Nigeria’s economy now mortgaged by foreigners

The Director Research, Policy and International Relations Department, Nigeria Deposit Insurance Corporation, NDIC, Mr. Yayangida Umar, has described t...

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The Director Research, Policy and International Relations Department, Nigeria Deposit Insurance Corporation, NDIC, Mr. Yayangida Umar, has described the current state of Nigeria’s economy which its critical sectors are dominated by foreigners as unhealthy for the country. Umar explained that no country can experience real growth when its economy had been “mortgaged” by foreigners whose primary interest is far from developing domestic capacity required to create jobs and position the economy on the path of sustainable growth.

The deposit insurance expert gave this position at the Finance Correspondents Association of Nigeria, FICAN, yearly workshop organised by the Nigerian Deposit Insurance Corporation, NDIC, in Kaduna, is that the economy is controlled by multinational business.

He explained: “All the biggest businesses are in the hands of foreigners. The biggest retail business in the country is owed by South Africans. The biggest telecommunications companies is owed by South Africa, Multi- Choice is a South African company even in construction it is the same thing.”

In his paper titled “Implications of Economic Recession To DIS In Nigeria”, Umar noted that the current economic crisis in the country had gradually eroded the purchasing power of many Nigerians, adding that decline in aggregate demand of an economy really influences the DIS and development of that particular economy which led to recession.

While listing the effect of the present economic situation to include; less government resources for socioeconomic and infrastructural investments, rising interest rates, fall in export due to decrease in demand, decline in lending and investments opportunities; increased poverty, hunger and disease, amongst others,  he explained that the Deposit In-surance System, DIS, as a safety net not only prevents disruption to the payment system, it also maintains and reinforce public confidence in the financial sector.

Umar, who is the Head of the Research, Policy and International Relations Department of the Corporation, pointed out that failure to address the country’s recession would affect the DIS on the long run.

According to him, when people don’t pay their premium then it becomes difficult for NDIC to carry out its mandate.

“In times of crisis, the very purpose of the insurance system to instill confidence could be undermined if there is a perception among depositors that adequate coverage is not available’” he said.

“The economic downturn and reduced investments can lead to a decline in output. Generally this translates into individuals and businesses being less likely to have reasonable bank balances. This could have a negative implication for DIS considering the fact that collectable premiums are calculated based on the deposit balances at year end”, he added.

As a way forward, he said, the fiscal authorities should strengthen the law guarding the DIS operations in the country to enable it fulfill the aim why it was set up and also urged the government to seek ways to empower the local industries to enable them compete favourably with their foreign counterparts.

Source: Nigeria’s economy now mortgaged by foreigners —Umar | National Mirror