curb the virus shut the people out of the sources of their livelihood. Palliative measures to soften the devastating effects of the pandemic have not been far-reaching enough in many states of the federation. And to that many are complaining that they are yet to receive anything from the federal or state governments. Sadly, those who got something suffered the toil of long queues and the humiliation of being seen as poor. Palliative procurement and distribution have also been associated with corruption and nepotism. When the Minister of Humanitarian Affairs vows to have spent millions of naira in the procurement of these welfare packages we in the South see it as bare faced sloganeering. Even this septuagenarian journalist who has spent three decades serving in Lagos has seen no one been so honorable as to receive a palliative from any government be it federal or state. What we overhear in the newsroom are complaints that "when I asked I called a long time colleague now a press secretary to a governor, all he did was to send me half a bag of rice as if the rice will cook itself." But truly, people have become very poor with half wages and retrenchment from time to time. And without pension if even you have reached a pensionable age or not; no respite or relief packages from any federal or state agency. You can only beg or rely on primordial relatives. For job losses after weeks in isolation, companies cannot be blamed, for they could not do business because lockdowns have kept customers off the streets. many are not even able to cash their money from banks because bank officials only allow their cronies to withdraw money from their bank accounts; when the Automated Teller Machines are empty. The months of March, April, May and June 2020 were a period of immolation without respite in Nigeria. The people in government houses were unaware of the pains which was why they didn't spread palliatives for succor. For the post-Covid19 economic recovery and prosperity in Nigeria, our banks have crucial roles to play. Collateral and interest free lending will be crucial to a post pandemic recovery in this country. The Central Bank of Nigeria, the Presidential Economic Advisory Council and the banks are well advised to prepare for this if Muhammadu Buhari hopes to lift Nigeria out of the woods. Cash backed welfare initiatives are necessarily being channeled through banks around the world. Though some recipients are choosing to put these loans in their savings accounts instead of investing, still there is a consensus that banks would not be able to make as many loans as they did in unregulated times of the past. Like elsewhere around the world, the Central Bank of Kenya had already restructured $1 billion of loans by the middle of May 2020. Some other banks are even being surprisingly emphatic on loan restructuring. The Central Bank of South Africa even allows some of its customers to give leeways on loan repayments. In Germany, the government pays banks and private commercial enterprises to hold off on layoff plans, opting to cut salaries and work hours. Around the globe, banks have also ramped up loan guarantee schemes, adding incentives like cap on losses for banks to induce participation in these cushioning measures. Despite the challenges non interest loans pose on profits, government must impose as a matter of policy, new regulations aiding the post-Covid19 economic recovery and prosperity plan. Businesses depend on it to prosper and retain its workforce. Government should target labour intensive sectors such as agriculture, agro-allied industries and manufacturing as the Zenith Bank of Nigeria announced it would. Amidst all these challenges, banks are still the channel through any recovery from Covid19 would come about in the Nigerian economy. For the recovery plan to succeed, they have to give more loans. Thus, lending by banks is very crucial to post-Covid19 prosperity. Which is why they have to lend at zero interest rate like Islamic banks. Loan defaults, thinner margins and bigger lending would certainly be the lot of Nigerian banks in the next one year. They should not only participate in the loan guarantee schemes to be set up by the federal and state governments, but actively promote them to their customers. Difficult as it is, with meagre returns for their troubles, Nigerian banks must make deliberate efforts to help small and medium size businesses from now on. Consisting of at least 250 ethnic groups and about 500 dialects, Nigeria is a potpourri of tribal identities that has the outlook of a marriage of strange bedfellows. However, despite our diverse and contradictory legal systems, we've coexisted as a nation state for 60 years. Nigeria runs three legal systems: the Criminal Code, the Penal Code and the Sharia. These contradictions are pulling Nigeria in different directions. The lack of common identity has served to dampen efforts to forge a nationhood. Nigeria beginning with amalgamation of a weakened Fulani caliphate in the north; with Oyo empire and different forest kingdoms in the South west and Niger Delta and an acephalous Igbo ethnic group in the South east may have its perks, but the colonialist who created the marriage, did it for its own economic reasons. But Lord Lugard who created the contraption didn't think the union would survive this long. But observers avow that if Nigeria survived a civil war 50 years ago, it could survive anything. However, with each passing turmoil, this contrived union is being tested and stretched thin. With the latest uproar a fortnight ago, following the sentencing to death of a 22 year old singer in Kano by an Islamic Sharia court. The alleged blasphemy is yet another flashpoint in the life of the untoward marriage. The sentence has not been executed because the prisoner has the right of appeal to the Court of Appeal which is under Common Law which does not recognise blasphemy as a crime. While many Northerners applaud the sentence, majority of Southerners roundly condemned it, showing mistrust between the North and the South. When foreign businessmen ask for security in Nigeria, the ask questions about gangs of people going to burn down a man's house because of his opinion. For such arson was committed to the house of the father of the singer convicted of blasphemy. Which is why Nigeria sits at the top of countries worst to do business. Nigeria is among worst place in terms of security, because of these circumstances. So, we need to understand how these circumstances determine security and economic outcomes. Bandits operate with impunity in North Central states while Islamic insurgency ravages the North East; yet government punishes people who protest but grants amnesty to people who take arms against the state. Videos have gone viral showing ethnic cleansing against Christians in Southern Kaduna. These examples have portrayed Nigeria as a dangerous place to do business. Government should hasten the implementation of community policing to make Nigeria an investment destination. Thus, bringing Nigeria to the path of prosperity hinges on bank lending coupled with restoring security to the roads, the cities and every nook and cranny of the federation. Without being tough on security, government will continue to seen as hypocritical, insincere and incompetent.