The Equipment Leasing Association of Nigeria (ELAN) has lauded the Federal Government on the recent unveiling of the Economic Recovery and Growth Plan (ERGP) 2017-2020.
These policies which are intended to take the economy out of the current recession, according to the association, are indeed timely and reflect government’s proactive measures to tackle the current economic challenges and grow the economy.
The association noted that the policy to increase export earnings and government revenues by an additional N800 billion ($2.63 billion) a year, is a welcome idea as this would further enhance our foreign exchange reserves as well as stabilise the Naira.
ELAN’s statement released at the weekend, pointed out that in the agriculture sector, government’s policy for self-sufficiency in rice and wheat by 2018 and 2019 or 2020 respectively, as well as being a net exporter of rice, cashew nuts, groundnuts, cassava and vegetable oil by 2020, according to the plan, would further boost our food security plans.
“Federal Government’s expectation to grow the economy by 2.19 per cent this year is highly commendable as this has the capacity to set us on the pathway of growth and recovery,” part of the statement read.
The association further emphasised that, equipment leasing plays a strategic role in economic development, and would be very relevant in the achievement of these set out policy initiatives.
Specifically, the statement projected that leasing will play an important role in the economic recovery process, by enhancing the activities of the value chain in all sectors of the economy, thereby facilitating employment generation and wealth creation.
According to ELAN, “leasing has been used globally by developing countries to enhance growth and development including the Micro, Small and Medium Enterprises (MSMEs) sector, which is the engine of growth of any economy.
“No doubt, the provision of capital assets is crucial to the success of any productive venture, and in our peculiar circumstances, it is imperative that reasonable access to credit is at least guaranteed. A major way of achieving this is through equipment leasing, a financing option that can be utilised for the purpose of enhancing capital formation.”
For instance, it stressed that in respect of agricultural sector and export promotion, leasing can give players the unhindered access to the requisite farm machineries such as tractors, ploughs for mechanised farming, which would in turn lead to enhanced yield and as well creating more jobs.
“In other sectors such as manufacturing, telecommunications, transportation and even infrastructure development, leasing has the capacity to facilitate the desired transformation, for the benefit of the MSMEs and the nation at large. The opportunities leasing gives is very apt, much more at such times when Government is canvassing for the promotion of made-in-Nigeria goods, to further enhance our export potential and stabilise the economy.
“Some of the benefits of leasing include cash management/cash considerations; flexibility and convenience; obsolescence hedge; less restrictive form of financing; end of term options; absence of collateral/security; favourable financial reporting amongst others.
“In Nigeria, leasing has been supporting national economic development, contributing about N4.83 trillion to the economy in the past 15 years. It is expected to even achieve more with the present realities in the economy where outright purchase is becoming difficult, especially to the MSMEs,” the statement added.
ELAN has been expressing its favourable disposition towards partnering with government and other stakeholders for the utilisation of leasing, to enhance wealth creation and value contributions to the Nigerian economy.
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